This article was published in the leading Czech journal of economics named “Politicka Ekonomie” in 1967 that is during the process of Economic Reform intended to change the Soviet-type Command Economy in a sort of Market Socialism. It was curious that while the need to revive the market mechanism was accepted by the majority of economists and politicians, the famous “Socialist Controversy” that was just about this crucial problem was still virtually unknown in Czechoslovakia at that time. Our purpose was not only to provide the basic information about that controversy, but also to put it in the broader context of the evolution of the economic theory in the 19 th and 20 th century. Because of the previous domination of the orthodox Marxist economics, any developments of the non-Marxist economics after the classical contributions of Smith and Ricardo were regarded as the attempts of the “bourgeoisie” to falsify the “true” economics for the purpose of preserving Capitalism. We found it therefore necessary to start with the explanation of neoclassical concepts of marginal utility, imputation of value from final products to intermediate products and primary resources, as well as concepts of general equilibrium. After explaining these “roots” of the controversy the critical points of von Mises and Hayek are presented and the socialist responses of Maurice Dobb, Oskar Lange, Abba Lerner and others are discussed with a clear aim to show that without the market the socialist economy cannot be efficient.
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