Market socialism

"The accounting prices in a socialist economy can be determined by the same process of trial and error by which prices on a competitive market are determined. […] Neither would the Central Planning Board have to solve hundreds of thousands (as Professor Hayek expects) or millions (as Professor Robbins thinks) of equations. The only "equations" which would have to be "solved" would be those of the consumers and the managers of production. These are exactly the same "equations" which are "solved" in the present economic system and the persons who do the "solving" are the same also. Consumers "solve" them by spending their income so as to get out of it the maximum total utility; and the managers of production "solve" them by finding the combination of factors that minimizes average cost and the scale of output that equalizes marginal cost and the price of the product. They "solve" them by a method of trial and error, making (or imagining) small variations at the margin, as Marshall used to say, and watching what effect those variations have either on the total utility or on the cost of production. And only a few of them have been graduated in higher mathematics. Professor Hayek and Professor Robbins themselves "solve" at least hundreds of equations daily, for instance, in buying a newspaper or in deciding to take a meal in a restaurant, and presumably they do not use determinants or Jacobians for that purpose."

"From the human point of view, return paid to non-human factors of production is unearned. ... The employment of capital instruments and natural resources in economic production requires no personal hardship or exertion from any human being. The economic services provided by these factors of production are not corporeally inherent in human beings. The opposite is true of labor services, which can only be provided through the physical and mental activity of human beings. ... The really grossly exaggerated personal incomes in society are dominated by property income, and this source of inequality would be abrogated by the equalization of property income distribution."