Oskar Ryszard Lange was an Economics Professor at the University of Krakow, the University of Michigan, the University of Chicago, and the University of Warsaw. During his lifetime, he also held the following positions: Ambassador to the United States, Poland's Delegate to the United Nations and the Chairman of the Polish State Economic Council. He is best known for his work in the economics of socialism. Throughout his life, he seesawed back and forth in his opinion of the economic feasibility of socialism.
According to Dr. David Henderson, In the 1930's, Lange "entered the debate with Friedrich von Hayek about the feasibility of socialism. He presented 'market socialism' in which the government would own major industries and a central planning board (CPB) would set prices for those industries. The CPB would alter prices to reach equilibrium, raising them to get rid of shortages and lowering them to get rid of surpluses. Hayek pointed out that having government set prices to mimic competition, as Lange suggested, seemed inferior to having real competition. Whether in response to Hayek's criticism or for other reasons, Lange modified his proposal, advocating that only in industries with few firms would he have the government set prices." He believed that "a large private sector was necessary to preserve 'the kind of flexibility, pliability, and adaptiveness that private initiative alone cannot achieve.'" Lange, along with Abba Lerner, believed that "public ownership may combined with many virtues of a price system under a regime of 'market socialism'."
Lange was also very interested in the methodology of economics, and argued that theoretical economics should be viewed as a deductive science. According to Lange, " Theoretical economics puts the pattern of uniformity in a coherent system. This is done by presenting the laws of economics as a deductive set of propositions derived by the rules of logic (and of mathematics) from a few basic propositions. The basic propositions are called assumptions or postulates, the derived propositions are called theorems. Theoretical economics thus appears (like all other theoretical sciences) as a deductive science. This, however, does not make it a branch of pure mathematics or logic. Like the rest of economics, economic theory is an empirical science. Its assumptions or postulates are approximative generalizations of empirical observations... Some inaccuracy of approximation...is accepted for the sake of greater simplicity. The theorems, in turn, are subjected to test by empirical observation. A deductive set of theorems to be subjected to empirical test is also called a theory, hypothesis, or a model. We can thus say that theoretical economics provides hypotheses or models based on generalizations of observations and subject to empirical test."
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