*It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.*Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning—direction of the whole economic system according to one unified plan.The reason for this is that the “data” from which the economic calculus starts are never for the whole society “given” to a single mind which could work out the implications and can never be so given.

It seems to me that many of the current disputes with regard to both economic theory and economic policy have their common origin in a misconception about the nature of the economic problem of society.

This misconception in turn is due to an erroneous transfer to social phenomena of the habits of thought we have developed in dealing with the phenomena of nature.

That is, the answer to the question of what is the best use of the available means is implicit in our assumptions. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions.

The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses. The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.

It may be admitted that, as far as scientific knowledge is concerned, a body of suitably chosen experts may be in the best position to command all the best knowledge available—though this is of course merely shifting the difficulty to the problem of selecting the experts.

What I wish to point out is that, even assuming that this problem can be readily solved, it is only a small part of the wider problem.

On certain familiar assumptions the answer is simple enough. On certain familiar assumptions the answer is simple enough.

If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. American Economic Association 1945 The text of this edition is copyright ©: 1945, American Economic Review, XXXV, No. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic.

Competition, on the other hand, means decentralized planning by many separate persons.

The halfway house between the two, about which many people talk but which few like when they see it, is the delegation of planning to organized industries, or, in other words, monopoly.

## Comments Essays On Social And Economic Issues