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Economics 339
longer any doctrinal negation of the r61e of the market, but stress is laid on the
subordinated function of the market as an instrument of the plan, rather than
the other way round.
A second point made by Lange in the essay mentioned above is the distributive
r6le of the market, especially in respect of consumer goods and in the allocation
of manpower. ‘Here the market is an existing social institution, and it would be
useless to employ any other calculation. The computer may serve to work out
forecasts, but the calculations must be later verified by the actual behaviour of
the market.’ The r6le of the market in the distribution of goods and the alloca-
tion of manpower raises a number of interesting problems of theory and, in par-
ticular, the correlation between the hypothetical, accounting prices derived from
the long-term programme and the current prices, which must satisfy the con-
ditions of short-term market equilibrium while playing an essential r6le in the
redistribution of income. But this brings us to the question of implementation.
c. Implementation
Implementation can be considered only partly in isolation fromplan elaboration
because a) a planned economy is possible only if there are effective ways of im-
plementing it, and b) certain forms of elaboration predetermine to a considerable
extent the ways in which the plan wil be implemented. Once the market mecha-
nism is invoked as an iterative procedure during the elaboration of the plan, it
will hardly be possible to eliminate it from the implementation; the basic ques-
tion is whether the manipulation of market parameters (prices, interest rates, the
kind and degrees of taxation, credit terms, customs duties, and so on) provides
a sufficiently effective instrument of indirect control over economic entities to
ensure the fulfilment of the general lines of the plan.
This is precisely the question that confronts countries moving away from pre-
dominantly market economies towards planning. In our opinion, the answer is
negative. If they are to ensure that the plan is implemented, the authorities must
also have direct control over the allocation of resources, negatively (authorizing
investment in certain branches only under license, or the selective licensing of
export and imports), and positively (by being entitled to make productive invest-
ments from public funds).
Some kind of effective price control wil also as a rule prove necessary. Any
capitalist country, regardless of the circumstances, which undertakes to plan
realistically, has to face the problem of having both controlled and uncontrolled
market elements simultaneously, and both direct (administrative) and indirect
(market) methods of intervention, together with informal methods of persuasion
that are less easy to define.
In the socialist countries, planning and implementation do not form a sym-
metrical whole, and this is likely to continue even though, as compared with
planning in a capitalist country, the relative weights of direct and indirect meth-
ods are reversed. For a time, the socialist countries excluded market mecha-
nisms both in elaborating the plan and in its implementation. Apart from the
question of the distribution of consumer goods, and the allocation of man-
power (which was not always consistent, and was especially inconsistent at