The book you hold in your hands was inspired by an article on Oskar Lange’s proposition of a “market socialism” that I began writing in 2005, and later published in the Quarterly Journal of Austrian Economics. Lange argued that socialist planners could use a central calculation of profits and losses that would make economic projects as efficient as in the market framework. I aimed to show that such calculations were, in fact, economically meaningless, because the planners were to make them. By setting prices for the means of production, and subsequently by adjusting them, they decide, in effect, what should be produced, what should not, based on their own judgement. Prices do not affect their actions as they would an entrepreneur in a market. Such a simple observation led me to further reflect on the nature of monetary calculation, which eventually gave me a new perspective on the debate on whether socialist economies can function or not. Although a few thinkers have raised this argument, their voices have never gained serious influence on the debate about socialism.

The problems set forth in this book regard property laws in an economic context – a comparison between capitalism and socialism. Therefore I shall not discuss legal history, case studies or legal details arising in the relevant economic systems. The notion of property laws interests me as a theoretical category in light of economics, not law, anthropology, or history. Similarly, I talk about socialism and capitalism in the abstract. Capitalism is defined as a system built on the free exchange of property deeds, which is not present in socialism. These two categories do have their concrete and pure historic occurrences, but I shall regard them as purely theoretical. The same is true for the idea of ownership, which is an owner’s capability to control, use and dispose of various real-world entities. Real ownership is therefore not necessarily equal to how legislators define “ownership” in legal systems.

Because the debate on the comparison between socialism and capitalism is already a part of the history of economic thought, this book builds on the conclusions drawn from that debate, on economic calculation in socialism and the impossibility (or possibility, according to others) of its application.