ABSTRACT
This chapter examines the issue of an adjustment mechanism in centrally planned economies within a framework of futures market functions. It also examines the identity of functions against uncertainty in centrally planned systems and forward trading, basically with a contribution by J. R. Hicks. The chapter explores the identity to eliminate income variance caused by uncontrollable factors mainly with a work by R. McKinnon. It investigates efficiency of spot market adjustment in commodity exchanges. Market trade means transactions done voluntarily between each economic agent, with market prices as a signal. The vertical integration could be observed in market economies with rational reasons. Even under market economies, devices to reduce uncertainty through government intervention could exist. With regard to the function of coordinating price-expectations and coordinating plans, centralized economies have the same functions as market economies. The long-term contract, in market economies, is concluded voluntarily between private enterprises.
