Over the past century, economists and other intellectuals have produced an enormous amount of literature on how to convert capitalist market economies into socialist centrally planned ones. Among the better known contributors to it are Sidney and Beatrice Webb, Oskar Lange, Abba Lerner, Joan Robinson, Nicholas Kaldor, Paul Sweezy, Wassily Leontief, and J.K. Galbraith; but there are many, many others.
It is ironic that the reverse problem of converting socialist economies into capitalist ones has received scant attention. The writings of Friedrich Hayek, Joseph Schumpeter, Milton Friedman, and P.T. Bauer are partial exceptions, but their focus has usually been elsewhere: namely, exposing the errors made by the advocates of socialism rather than charting the transformation. Hence, there is no general theory to draw on in addressing the crucial economic policy problem of the 1990s: how to transform command economies into market economies.
Recognition of the failures of command economies and the need to transform them is the reason the rhetoric of "markets" and "marketizing" is fashionable in the 1990s. But the unanimity and ubiquity with which markets are advocated--in the Soviet Union, Eastern Europe, China, and the Third World--obscure the profound divergences about what the terms mean and what they imply for transforming command economies into market-oriented ones. These divergences are latent in such frequently used oxymorons as "market socialism" (a term invented by the Hungarian economist, Janos Kornai, but subsequently rejected by him), "regulated socialist markets" (a term favored periodically by Gorbachev and certain "conservative" Soviet economists), and what some Chinese leaders envisage as a system between capitalism and socialism which they describe as "socialism with Chinese characteristics."
