Speaking very broadly, almost any human action involves choice; the external environment delimits a range of possible actions at any given moment but… - Kenneth Arrow

What can be concluded? We cannot be sure that the principles of democracy and socialism are compatible until we can observe a viable society following both principles. But there is no convincing evidence or reasoning which would argue that a democratic-socialist movement is inherently self-contradictory. Nor need we fear that gradual moves in the direction of increasing government intervention will lead to an irreversible move to “serfdom.”

Government economic policy, like almost any realistic decision problem, has two fundamental characteristics: it is sequential and it is uncertain.

Finding out the prices of a large range of commodities is itself a costly enterprise, and knowledge of this fact by price setters is itself enough to create incentives for inefficient market behavior. If one individual has more information about the quality of a good than the second, the first may exploit the situation, and the second, distrusting him, may not take advantage of what is in fact a desirable trade.