BL With a new preface by the authors This is an important work of original scholarship by two of the most distinguished East European economists now working in the West. The authors, both of whom were involved in the Planning Office of the Polish economy in the 1950s and 1960s, present here the results of their efforts to develop theoretically a system of economic management which could in practice avoid the worst excesses of both market capitalism and central planning. The conclusions derived from this analysis are shown to open up a new dimension to the `socialism versus capitalism' controversy which has dominated much of the world throughout the twentieth century and which is especially significant as the countries of East and Central Europe re-structure their economies.