ABSTRACT
This chapter investigates the limitations of central and price system controls over choice and allocation, considering them both as limiting cases on a continuum. It examines both the range of variation in use of price system and central control techniques and the functional relationship between the use of these techniques and particular social goals. The chapter analyzes wartime choice and allocation processes as a case study of the shortcomings of the price system. Similarly for individual market choice, allocations may be through hierarchical controls or price system. The core of the case for price-induced allocations is, of course, that they are an essential part of an elaborate price system process through which costs can be represented in prices and in which costs take account of occupational and other producer preferences. Research into the relationship of market structures and price policies holds out some hope that small doses of hierarchical controls over market structures may be used to improve price policies.
