Conjecture

The strongest argument for prices in the book is not that planners lack information, it is that pricing is the only computationally tractable form of the solution even for someone who has all of it. What the man on the spot needs is never the cause but the relative effect: it does not matter to him why more screws of one size are wanted at that moment, only how much more or less difficult they have become to procure compared with other things he is concerned with, and how much more or less urgently his alternatives are wanted. Part I then cites the decisive result from the pure logic of choice: even if all the relevant data were available to a single mind, the only way it could solve a problem of this kind parsimoniously would be by constructing and constantly using rates of equivalence, which is to say by assigning marginal rates of substitution to scarce resources. So a sufficiently informed planner would have to invent prices. The price system is not a workaround for ignorance, it is the shape the answer has to take.

Capital mechanisms