The Scope of Analysis in the Socialist Calculation Debate

In the original history of the socialist calculation debate (e.g., Bergson, 1948), Oscar Lange proved that bureaucrats can find the equivalent of equilibrium prices through trial and error. In the revised history of this debate (e.g., Caldwell, 1997; Lavoie, 1985), Lange proposed an erroneous solution to the calculation problem. Dynamic entrepreneurial rivalry moves prices toward equilibrium. Lange and other “Market Socialists” allies thought only in terms of a static competitive market equilibrium that excludes the role entrepreneurs play in adjusting prices.