ABSTRACT
The neoclassical economics of the period had little to say about imperfect information, transaction costs, agent-principal relations, and the like, and the debate revolved around the question of static efficiency: whether resources could be efficiently allocated in a country where private ownership of land and capital had been abolished. Of those who contended they could not, it was Ludwig von Mises who made ownership the key issue. Western economists trying to account for differences in efficiency between different economic systems dwell on the issue of planning versus markets and neglect the role of ownership in the working of markets. By the time Soviet leader Mikhail Gorbachev began to launch perestroika, such ideas had, in Eastern Europe, come to seem naive. Despite the uncertainty that exists about the exact nature of a desirable reform, one fundamental requirement of a reformed economic system is present either explicitly or implicitly in the writings of most Soviet and East European reformers.
