The Theoretical Response to Challenge

Włodzimierz Brus and Kazimierz Laski

in From Marx to the Market

Published in print April 1991 | ISBN: 9780198283997
Published online November 2003 | e-ISBN: 9780191596032 | DOI:

Series: Clarendon Paperbacks

 The Theoretical Response to Challenge

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The idea of market‐less economic system of socialism began to be challenged already at the end of XIX century, but an all‐out attack on the concept came in the 1920s, associated with works of Austrian economists Ludwig von Mises and Friedrich von Hayek. This prompted a number of socialist economists to attempt to show the possibility of a rational economic system under dominant nationalization of means of production by using a notional market mechanism; the best known of such attempts is the one developed by the Polish economist Oskar Lange (1936/7). This chapter presents Lange's model of market socialism along with discussion of criticism fromtwo sides: on the one hand as lacking the genuine driving forces of competition, motivation, and information, on the other hand as incompatible with socialist objectives of full employment, elimination of fluctuations and equitable income distribution.

Keywords: Austrian school; central planning; economic calculation; entrepreneurship; Oskar Lange; market mechanism; neoclassical school; Walrasian auctioneer

Chapter.  4150 words. 

Subjects: Economic Systems

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