Obituary – In memoriam of Mario Nuti

by Saul Estrin and Milica Uvalic

Domenico Mario Nuti, a founding member of EACES, has been one of its most prominent scholars and intellectuals for over forty years. Elected a member of the first Executive Committee of EACES at its founding conference in Verona in September 1990, he continued to be closely involved in various activities of our Association. Mario was elected EACES President in 2001-2002 and thereafter remained a member of its Advisory Board.

Mario Nuti has made numerous scientific contributions to the field of comparative economic studies during his long and active presence in EACES. Among the memorable speeches to be recalled is the Honorary Lecture “Alternative targets, paths and speed in post-socialist transition” on occasion of the 10th EACES conference at the Higher School of Economics in Moscow in August 2008. At the last EACES biannual conference he attended, in Warsaw in September 2018, Mario gave a Keynote Lecture on “The Rise, Fall and Future of Socialism” partly based on his 90-pages essay (Nuti, 2018a), illustrating how the Soviet-type system was incapable of adapting to the challenges raised by its own successes. The system was therefore eventually brought down by its inefficiency, instability, internal and external imbalances, shortages, and a crushing debt, along with the loss of popular support.

Mario was a major theoretical and policy figure in economics; perhaps the last of the major UK post-Keynesians in a line of significant Cambridge economists that included Nicholas Kaldor and Joan Robinson. His was a powerful intellectual voice for a more radical theoretical and policy framework (see more in Estrin, Kolodko and Uvalic, 2007).

We focus on four main areas of Mario’s contributions: (1) the Soviet centrally planned economies and their post-socialist transition to market economies; (2) his life-long concern about the right balance between markets and government intervention; (3)  employee participation in enterprise decisions and results; and (4) economic integration processes in Europe and the global economy.

(1)  Mario sought to categorise the various models of socialism, from Soviet planning through market socialism of Hungary to the self-managing socialism of Tito’s Yugoslavia. He believed that the collapse of the Soviet Union and its empire did not necessarily invalidate the socialist model: it merely highlighted the failings of one (unattractive) variant of it. As explained in his 2018 essay, Soviet socialism suffered greatly from an original sin: the belief that economic laws would not operate at all in the socialist economy (Rosa Luxemburg, Bukharin, Hilferding and other leftist thinkers) (Nuti, 2018a). He utterly rejected Fukuyama’s view therefore that the fall of the Berlin Wall in 1989 spelt “the end of history”. This point is fundamental because, if socialism has failed, leaving no valid alternative to capitalism, intellectuals are left with no systemic way to frame an economic agenda about how to build a better world. Mario’s work also gives us a basis to think about new models of the socialist economy, not tarred with the authoritarian brush of the Soviet Union and China.

As a leading connoisseur of socialist economic systems, Mario made major contributions to many theoretical and policy areas of the transition to market economy after 1989. In the absence of blueprints, his innovative ideas on how to implement radical reforms of the socialist economy were valuable in defining the main objectives, speed, and sequencing of economic reforms; desirable macroeconomic stabilization and exchange rate policies; advantages and disadvantages of different privatization methods. During the next two decades, Mario contributed to many other specific issues of the transition and, was among the first to emphasize its deep flaws, especially after the strong impact of the global financial and economic crisis in 2008. These flaws in his view included the high social costs of transition; what he saw as the disastrous consequences of hyper-liberal policies for growth and development; and the neglect of the role of the state in creating and supporting institutions in a market economy.

(2) Mario used economic theory to question the interpretation of general equilibrium models as reaching equilibrium automatically.  To quote, “I believe the neoclassical picture of the capitalist economy is fantasy because markets are both incomplete (where are the future markets for manufactured goods, or the contingent commodity markets?) and, most importantly, sequential. Hence resource allocation is ruled by price (and quantity) expectations as much as by actual spot prices, and therefore from [the] Arrow-Debreu [model] we instantly fall into a Keynesian world of expectations – whether self-fulfilling or false – of underemployment equilibria and economic fluctuations” (Nuti, 1992).This analysis of  the market economic system led him, like Keynes before him, to question the appropriateness of a non-interventionist policy stance, from the  “free market “ policies of  Reagan and Thatcher in the 1980s through to seeking to balance budgets in a recession, so-called  austerity” policies, after 2008. However, his academic opposition to such policies was not based on their deleterious consequences (though he was very concerned about rising inequality), but rather because the economic theories upon which such policies were based were incorrect.

Mario was also extremely influential in some of the leading post-Soviet economies of Eastern Europe, notably Poland. While the Washington Consensus ruled in Russia and the Balkans, Mario as the European Commission’s Economic Advisor to Poland worked with Finance Minister Kolodko to ameliorate the previous austerity policies which were acting to turn the post-transition downturn into a deep recession, in favour of a more interventionist approach. At the same time, as an advisor on transition to the European Commission’s DG-II, Mario was important in guiding the central east European economies to early membership of the EU.

Thus, Mario not only was an effective researcher into the role of government in redressing macroeconomic and exchange rate failures of the free market, but he was rare in establishing the empirical validity of his arguments in the “laboratory” conditions of economic transition in Eastern Europe. It is unfortunate that he has passed away as governments everywhere embrace his more interventionist macro-economic stance, though perhaps with only a passing understanding of why that is the right thing to do in this COVID crisis.

(3) Mario had a profound interest in alternative forms of enterprise that could assure workers participation in decision-making and in enterprise results, instead of the standard wage-employment contract. His work was inspired by the practice of workers’ cooperatives, profit-sharing and codetermination in western market economies as well as the self-management experience in Yugoslavia. He was also interested in the diffused experiences of employee ownership in many east European countries following the privatizations in the 1990s. Mario’s support of participatory forms of enterprise did not preclude his open criticism of some of the most influential models. His critical analysis of the claims and overclaims of Weitzman’s share economy (“Catch 22”), or his questioning of James Meade’s capital-labour partnership, due to the violation of the principle of equal pay for equal work, were Mario’s own attempts to devise more viable participatory solutions. His interest in economic democracy led him to initiate a major European Commission-financed project on the Promotion of Employee Participation in Profits and Enterprise Results that led to the publication of the first PEPPER Report in 1991.

With the start of transition in Eastern Europe, Mario raised his voice against simplistic generalizations regarding the negative implications of employee ownership. Given that privatizations had often led to employed workers becoming significant shareholders of their firm, Mario formulated the conditions under which the expected adverse effects would be avoided (Nuti, 1995).  Unique incentive problems were to be expected only if employees as shareholders had a lower share in company equity than in labour supply as workers. Mario also anticipated that enterprises in which insiders held a controlling interest would probably be institutionally unstable, as indeed happened: many employee-owned firms in the region did not survive or ended in the hands of outsiders.

(4) As an attentive observer of political and economic events in Italy, the European Union and the global economy, Mario was deeply concerned about the many challenges posed by integration and globalization. Globalization is incomplete, distorted and unfair, he observed in 2009, among other reasons because of the persistence of many forms of protectionism; because it favours the international mobility of capital rather than labour; and finances global imbalances instead of investment and growth in poor countries (Nuti, 2009). In his recent search for “realizable” utopias, he observed that the revival of demand for socialism derives from these multiple challenges, including globalisation, mass migrations, digitalisation, robotics and Artificial Intelligence, climate change, environmental pollution.

Additional challenges are faced regionally by the member states of the European Union and especially the Eurozone, given the disintegration trends resulting from their dysfunctional construction. Due to “seismic faults” in the European Union – including Brexit, austerity policies, tiny EU budget, premature introduction of  the Euro, migrations, tax competition, tolerance of illiberal regimes, divergence of welfare policies – its institutions and policies are equivalent to “tectonic plates sliding over each other and colliding” (Nuti, 2018b). Mario particularly condemned the persistence of austerity policies, demonstrating that fiscal consolidation can actually increase, instead of decreasing, public debt/GDP ratio. He believed there were remedies, in line with the original European design – such as a common asylum acceptance regime to reduce the migration crisis, or excluding public investment from the permitted public deficit, that would loosen austerity – but was aware that these remedies may “clash with the hyper-liberal design that has gradually perverted European policies, as well as with conflicts of interest between states, ideologies, welfare regimes, classes, bureaucracies, memories and expectations” (Nuti, 2018b).

Mario Nuti taught his students that no theoretical paradigm in economics should be accepted a priori, but its use should depend on the problem we are trying to solve. This was in line with his own approach, strongly influenced by some of his professors in Warsaw and Cambridge. He once wrote: “I am not fond of labels; like all aggregates they destroy information and are potentially misleading. If pressed, I would choose a handful of them. I would call myself a keynesian-kaleckian-kaldorian-robinsonian when modeling the macroeconomics of the capitalist economy; a “left-wing monetarist” … when modelling the macroeconomics of the socialist economy; a consumer of Marxian techniques when studying the dynamics of economic institutions and systems, but ready to turn them against Marx-inspired systems with a vengeance; a neo-classical in microeconomics, convinced of the importance of prices and a strong supporter – though very critical – of markets as homeostatic mechanisms, indispensable no matter how crude or imperfect. What approach is best depends on the question you ask (Oskar Lange); you choose a model as you would choose a map, according to the nature of your journey (Joan Robinson)” (Dictionary of Dissenting Economists, Elgar Publishing, London 1991).

Mario has left behind much more than his valuable scientific contributions. He was an intellectual of a special kind, with a critical mind and great knowledge in many fields that extend far beyond economics. His contribution was not only in his writings and his lectures, fascinating though they are. Mario was at his most impressive in seminars, where he quickly cut through to the core of arguments to make deep and perceptive comments that led many presenters to rethink their assumptions, methods, and conclusions. Yet he always made his remarks politely, with charm and no small amount of humour. He remained consistent in his views until his very last days. We will all greatly miss the power of his intellect as well as his kindness and concern.


Domenico Mario Nuti in P. Arestis and M. C. Sawyer (1992), (eds.) A Biographical Dictionary of Dissenting Economists (London: Elgar Publishing), pp. 401-409.

Estrin, S., G. W. Kolodko and M. Uvalic (2007), ‘Introduction: Domenico Mario Nuti’, in S. Estrin, G. W. Kolodko and M. Uvalic (eds) (2007), Transition and Beyond – Essays in Honor of Mario Nuti, Palgrave Macmillan, pp. 1-13.

Nuti, D. Mario (1995), ‘Employeeism: corporate governance and employee share ownership in transition economies’, in M. I. Blejer and M. Skreb (eds.) Macroeconomic Stabilization in Transition Economies, CUP, Cambridge 1997, pp. 126-154.

Nuti, D. Mario (2009), ‘Globalization Today: Incomplete, Distorted and Unfair’, in P. Della Posta, M. Uvalic and A. Verdun (eds.) (2009), Globalization, Development and Integration. A European Perspective, Palgrade Macmillan, pp. 326-329.

Nuti, D. Mario (2018a), ‘The Rise and Fall of Socialism, Dialogue Of Civilisations Research Institute Special Report, Berlin,

Nuti, D. Mario (2018b), ‘Seismic faults in the European Union’, unpublished conference paper.

Saul Estrin and Milica Uvalic, London and Florence, January 19th, 2020