SEMAINE D'ÉTUDE SUR LE ROLE DE L ANALYSE ECONOMETRIOUE ETC. 
7 | 
‘hat are entering into some from of co-operation. Should some in- 
dustry be located in country No. 1 in this group; or in country No. 2: 
Which one of the countries should concentrate on agriculture, etc. 
There may certainly be differences of opinion in these questions and 
[ think, I have fully realized this problem and I have made at least 
one attempt to overcome it. This is presented in pages 28 to 37 in 
‘he blue pamphlet. I have written nine pages about this particular 
problem but you will forgive me for not having been able to squeeze 
this into my oral presentation. I am referring to the section on the 
construction of the coalition preference function. So my feeling is 
that IT have not neglected the question of differences of desires. But 
somehow such differences must be ironed out if the economy of the 
country is to be steered and not be left to drift whither the wind 
blows. It is the task of the political machinery to solve the problem 
of differences of opinion. We as economists have to accept that 
solution. 
Prof. ALLAIS said he had the feeling that this decision problem 
is solved in the free market system. My answer is that the optimal 
solution corresponding to the desires of the political authority can 
never be realized by the free market system, or more precisely there 
is a probability of measure o that it will be. Why is it so? Because 
the free market system does not open any possibility of expressing 
political preferences or preferences of a very special sort. There is a 
great number of special political preferences. I have mentioned 
some, I could have mentioned many more. The problems are specific 
and they are great in number. I would like to see somebody sit down 
and list a number of these specific preferences and then set out to 
prove that the free market system will realize all of them simul 
‘aneously. 
Prof. FisHER when he went to the blackboard referred to some 
specific vertex of the admissible region, and he suggested that we 
may take this vertex as the starting point for a marginal analysis 
and discuss the matter of optimality with the policy-maker by start- 
ng from this vertex. At least that is what I got out of Prof. FISHER’s 
‘ntervention. This is very much against what I have tried to say 
1 Frisch - pag. 31