Socialist calculation debate

"Thus in our view the Lange-Lerner-Taylor-Hayek debate comes down to the fundamental distinction between economies where: (1) prices and hence allocations are the outcome of a competitive arbitrage process which will, of necessity, be imperfect because of the costs of arbitrage as discussed in this paper, and (2) economies where prices and hence allocations are the outcome of a centralized allocative mechanism which will, of necessity, be imperfect because of the costs of monitoring bureaucrats. Thus, although we cannot provide an answer to whether a centralized or decentralized organization is more efficient, without more knowledge of the costs of operating a centralized informational mechanism, what we have established is that the conventional formulations of this question are misleading if not incorrect."