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THE COMPUTER AND THE MARKET OSKAR LANGE "Not quite 30 years ago I published an essay On the Economic Theory of Socialism.1 Pareto and Barone had shown that the conditions of economic equilibrium in a socialist economy could be expressed by a system of simultaneous equations. The prices resulting from these equations furnish a basis for rational economic accounting under socialism (only the static equilibrium aspect of the accounting problem was under consideration at that time). At a later date Hayek and Robbins maintained that the ParetoBarone equations were of no practical consequence. The solution of a system of thousands or more simultaneous equations was in practice impossible and, consequently, the practical problem of economic accounting under socialism remained unsolvable. "In my essay I refuted the HayekRobbins argument by showing how a market mechanism could be established in a socialist economy which would lead to the solution of the simultaneous equations by means of an empirical procedure of trial and error. Starting with an arbitrary set of prices, the price is raised whenever demand exceeds supply and lowered whenever the opposite is the case. Through such a process of tatonnements, first described by Walras, the final equilibrium prices are gradually reached. These are the prices satisfying the system of simultaneous equations. It was assumed without question that the tatonnement process in fact converges to the system of equilibrium prices. Were I to rewrite my essay today my task would be much simpler. My answer to Hayek and Robbins would be: so whats the trouble?" Full: http://econc10.bu.edu/economic_systems/Theory/NonMarx_Socialism/Soc_Contraversy/lange_computer_and_the_market.htm Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math ---------- Original Message ---------- From: Louis Proyect via Marxism <[email protected]> Subject: [Marxism] Fwd: The Socialist Origins of Big Data Date: Mon, 06 Oct 2014 11:17:53 -0400 ____________________________________________________________ Map Your Flood Risk Find Floodplan Maps, Facts, FAQs, Your Flood Risk Profile and More! http://thirdpartyoffers.juno.com/TGL3141/5432bd0d527903d0d0cb2st03vuc ________________________________________________ Send list submissions to: [email protected] Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
