Professor with a capital P: László Csaba

Senate Chamber 2011 of Corvinus, where portraits of great predecessors gaze out from the walls, was almost too small for the audience, such was the demand to greet László Csaba on his birthday. The volume entitled Economics and Economic Policy (editors: Dóra Győrffy, István Benczes, Miklós Rosta) was published for this occasion, with papers  written on the favourite topics of Professor Csaba (Professor at Corvinus and CEU). On 22 March, these were briefly presented at the conference in the presence of the celebrated professor. 

“I met László Csaba as a young researcher. What is his secret? His openness to new things, his legendary appetite for reading, his enviable versatility, his open-minded and critical reading, his first-rate debating skills. I am grateful that we can be close friends,” said Péter Halmai, Széchenyi Prize awardee, member of the Hungarian Academy of Sciences (MTA),  economist and member of MTA’s Presidium. He added, “László Csaba does a lot for publishing, he quotes many Hungarian authors in his own works, his helpfulness is well known, he follows young people closely, in short: he is a Professor with a capital P”, said Halmai. He also emphasized that Professor Csaba always starts his classes with the most up-to-date teaching material, and he is a real media personality, who speaks about economics topics in a sophisticated and well-informed, clear and understandable way in various media programmes. 

Klára Major, Associate Professor and Head of the Institute of Economics (Professor Csaba joined the Institute in 2022), said that she has seen that his colleagues have a deep respect for him, and that they respect him not only for his professional work but also for his humanity. Balázs Réffy, member of the public body of the Hungarian Academy of Sciences, CEO of Akadémiai Kiadó, stressed that Professor Csaba authors a lot of journal articles and books, and it is important that he undertakes to write all these as well as to the reviews. “But some things are immeasurable, such as the school that develops around a scientific personality,” said the publisher’s CEO 

“Without Laci, I would not be who I am” – these were the words of Dóra Győrffy, Professor at the Corvinus Institute of Economics, one of the authors and editors of the volume already mentioned. “He  strictly required  that I read all the materials very carefully, and after that one couldn’t talk into the air. He also said that a PhD is just a driving licence, which you need to get as soon as possible, and then life begins. We think alike in many ways, but we have also had many disputes, always within the rules. He shaped the lives of many of us, he taught all his students to write in both Hungarian and English,” Győrffy said. 

The audience was then able to watch a video message from Iván T. Berend. The former Rector of Corvinus said that his relationship with Professor Csaba has become a close friendship and professional cooperation, and they send all their papers to each other. “You can look back on a beautiful journey, with many disciples, and now life is ahead of you: work and keep teaching,” said Iván T. Berend. The researchers of the Institute of World Economics, which was Csaba’s very first employer, also sent a video message. 

Paradigm shift, false illusions 

The authors then briefly presented some of the papers in the volume. “The concept of the Kuhnian paradigm applies to social sciences and economics as well, but with specific features” – said Éva Voszka, economic historian, corresponding member of the Hungarian Academy of Sciences, Professor Emerita at the University of Szeged. The economist believes that the preconditions for a paradigm shift are now in place, but that the shift is never a sharp break, but usually occurs in several steps. The prerequisite for a shift can be a major economic change, a war, an epidemic, shifts have usually been triggered by these phenomena.  There is also a demand from the political side. Economic policy is not a science, but a political field, and paradigms are shaped by political processes. Practice does not  follow theory anywhere, at least not in its original form, because policy makers have to take into account many factors: electoral interests, the interests and strength of different social groups, the country’s traditions and culture. According to Voszka, an important sign of a multi-step paradigm shift in economic policy is that the changes are permanent, they even become enacted, institutionalised. According to the economist, regions are facing similar problems and thus interacting, and she sees signs of the expansion and strengthening of the state. “A paradigm shift is always a difficult time, not only for politicians, but also for businesses and citizens,” Voszka said. 

In his lecture “Beyond the hallucinogenic mainstream”, Olivér Kovács, Senior Research Fellow at the National University of Public Service, spoke about how the mainstream of economics is nowadays dangerously far from constructive descriptions of reality. “The various, ingrained methods  can lead us astray, as can the various modelling methods. Systems are difficult to model today, maybe not even possible,” said Kovács. In his opinion, a more complex and nuanced approach is needed, as it is possible that seemingly insignificant micro-processes can re-tune the macro-system in such a way that a different quality is created. A more complex approach is therefore necessary, because, in Kovács’ opinion, “the current mainstream economics often lulls students into a false illusion. Complexity has to be acknowledged; a good professor has to teach an approach. An economist should be brave and expect that he/she may be wrong. A good economist should deal with the relevant phenomena and questions of life,” the Senior Research Fellow stressed. 

Kornai is still relevant today 

Péter Mihályi, Professor Emeritus of the Institute of Economics, in his lecture “The role of dichotomous structures in the thought of János Kornai”, stated that he believes that one of the most important elements of the life’s work of Kornai, who died in 2021, is the anti-equilibrium theory, one of the most important statements of which is that modern economies are never in equilibrium. There are two possible states of the economy: a shortage economy (as the economist experienced under socialism, when there were shortages of goods and queues) or a surplus economy. The possibility of these two conditions is called a dichotomy. According to Mihályi, Kornai’s analysis is relevant again today, because another very important claim of the scholar, who died in 2021, is that there are two kinds of social systems: democracy or autocracy. Mihályi does not agree, and in his lecture (and of course in his paper included in the book) he claims that he can distinguish between several types of domination: not two, but six. Kornai believed that there was democracy and autocracy, later modifying this dichotomous structure and calling dictatorship the third. However, Mihályi thinks it is worth distinguishing between the following 6 types of domination: liberal democracy (Sweden or most EU countries), conservative democracy – Mihályi says that the US or Britain are examples of liberal democracies, but also partly conservative democracies, because he finds that the constitution based on common law, while guaranteeing social stability, also hinders the exercise of power by the government that wins the election. There is also illiberal democracy, such as in Hungary and Serbia, there is autocracy, such as in Russia and Türkiye, he calls China and Iran dictatorships, and finally there is despotism, for example in North Korea and Myanmar. 

Market and Society – The relationship between Hayek’s economic and social theory was discussed by Péter Gedeon, Professor Emeritus of the Institute of Economics. He said, “The most important feature of Hayek’s theory is that he carried out an epistemological turn in economics. Friedrich August von Hayek, a Nobel laureate economist from the Austrian school of economics, derived the functioning of systems from an analysis of knowledge levels, starting from the premise that human knowledge is limited. His central idea is the so-called spontaneous market order. In his view, if there is no mind that can sort it out, the market and the price system can do it, aligning human knowledge and relevance. At the same time, the market order does not function properly without social norms, and the norms and the price system bypass the limits of human knowledge. Modern capitalist society can exploit human knowledge, which no individual can acquire because of his or her cognitive limitations, by relying on money for economic coordination and on abstract rules of behaviour for social coordination. 

The Red Queen and the hyper-competition 

“Everyone has to run faster and faster to stay in place, this is the Red Queen hypothesis”, said Balázs Hámori, Professor Emeritus of the Institute of Economics, in his video lecture. Competition between firms in the information economy accelerates, and circumstances have changed to the point where, according to those involved, there is hyper-competition. In evolutionary biology, this situation is called the Red Queen, a reference to Lewis Carroll ‘s novel Alice in Wonderland, where Alice sees that everyone in the Red Queen’s kingdom has to run to stay in one place. This situation is not only due to info-communication technology. Global firms, as well as hedge funds, play a role in the unpredictability and the ability of firms to maintain their competitive advantage. It is typical of our times that contending firms are now competing not for market share, but for mere survival. It is the threat of losing (the horror of total annihilation) that keeps the competition going. Just as the advent of the computer has completely squeezed the typewriter out of the market, the same is true of today’s competitive players. Speed and flexibility have become important factors in the competition. An interesting new tool in price competition could be free of charge or, for example, fully individualised pricing – Dr. Hámori told us in his lecture. 

Afterwards, Judit Ricz, Associate Professor at the Corvinus Institute of Global Studies, recalled her memories of László Csaba from her PhD years in Debrecen. As the author of a paper in the aforementioned book, Ricz recalled how her professor would encourage her to do better with phrases such as “Judit, you have one more week, but write seriously” or “The most important thing about a doctoral dissertation is that it is written”. 

After the lunch break, the conference continued with further lectures. 

Katalin Török