"Drewnowski's Economic Theory of Socialism," by Paul Craig Roberts: A Reply

Abstract

I read with interest the article by Paul Craig Roberts (1968) on my earlier contribution to this Journal, where I suggested new approach to the economic theory of socialism (Drewnowski 1961). 1\Iuch as I welcome the revived interest in the problems which I consider of utmost importance for the development of economic theory, I feel obliged to comment on the article in question to prevent my theory from being misunderstood. It certainly is misunderstood by Roberts, for two main reasons. First, he has evidently missed the crucial point in my approach; then, he does not seem to interpret correctly the concept of preferences and the meaning of their revelation. It is to the clarification of these two points that I shall limit my reply. In my article, the main contribution to economic theory I tried to present was the principle of dual valuation. I stated that two systems of valuation exist in socialist economic systems (and not only there), and contended that this fact has to be recognized in economic theory. The two systems are the state valuation (or preference) system by which the national plans are guided, and the consumers' valuation system which determines consumers' market behavior. Once this duality is recognized, important consequences follow. On that basis the whole theory of socialism can be reconsidered and given new and realistic content. Even more important, it seems that this approach makes possible formulation of more general theory in which socialism and capitalism would become special cases. Of course, all that could not be elaborated in my article, which was only a for reconsideration. However, the elements of that new theory were formulated there. The success or failure of my suggestion depends on whether such theory will ever be developed. I hope it will. Roberts may doubt it, but to argue his case he must tackle the main issues. As it is, his article does not even approach the