The Role Of The Plan

The economic reform of 1960's in Czechoslovakia attempted switch to the Socialist Market Economy. That raised the question of compatibility of central planning with the market mechanism. This paper tries to show, that the Soviet-type Command planning is truly incompatible with market. The plans that would be compatible must be flexible, nonobligatory and probabilistic. They must not prescribe specific compulsory targets, but rather recommend ranges of desirable output and other indicators, and they should be frequently adjusted to changing conditions.