It seems to us, indeed, that the real danger of socialism is that of a bureaucratization of economic life, and not the impossibility of coping with t… - Oskar Lange

The rules of consistency of decisions and of efficiency in carrying them out in a socialist economy are exactly the same as those that govern the actual behavior of entrepreneurs on a purely competitive market. Competition forces entrepreneurs to act much as they would have to act were they managers of production in a socialist system. The fact that free competition tends to enforce rules of behavior similar to those in an ideal planned economy makes competition the pet idea of the economist. But if competition enforces the same rules of allocating resources as would have to be accepted in a rationally conducted socialist economy, what is the use of bothering about socialism? Why change the whole economic system if the same result can be attained within the present system, if only it could be forced to maintain the competitive standard?
But the analogy between the allocation of resources in a competitive capitalist and a socialist economy is only a purely formal one. The formal principles are the same, but the actual allocation may be quite different.

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.

The administration of scarce resources is influenced by the standards of civilisation and by the organisation and institutions of the society in which men live. The influence is a two-fold one. The wants which the resources serve to satisfy are produc of standards of civilisation historically developed in society. The ways in which scarce resources are procured, adapted to various purposes, distributed among different persons are all results of social organisation and social institutions. Forms of ownership, institutions like corporations and banks, technical knowledge acquired in institutes of research and transmitted by schools, regulation by government agencies, habits and moral standards all influence the ways of administering scarce resources.