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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA

and other deviations from competition in the private sector. If
the private sector did not exist, those problems would certainly
disappear, but they would be replaced by other serious problems,
namely the problems of placing rational valuations on the goods
and services dealt with in the economy. In effect, there is no competitive
 sector in a centralized economy; every sector is monopolized
by one government bureau or another. Whether a centralized economy
 can, in some manner, simulate the operation of a private
competitive economy is still open to grave doubt — it has not yet
seen done.
Whether the difficulties presented by an independent market
sector or those resulting from the lack of free market prices are the
more serious is an empirical problem that I am not in a position to
resolve. I am, however, more impressed than Professor MAHALANO-BIS
 with the inefficiencies that have been experienced when attempts
are made to plan an economy without having a frame of reference
such as is provided by a system of market prices.

MAHALANOBIS

I was not referring to a centrally-planned economy of the type
in which there would not be any market, I was referring to a
centrally-planned economy in which everything which a government
 would like to plan, it could, and everything it would like to
leave to a market, it could again do so. I was also referring to the
difficulties in an economy in which some particular aspects could
not be planned, because of institutional factors.

JOHNSON

There are two comments about the procedure as outlined by
Prof. DORFMAN in his ingenious paper. It seems to me that you
indicate partly in the manuscript and partly in vour discussion

3] Dorfman - pag. 24