Chapter 6: Oskar Lange and the ‘Competitive Solution’
6. Oskar Lange and the “competitive solution” In this chapter and the next, we shall examine the different attempts of socialist economists at formulating a “competitive solution” to the problem that socialist economic calculation poses. With this in mind, we shall accomplish two goals in this chapter: first, we shall present a series of introductory considerations which place the most significant implications of this new proposal in their proper context, and we shall analyze the most important historical precedents for the proposal; second, we shall carefully study the “solution” Oskar Lange developed. Although our focus on Lange may at times appear too meticulous and extensive, his contribution – the best known and most often cited of those made by socialist theorists – has been so incorrectly interpreted that it is necessary to make a close and thorough examination of it. The analysis of the competitive solution will be concluded in the next chapter, which will be devoted to a study of (among other matters) the contributions made by Henry D. Dickinson, Evan F.M. Durbin and Abba P. Lerner in this area. 1 INTRODUCTORY CONSIDERATIONS One feature shared by all versions of the so-called “competitive solution” is an attempt to introduce a sort of “quasi-market” (in the words of Mises), in which the behavior of the different economic agents resembles as closely as possible that of their counterparts in a capitalist system. When we examine the different contributions, we shall see that they are generally characterized by their ambiguity and contradictory nature, and...
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