The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Market Socialism

Reference work entry


Market socialism is a theoretical concept (model) of an economic system in which the means of production (capital) are publicly or collectively owned, and the allocation of resources follows the rules of the market (product-, labour-, capital-markets). With regard to existing socialist economies the term is often applied more loosely to cover both systems which tend to approximate it in the strict sense (as the Yugoslav system in the aftermath of the 1965 reform), as well as those which replace commands and physical distribution of producer goods by financial controls and incentives as instruments of central planning (‘regulated market’, as in the Hungarian ‘new economic mechanism’ after the 1968 reform).

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • W. Brus
    • 1
  1. 1.