ABSTRACT
We have now considered at length the problem of the allocation of resources to various uses in a completely competitive laissez-faire stationary economy. In the three remaining chapters of this volume we will consider how these same problems would present themselves in a completely socialized, centrally planned stationary economy. We maintain all the ten assumptions made in Chapter I (pp. 26-27) except for assumption (3). Assumption (3) stated that the economy was organized on the basis of completely competitive institutions, each individual citizen being free to organize the production of whatever he chose in whatever manner he chose, to hire out his own labour services and the services of his privately owned land to any employer he chose for any use he chose, and to purchase for consumption whatever he chose. We will now start by replacing this extreme laissez-faire assumption by another assumption which is equally extreme in the opposite direction. We will assume that there is a single central planning authority which owns all the land (i.e. all the productive resources other than the services of labour), which appoints managers of various firms and farms, which allots to each of these managers the amounts of the various factors of production (various classes of labour and various kinds of land) for his employment, which informs each manager how much of each product he is required to produce with these resources, which directs the individual citizens to the various firms and farms for work, and which allots the finished products to the individual consumers for their enjoyment.
