Abstract
After the collapse of Soviet Socialism together with globalization of capitalist market economy, academic interest has rather been re-intensified all over the world how to reconsider the controversial issue on market and socialism. This paper attempts to clarify the significance and some problems in contemporary theories of market socialism, especially focusing on John Roemer's socialist model in view of his ideas and methodological foundation. Roemer recognized the loss of incentives (principal-agent problems) and innovative competition as a main reason of the failure of Soviet Systems. To solve this problem, in contrast to Lange and Brus model, he incorporates the coupon stock market which provides the same discipline over firm management as a capitalist stock market does. The coupon share's price of a firm functions as a signal that banks monitor closely the management. In Roemer's model, because money cannot be used on the coupon stock market, the small class of wealthy citizens will not end up owning the majority of shares. Thus, concentration of ownership of firms into a small-sized class of people is prevented. Furthermore, the definition of socialism is modified as realization of egalitarianism concerning opportunities for self-realization, welfare, political influence and social status. However, this paper argues that Roemer's model lacks clear explanation on ownership structures of banks, as well as on historical and practical relevance of the social change and systemic transformation. This paper also emphasizes Roemer's methodological constraints in the neoclassical general equilibrium theory which copes with technology and knowledge (information) as given. Roemer's model is in this sense regarded as a mere analytical expansion of Lange model, just adding to it incentive compatibility plus a functional unbundling in property rights. Critical arguments for socialism by Austrians such as Hayek may still remain appropriate for Roemer's market socialist model. In order to deepen and broaden further the theoretical significance of the continuous socialist economic calculation debate or the controversy on market socialism, we need, not only to make socialist visions more clearly, but also to reconsider possibilities of alternative theoretical frameworks besides neo-classical price thories, such as Sraffian price theory and Marxian value theory, which are unfortunately almost forgotten in the whole debates.
