The characteristics of decision making in a well‐functioning economy

Discusses the concept of a well‐functioning economy and attempts to define its principal properties. Examines some aspects of rules of decision making that are essential for the generation of optimal decisions. Brings together the selected properties of a well‐functioning economy and the characteristics of decision making, in order to shed light on how a well‐designed decision‐making system can produce an economy that functions and performs well. Comments on the failure of central planning in eastern Europe and the former Soviet Union.