State Enterprise Price and Output Policy and the Problem of Cost Imputation

THE contribution to The Marginal Cost Controversy by Mr. Coase in the August 1946 issue of Economica has prompted some thoughts on this question which I will attempt to express in this article. What a salutary thing it is that in the same issue there should appear Mr. A. Radomysler's criticisms of Mr. Lerner's pedantically-specialist view of Welfare Economics and Economic Policy contained in the latter's The Economics of Control. Though, in' quoting Mr. Lerner, Mr. Radomysler omits the proviso in, Except when they radically affect the working of the system, we must leave to the politicians the political problems of compromise, he is surely right in his view that in this book one is apparently being urged to assume that the satisfaction of the Rule (the equalisation of price and marginal cost) will solve the world's problems, and that the choice between leaving an industry in private hands or nationalising it may be determined solely by reference to the likelihood of the Rule being satisfied

Compromise · Economics · Imputation (statistics) · Marginal cost · Marginal utility · Microeconomics · Neoclassical economics · Political science · Politics · Positive economics · Public economics · State (computer science) · Economic Theory and Policy · Law