Freedom and competition: Tibor Liska’s socialist entrepreneurship and the economic experiments in Kádár’s Hungary

This article contributes to the body of literature on the economic history of the Soviet bloc by shifting the focus from theoretical debates to the practical efforts made to overcome the ‘classic’ model. It addresses the knowledge gap by examining the grassroots experiments that took place in late socialist Hungary under the leadership of Tibor Liska, an economist who sought to develop an alternative market system based on socialism and social justice. Liska rejected both private property and state-directed economics as anti-competitive and ultimately unjust. Distancing himself from the contemporary debate centred on managerial socialism, Liska developed the concept of universal entrepreneurship, which he believed would enable the socialist system to compete with Western capitalism in terms of economic productivity and profit. From the late 1970s onwards, Liska was permitted to conduct limited economic experiments based on his theories. However, their success raised political concerns, resulting in the experiments being abruptly terminated. While this did not spell the end of Liska’s career, interrupting his experiments amid the deep economic and financial crisis of the early 1980s signalled the demise of a socialist solution to the final crisis of the Soviet system. Drawing on a wide range of unpublished primary sources, this article describes how Liska has repeatedly managed to convince politicians and economists of his ideas and secure funding for his experiments. It also emphasizes that the boundaries of political and academic tolerance towards visionary, rational reform projects such as Liska’s were tightly controlled until the collapse of the entire Soviet bloc. Liska was not a utopian or a neoliberal, but rather a pragmatically sophisticated thinker who was willing to take risks in order to test economic alternatives to bureaucratic planning.