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The Price System As A Mechanism For Using Knowledge

. . . The conditions which the solution of this [optimization] problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their dif

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The Price System As A Mechanism For Using Knowledge

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    3. Back To Hayek

    8. The conclusion is that there is a mechanism in capitalism that automatically brings about an efficient outcome at least under ideal conditions There is no such mechanism in planned socialism Thus, we conclude that capitalism is, in principle, a more efficient system

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