Human needs, although originally derived from biological necessity, are thus a result of the existence of society and are conditioned by the stage of… - Oskar Lange

An economic system based on private enterprise and private property of the means of production can work only as long as the security of private property and of income derived from property and from enterprise is maintained. The very existence of a government bent on introducing socialism is a constant threat to this security. Therefore, the capitalist economy cannot function under a socialist government unless the government is socialist in name only.

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 capitalist system is far removed from the model of a competitive economy as elaborated by economic theory. And even if it conformed to it, it would be, as we have seen, far from maximizing social welfare. Only a socialist economy can fully satisfy the claim made by many economists with regard to the achievements of free competition.