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Capitalism operates only on the basis of private costs, only private costs are rewarded and repaid, and not social costs. And even in a competitive capitalism where competition forces producers to sell at cost price takes into account only private costs and not social costs.

— Oskar R. Lange

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Source: "The Economic Operation of a Socialist Society: I", lectures in 8 May 1942, published in Contribution to Political Economy (1987)
Source quality: Precise citation Points to a specific work with a page, chapter, date or similar locator, so you can look it up.

More by Oskar R. Lange

The capitalist system is far removed from the model of a competitive economy as elaborated by economic theory. And even if it conformed to it, it would be, as we have seen, far from maximizing social welfare. Only a socialist economy can fully satisfy the claim made by many economists with regard to the achievements of free competition.

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Human needs, although originally derived from biological necessity, are thus a result of the existence of society and are conditioned by the stage of development which society has reached.

Political Economy: Vol. 1. General Problems (1963)

The actual capitalist system is much better described by the analysis of Mrs. Robinson and of Professor Chamberlin than by that of Walras and of Marshall. But the work of the latter two will be more useful in solving the problems of a socialist system.

If people want to anticipate the development of Capitalism over a long period a knowledge of Marx is a much more effective starting point than a knowledge of Wieser, Boehm-Bawerk, Pareto or even Marshall (though the last-named is in this respect much superior). But Marxian economics would be a poor basis for running a central bank or anticipating the effects of a change in the rate of discount.

The fundamental propositions of the theory of interest being obtained from a theory of production into which time does not enter as a variable, it follows that interest is not connected with time in any different way from the way in which the general theory of production is connected with time.

Mathematical programming assisted by electronic computers becomes the fundamental instrument of long-term economic planning, as well as of solving dynamic economic problems of a more limited scope. Here, the electronic computer does not replace the market. It fulfils a function which the market never was able to perform.

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