Equality, Participation, Transition: Essays in Honour of Branko Horvat

xxiv Introduction
theory led him to try and build a theoretical system around the labour
theory of value. He made his first contribution to this field while still
a third-year undergraduate, with a paper that in 1950 won a prize at
his University. Much later, as a mature theorist, he found the neo-
Ricardian critique particularly helpful. While he found the neo-
Ricardian argument against the neoclassical theory valid, he felt that
the positive reconstruction of the economic theory was missing, which
is what he tried to address in his two recent books. In the first one,
The Theory of Value, Capital and Interest (1995), he applies the theory of
systems to economics, arguing that macroeconomics cannot be based
on micro foundations, but rather that it must be the other way round.
Since the book focused on a closed economy, he felt the need to
expand it to an open economy, which led to the second book, The
Theory of International Trade (1999). In this book he extends the argument
of the previous book to the theory of international trade, criticizing
the logic and fundamentals of mainstream neoclassical trade
theory (primarily the Heckscher-Ohlin theory). Both books again confirm
Horvat’s unconventional treatment of fundamental issues in
economic theory.
3 The many facets of Branko Horvat
But Horvat has not been only an important economist. During his rich
professional life as distinguished scientist, he has also been a social
engineer, a pedagogue, a controversial political activist. Thanks to his
broad educational background, his writings display a truly multidisciplinary
scholar. Being a convinced but critical Marxist, he has always
insisted on the need to develop simultaneously economic and sociopolitical
theory, stressing that one cannot study economics without
exploring social relations and politics. Not surprisingly, therefore, the
term ‘political economy’ has a special meaning for him, representing,
as he himself put it, ‘a fusion of economic and political theory into
one single social theory’ (see Foreword, in Horvat, 1982, Political
Economy of Socialism).
Throughout his life, Horvat has been a committed socialist activist
and a great supporter of socialist values, and socialism has undoubtedly
always been his predominant concern. He wanted to design and implement
a better social system than the one he lived in, but as he clearly
recognized, social design is immensely more complex than design in
natural sciences: he was well aware of how difficult a task he had given
himself. In line with such an approach to social change, he has always