ABSTRACT
Consider a pure socialist `command' economy, initially functioning in isolation from other economies. In the Central Plan of that economy, each household is assured of a ®xed vector of goods some elements of which may be negative (for example, labour required of the household); and each productive unit or `®rm' is required to produce a ®xed vector of goods some elements of which (the ®rm's net inputs) may be negative. The economy is in `equilibrium' in the sense that all outputs are feasible, each consumption vector is in the relevant consumption set and, commodity by commodity, there is an exact balance between net output and its allocation to households and ®rms. Moreover, the Plan provides accounting prices on the basis of which the pro®ts of ®rms may be calculated, and it allocates the pro®ts to households according to a ®xed formula. Thus, directly and indirectly, the Plan prices determine the Plan budget set of each household.
