The Lange-Lerner-Taylor theorem, asserting the equivalence of market and market socialist economies, is based on a misguided view of the market, of t… - Joseph E. Stiglitz

An early insight in my work on the economics of information concerned the problem of appropriability — the difficulty that those who pay for information have in getting returns.

The neoclassical paradigm, through its incorrect characterization of the market economies and the central problems of resource allocation, provides a false sense of belief in the ability of market socialism to solve those resource allocation problems. To put it another way, if the neoclassical paradigm had provided a good description of the resource allocation problem and the market mechanism, then market socialism might well have been a success. The very criticisms of market socialism are themselves, to a large extent, criticisms of the neoclassical paradigm.

Thus the first objective of state economic policy is to ensure competition. This needs to be taken into account in the process of privatization or reorganizing state enterprises, as well as in the laws allowing the formation of firms, cooperatives, and partnerships. The government must take actions to minimize the barriers to entry.