Models of Static Equilibrium Banish Rivalry and Employ a Centralized Walrasian Auctioneer Instead

The neoclassical paradigm, represented by the market socialists in the debate, has recognized and elaborated upon this latter guiding role of prices but has largely ignored their rivalrous underpinning. Models of static competitive equilibrium banish economic rivalry from the scene and employ the construct of a (centralized) Walrasian auctioneer to adjust the prices that the actual participants passively accept as “parametric.” Within this essentially static framework it seems quite plausible to imagine a central planning bureau fulfilling the auctioneer’s duties. But, as is being increasingly recognized today, this neoclassical price adjustment model is inadequate for dealing with actual market behavior, and many of the same criticisms that present-day Austrian economists are leveling against this model can be leveled with equal force against modern central planning theory.

—Don Lavoie, introduction to Rivalry and Central Planning: The Socialist Calculation Debate Reconsidered (Cambridge: Cambridge University Press, 1985), 24.