These seven essays by the Eastern block's most important economist address and explore many of the critical social and economic issues inherent in the socialist economy. Published in Hungary in 1983, they are the firsthand observations of an insider who attempts to be as frank and impartial as possible about the experiment in his own country. The essays distinguish the classical or traditional form of a highly centralized socialist economy from a system, like that of Hungary's, that is in the process of institutional reforms. They focus on a few important characteristics of social economies, rather than providing a broad description and analysis of socialist systems, in order to stimulate thinking along comparative lines. The wider problems and issues related to socialist systems that they address will interest sociologists and political scientists, historians, and philosophers as well as economists. Kornai points out that because real modern societies are different from the pure models of capitalism and socialism, combinations and mixtures of socialist and capitalist systems, sellers' and buyers' markets, centralized and decentralized management occur widely and intensively in both socialist and highly developed industrial market economies and in the nonsocialist third world countries in some segments and to a certain degree. Looking at these phenomena comparatively reveals both the deep differences and the similarities and analogies between the systems. The essays are: The Reproduction of Shortage. "Hard" and "Soft" Budget Constraint. Degrees of Paternalism. Economics and Psychology. Comments on the Present State and the Prospects of the Hungarian Economic Reform. Efficiency and the Principles of Socialist Ethics. The Health of Nations.