(1879–1964), political economist. Born in Hungary, Evgenii Varga, known in Hungarian as Jenő Varga, studied in Berlin, Paris, and Budapest and became a professor of economics at the University of Budapest. In 1919, he took part in the Communist Revolution and became a commissar of finance and then chairman of the Supreme Council of the National Economy in the Hungarian Soviet Republic of Béla Kun. Following the collapse of the revolution, he emigrated to Austria and then to the USSR, where he worked as a close adviser to Lenin and Stalin, mainly as an economist and expert on the world economy and the capitalist system.
Varga’s political activities both as a scholar and Communist were devoted to the Comintern; he was a leading member of its executive committee. From 1927 to 1947, he headed the Moscow Institute of World Economics and World Politics and edited its journal by the same name (Mirovoe khoziaistvo i mirovaia politika). In 1939, he became a member of the Academy of Sciences, and later a member of its presidium. Varga received the Lenin Prize in 1963. He wrote more than 100 books and innumerable articles on the political economy of capitalism and imperialism.
During the 1920s, Varga was deeply disturbed by the failure of the Communist revolution to occur in Western Europe but was greatly encouraged by the deep world crisis of 1929, especially in the United States. In early 1941 and again in 1943, Varga was criticized for his respect for Germany’s economic and military capabilities, and for the fact that his institute was staffed with too many German-speaking foreign nationals—that is, too many Jews—and too few Russians. However, Stalin, who personally received these complaints, did not act on them.
The attacks resumed in 1947 and focused on a book by Varga, Izmeneniia v ekonomike kapitalizma v itoge vtoroi mirovoi voiny (Changes in the Economics of Capitalism following World War I; 1946), in which he claimed that following the war, capitalism had become somewhat closer to the socialist system, mainly through the implementation of versions of economic planning and increased government intervention. His main examples of this trend were the Marshall Plan and postwar planning in the United Kingdom. Despite strong criticism from top leadership, including Andrei Zhdanov, Varga refused at first to change his views; instead, he recommended improvements for the Soviet economy, which were also unacceptable to the leadership. In 1947, he was dismissed as head of the institute and as editor of its journal. On 15 March 1949, Varga gave in and “admitted” his ideological mistakes in a Pravda article.
Following Stalin’s death, Varga was rehabilitated, and two years later he was reinstated in the Institute of Economics. In 1959 his eightieth birthday was celebrated as a great event. Subsequently, during the ideological debate following Khrushchev’s visit to the United States, Varga took a conservative doctrinal position (Pravda, 7 November 1959), stating that the world was still divided between the decaying capitalist part, with no chance of rejuvenation, and the socialist world, the promised wave of the future.
Evsey Domar, “The Varga Controversy,” American Economic Review (March, 1950): 143; Michael Kaser, “Le débat sur la loi de valeur en URSS: Étude retrospective 1941–1953,” Annuaire de l’URSS 1965, pp. 555–569 (Paris, 1966); Gennadii Kostyrchenko, Tainaia politika Stalina: Vlast’ i antisemitizm (Moscow, 2001), pp. 214–218, 376, 572–573; Kermit McKenzie, Comintern and World Revolution, 1928–1943: The Shaping of Doctrine (London and New York, 1964); Alexander Werth, Russia under Khrushchev (New York, 1961), pp. 229–230.