Front Page Titles (by Subject) Market Socialism - Literature of Liberty, January/March 1978, vol. 1, No. 1
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Market Socialism - Leonard P. Liggio, Literature of Liberty, January/March 1978, vol. 1, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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“Socialism and the Market.” Political Theory (USA), 5 (1977): 473–489.
Can a suitably designed market economy satisfy the moral aspirations of a socialist? The motivation behind this proposal is the conviction that planned economies have not succeeded on economic grounds alone, even if one ignores their obvious failures to achieve the democratic ideal. Planned economies failing to coordinate production with demand thus result in surpluses of unwanted goods and black markets; nor have these economies produced the quality of goods attained in market economies. In addition to these obvious failings of planned economies, the works of contemporary political philosophers (Robert Nozick and John Rawls) compel us to reexamine the supposed incompatibility of socialist aspirations and a market economy.
The kind of “market” envisioned differs from a traditional free market. This market involves state ownership of the means of production with cooperatives leasing these factories from the state. Goods would be sold on an open market; the private hiring of labor would be prohibited; and an extensive social welfare system would supplement the incomes of unprofitable cooperatives. Such a system might not be as efficient as capitalism, but it would be more efficient than socialism.
The remaining question, then, is whether market socialism can satisfy traditional socialist aspirations of a noneconomic kind. These objections against the market may then pass muster to see whether they would also hold against “market socialism,” i.e., the contentions 1) that the market is socially unjust because it does not distribute goods according to need or to desert; 2) that it engenders acquisitiveness; 3) that the market produces alienation; and 4) that it destroys altruism and human community.
The socialist concludes that market socialism provides a reasonable compromise between the claims of social justice and efficiency. To all the specified objections, he answers that market socialism will not fall victim to these allegations. Of the four charges, the last poses the most difficult problem for market socialism, i.e., promoting community.
Socialists recognize the deficiencies of socialism as both a means of maximizing production and satisfying consumer demand. Socialism is in trouble. Socialists can acknowledge that the market is the most efficient way in which to satisfy consumer demands and to allocate scarce resources. Hence, their solution: an attempt to fuse socialism with a market. Naturally, the market proposed bears scant resemblance to a free market. What it amounts to is something akin to the old guild socialism approach—but within the framework of a nation state.