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Economics 337
be no active control over the development of the national economy’ (p. 141).
The present authors believe that a dynamic, and hence effective plan must, in
addition to these two, cover a third question: economic relations with other
countries.
As opinions regarding minimum scope may, of course, vary, another point
should be mentioned: the importance of the way in which these three items are
included in the plan and subsequently dealt with. This is particularly important
in capitalist countries where the government presumably does not control all
the resources. The ‘distribution of investment among the different branches of
the economy’ (the second item mentioned above) implies that the government
will not only intervene (by e.g. a system of licensing) in order to alter the struc-
ture of private investment, but also take positive action in the form of the actual
investment required in the national interest whenever the private sector lags be-
hind. This matter is of vital importance in the developing countries, where limi-
tations on undesirable investment instigated by the market demand for luxury
goods are an indispensable condition of growth. All these factors considerably
influence implementation (discussed below).
b. Economic calculus in planning
Today, this problem is quite different from what it was a few decades ago, when
the main theoretical discussion was whether, outside a market economy, eco-
nomic calculation was feasible. This controversy has meanwhile almost com-
pletely disappeared from the literature. As programming theory and techniques
develop, it has become clear that the market is only one of many servo-mecha-
nisms - in other words, only one of many ways of dealing with co-ordination
problems (and helping to identify the bottlenecks that limit the effect of plan-
ning decisions), and ensuring optimization under the plan. For the purposes of
elaborating the plan, economic theory has therefore to appraise the relative
utility of the data based on the market or available from other sources; almost
certainly, it wil not regard them as alternatives having equal value. So far, the
indications are that criteria for the dynamic allocation of resources cannot be
derived from specific market magnitudes which, naturally, primarily reflect
specific conditions.
Thus, the directions development should take cannot be decided by data sup-
plied through the operation of market mechanisms, but must be worked out on
the basis of non-market (or ‘direct’) factors. Even when these are technically
very primitive (e.g. do not lend themselves to the elaboration of a comprehensive
network of hypothetical prices), market mechanisms are no substitute-especial-
ly as computers now offer real prospects of employing mathematical methods in
planning. Admittedly, mathematical models are still used only to a very limited
extent in the elaboration of comprehensive economic plans, as an enquiry made
in connexion with the present study shows; they are much more widely used
to help solve partial problems and check the internal consistency of plans. How-
ever, progress is likely in this respect, especially in view of the recent intensifica-
tion of theoretical studies in the countries in which economic planning is most
advanced and experience is most extensive (cf. in particular, the Soviet school of