Oskar Lange was a very famous economist who debated Ludwig von Mises and Friedrich von Hayek on the feasibility of socialist calculation.
In 1936 and 1937 he entered the debate with Friedrich Hayek about the feasibility of socialism. He presented “market socialism,” in which the government would own major industries and a central planning board (CPB) would set prices for those industries. The CPB would alter prices to reach equilibrium, raising them to get rid of shortages and lowering them to get rid of surpluses. Hayek pointed out that having government set prices to mimic competition, as Lange suggested, seemed inferior to having real competition. Whether in response to Hayek’s criticism or for other reasons, Lange modified his proposal, advocating that the government set prices only in industries with few firms.
That’s all well and good – so how does this story end?
In their memoir Two Lucky People Milton and Rose Friedman have this at page 55: