THE ROLE OF PRICES IN A SOCIALIST ECONOMY

This is a paper presented at the East-West economic conference in Plovdiv, Bulgaria, 1964. The paper outlines the main features of price policy in the Soviet-type socialist system of Eastern Europe. All the prices were centrally fixed, with the main aim to achieve planned standard of living for the population, but disregarding the goal of keeping the balance between supply and demand for individual commodities. The criticism of the adverse effects of such a policy is presented, and the transition to the free markets with prices to be determined by supply and demand as it was outlined in the blueprint for the Czechoslovak economic reform of 1960's is wholeheartedly recommended.