Oskar Ryszard Lange (27 July 1904 – 2 October 1965) was a Polish

economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...

and diplomat. He is best known for advocating the use of

market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...

pricing tools in

socialist Socialism is a left-wing economic philosophy and movement encompassing a range of economic systems characterized by the dominance of social ownership of the means of production as opposed to private ownership. As a term, it describes the e ...

systems and providing a model of

market socialism Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy, or one that contains a mix of worker-owned, nationalized, and privately owned ...

. He responded to the

economic calculation problem The economic calculation problem (sometimes abbreviated ECP) is a criticism of using economic planning as a substitute for market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article "Eco ...

proposed by

Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and Sociology, sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberali ...

and

Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...

by claiming that managers in a

centrally-planned economy A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, part ...

would be able to monitor

supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...

through increases and declines in

inventories Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the sha ...

of goods, and advocated the

nationalization Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...

of major industries. During his stay in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

, Lange was an academic teacher and researcher in

mathematical economics Mathematical economics is the application of mathematical methods to represent theories and analyze problems in economics. Often, these applied methods are beyond simple geometry, and may include differential and integral calculus, difference an ...

. Later in socialist Poland, he was a member of the

Central Committee Central committee is the common designation of a standing administrative body of Communist party, communist parties, analogous to a board of directors, of both ruling and nonruling parties of former and existing socialist states. In such party org ...

of the

Polish United Workers' Party The Polish United Workers' Party ( pl, Polska Zjednoczona Partia Robotnicza; ), commonly abbreviated to PZPR, was the communist party which ruled the Polish People's Republic as a one-party state from 1948 to 1989. The PZPR had led two other lega ...

.Witold Gadomski, ''Rynek trzyma smycz adomski o książce Belki' (The market holds the leash adomski about Belka's book. 11 June 2016
Rynek trzyma smycz
wyborcza.pl. Retrieved 26 June 2016.

Career

Lange was born in

Tomaszów Mazowiecki Tomaszów Mazowiecki (, yi, טאָמעשעוו or ''Tomashuv'') is a city in central Poland with 60,529 inhabitants (2021). The fourth most populous city in the Łódź Voivodeship and the second with free public transport. In Tomaszów Mazowiec ...

as son of the

Protestant Protestantism is a Christian denomination, branch of Christianity that follows the theological tenets of the Reformation, Protestant Reformation, a movement that began seeking to reform the Catholic Church from within in the 16th century agai ...

manufacturer Arthur Julius Lange and his wife Sophie Albertine Rosner. His ancestors had emigrated at the beginning of the 19th century from Germany to Poland.''Who is Who in Central and East-Europe 1933/34'' Zürich 1935, referenced in: Beate Kosmala: ''Juden und Deutsche im polnischen Haus. Tomaszów Mazowiecki 1914–1939.'' Berlin 2001, p. 227. He studied

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...

and

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

at the

University of Kraków The Jagiellonian University ( Polish: ''Uniwersytet Jagielloński'', UJ) is a public research university in Kraków, Poland. Founded in 1364 by King Casimir III the Great, it is the oldest university in Poland and the 13th oldest university in ...

, where he defended a

doctoral dissertation A thesis ( : theses), or dissertation (abbreviated diss.), is a document submitted in support of candidature for an academic degree or professional qualification presenting the author's research and findings.International Standard ISO 7144: ...

in 1928 under Adam Krzyżanowski. From 1926 to 1927 Lange worked at the Ministry of Labor in

Warsaw Warsaw ( pl, Warszawa, ), officially the Capital City of Warsaw,, abbreviation: ''m.st. Warszawa'' is the capital and largest city of Poland. The metropolis stands on the River Vistula in east-central Poland, and its population is officia ...

, and then was a research assistant at the University of Kraków (1927–31). He married Irene Oderfeld in 1932. In 1934, a

Rockefeller Foundation The Rockefeller Foundation is an American private foundation and philanthropic medical research and arts funding organization based at 420 Fifth Avenue, New York City. The second-oldest major philanthropic institution in America, after the Carneg ...

fellowship brought him to

England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe b ...

, from where he emigrated to the

in 1937. Lange became a professor at the

University of Chicago The University of Chicago (UChicago, Chicago, U of C, or UChi) is a private research university in Chicago, Illinois. Its main campus is located in Chicago's Hyde Park neighborhood. The University of Chicago is consistently ranked among the b ...

in 1938 and was

naturalized Naturalization (or naturalisation) is the legal act or process by which a non-citizen of a country may acquire citizenship or nationality of that country. It may be done automatically by a statute, i.e., without any effort on the part of the in ...

as a U.S. citizen in 1943.

Halik Kochanski Halik Kochanski (born 19 April 1962) is a British historian and writer of Polish origin. Life Kochanski was educated at Downside School and at Balliol College, Oxford, where she was awarded an M.A. in Modern History. She obtained her Ph.D from ...

(2012). The Eagle Unbowed: Poland and the Poles in the Second World War, pp. 612–613. Cambridge, MA: Harvard University Press. .

Joseph Stalin Joseph Vissarionovich Stalin (born Ioseb Besarionis dze Jughashvili; – 5 March 1953) was a Georgian revolutionary and Soviet political leader who led the Soviet Union from 1924 until his death in 1953. He held power as General Secreta ...

, who identified Lange as a person of leftist and pro-Soviet sympathies, prevailed on President

Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...

to obtain a passport for Lange to visit the

Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen national ...

in an official capacity, so that Stalin could speak with him personally; he also proposed offering him a position in the future Polish cabinet. The

State Department The United States Department of State (DOS), or State Department, is an United States federal executive departments, executive department of the Federal government of the United States, U.S. federal government responsible for the country's fore ...

was opposed to Lange traveling as an emissary because they felt that his political views represented neither Americans of Polish descent nor American public opinion in general. Lange's trip to the Soviet Union in 1944 caused further controversy, as the newly established

Polish American Congress The Polish American Congress (PAC) is an American umbrella organization of Polish-Americans and Polish-American organizations. Its membership has fraternal, educational, veterans, religious, cultural, social, business, political organizations, and i ...

condemned him and defended the interests of the

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

-based

Polish government-in-exile The Polish government-in-exile, officially known as the Government of the Republic of Poland in exile ( pl, Rząd Rzeczypospolitej Polskiej na uchodźstwie), was the government in exile of Poland formed in the aftermath of the Invasion of Pola ...

. Lange returned to the United States at the end of May and met, at Roosevelt's request, with Prime Minister

Stanisław Mikołajczyk Stanisław Mikołajczyk (18 July 1901 – 13 December 1966; ) was a Polish politician. He was a Prime Minister of the Polish government in exile during World War II, and later Deputy Prime Minister in post-war Poland until 1947. Biography Back ...

of the government-in-exile, who was on a visit in

Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...

. Lange stressed how reasonable Stalin was prepared to be (Stalin told him of the Soviet desire to preserve an independent Poland under a coalition government), and asked the State Department to put pressure on the exiled Polish leadership to reach an understanding with the Soviet leader.Halik Kochanski (2012). The Eagle Unbowed: Poland and the Poles in the Second World War, pp. 441–444. Towards the end of

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

, Lange broke with the Polish government-in-exile and transferred his support to the Lublin Committee (PKWN) sponsored by the Soviet Union. Lange served as a go-between for Roosevelt and Stalin during the

Yalta Conference The Yalta Conference (codenamed Argonaut), also known as the Crimea Conference, held 4–11 February 1945, was the World War II meeting of the heads of government of the United States, the United Kingdom, and the Soviet Union to discuss the post ...

discussions on post-war Poland. After the war ended in 1945, Lange returned to Poland. He then renounced his American citizenship and went back to the US in the same year as the

Polish People's Republic The Polish People's Republic ( pl, Polska Rzeczpospolita Ludowa, PRL) was a country in Central Europe that existed from 1947 to 1989 as the predecessor of the modern Republic of Poland. With a population of approximately 37.9 million nea ...

's first ambassador to the United States. In 1946, Lange also served as Poland's delegate to the

United Nations Security Council The United Nations Security Council (UNSC) is one of the Organs of the United Nations, six principal organs of the United Nations (UN) and is charged with ensuring international security, international peace and security, recommending the admi ...

. From 1947 he lived in Poland. Oskar Lange worked for the Polish government while continuing his academic pursuits at the

University of Warsaw The University of Warsaw ( pl, Uniwersytet Warszawski, la, Universitas Varsoviensis) is a public university in Warsaw, Poland. Established in 1816, it is the largest institution of higher learning in the country offering 37 different fields of ...

and the Main School of Planning and Statistics. He was deputy chairman of the

Polish Council of State The Council of State of the Republic of Poland ( pl, Rada Państwa) was introduced by the Small Constitution of 1947 as an organ of executive power. The Council of State consisted of the President of the Republic of Poland as chairman, the Marsh ...

in 1961–65, and as such one of four acting chairmen of the Council of State (a

head of state A head of state (or chief of state) is the public persona who officially embodies a state Foakes, pp. 110–11 " he head of statebeing an embodiment of the State itself or representatitve of its international persona." in its unity and l ...

function).

Academic contributions

The bulk of Lange's contributions to economics came during his American interlude of 1933–45. Despite being an ardent

, Lange deplored the Marxian

labor theory of value The labor theory of value (LTV) is a theory of value that argues that the economic value of a good or service is determined by the total amount of " socially necessary labor" required to produce it. The LTV is usually associated with Marxian e ...

because he was very much a believer in the neoclassical theory of price. In the history of economics, he is probably best known for his work ''On the Economic Theory of Socialism'' published in 1936, where he famously put

Marxian economics Marxian economics, or the Marxian school of economics, is a Heterodox economics, heterodox school of political economic thought. Its foundations can be traced back to Karl Marx, Karl Marx's Critique of political economy#Marx's critique of politic ...

and

neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a good ...

together. In the book, Lange advocated the use of

tools (especially the neoclassical pricing theory) in economic planning of socialism and

Marxism Marxism is a Left-wing politics, left-wing to Far-left politics, far-left method of socioeconomic analysis that uses a Materialism, materialist interpretation of historical development, better known as historical materialism, to understand S ...

. He proposed that central planning boards set prices through "trial and error", making adjustments as shortages and surpluses occur rather than relying on a free price mechanism. Under this system, central planners would arbitrarily pick a price for products manufactured in government factories and raise it or reduce, depending on whether it resulted in shortages or gluts. After this economic experiment had been run a few times, mathematical methods would be employed to plan the economy: if there were shortages, prices would be raised; if there were surpluses, prices would be lowered.Dalmia, Shikha, 2012
Cheer Up, Liberty Lovers, Schumpeter Was Wrong
''

Reason Reason is the capacity of consciously applying logic by drawing conclusions from new or existing information, with the aim of seeking the truth. It is closely associated with such characteristically human activities as philosophy, science, ...

'', Feb. 23. Raising the prices would encourage businesses to increase production, driven by their desire to increase profits, and in doing so eliminate the shortage. Lowering the prices would encourage businesses to curtail production in order to prevent losses, which would eliminate the surplus. In Lange's opinion, such

simulation A simulation is the imitation of the operation of a real-world process or system over time. Simulations require the use of Conceptual model, models; the model represents the key characteristics or behaviors of the selected system or proc ...

of market mechanism would be capable of effectively managing

. Proponents of this idea argued that it combines the advantages of a

market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...

with those of

socialist economy Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may t ...

. With the utilization of this idea, Lange claimed, a state-run economy would be at least as efficient as a capitalist or private market economy. He argued that this was possible, provided the government planners used the price system as if in a market economy and instructed state industry managers to respond parametrically to state-determined prices (minimize cost, etc.). Lange's argument was one of the pivots of the

socialist calculation debate The socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices for ...

with the

Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian school ...

economists. At that time, the view among English socialists of the

Fabian Society The Fabian Society is a British socialist organisation whose purpose is to advance the principles of social democracy and democratic socialism via gradualist and reformist effort in democracies, rather than by revolutionary overthrow. The Fa ...

was that Lange had won the debate. His works provided the earliest model of

Robin Hahnel Robin Eric Hahnel (born March 25, 1946) is an American economist and professor emeritus of economics at American University. He was a professor at American University for many years and traveled extensively advising on economic matters all over t ...

, 2005.''Economic Justice and Democracy,'' Routledge, page 170 Hayek's essay entitled "The Use of Knowledge in Society" is a rebuttal to Lange's work and is considered one of the most important articles ever written in the field of economics. Lange also made contributions in various other areas. He was one of the leading lights of the " Paretian Revival" in

general equilibrium theory In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...

during the 1930s. In 1942, he provided one of the first proofs of the First and Second Welfare Theorems. He initiated the analysis of stability of general equilibrium (1942, 1944). His critique of the

quantity theory of money In monetary economics, the quantity theory of money (often abbreviated QTM) is one of the directions of Western economic thought that emerged in the 16th-17th centuries. The QTM states that the general price level of goods and services is directly ...

(1942) prompted his student

Don Patinkin Don Patinkin (Hebrew: דן פטינקין) (January 8, 1922 – August 7, 1995) was an American-born Israeli monetary economist, and the President of the Hebrew University of Jerusalem.Nissan Liviatan, 2008. "Patinkin, Don (1922–1995)," ''The N ...

to develop his remarkable "integration" of money into general equilibrium theory. Lange made several seminal contributions to the development of

neoclassical synthesis The neoclassical synthesis (NCS), neoclassical–Keynesian synthesis, or just neo-Keynesianism was a neoclassical economics academic movement and paradigm in economics that worked towards reconciling the macroeconomic thought of John Maynard Key ...

(1938, 1943, 1944). He worked on integrating

classical economics Classical economics, classical political economy, or Smithian economics is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam Smith ...

and neoclassical economics into a single theoretical structure (e.g. 1959). In his final years, Lange also worked on

cybernetics Cybernetics is a wide-ranging field concerned with circular causality, such as feedback, in regulatory and purposive systems. Cybernetics is named after an example of circular causal feedback, that of steering a ship, where the helmsperson m ...

and the use of computers for

economic planning Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources b ...

. The

International Institute of Social Studies The International Institute of Social Studies (ISS) of Erasmus University Rotterdam is an independent and international graduate school of policy-oriented critical social science. ISS was established in 1952 by Dutch universities and the Neth ...

(ISS) awarded Oskar Lange an honorary fellowship in 1962.

Bibliography

* 1934. "The Determinateness of the

Utility Function As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosopher ...

," RES. * 1935. "

Marxian Economics Marxian economics, or the Marxian school of economics, is a Heterodox economics, heterodox school of political economic thought. Its foundations can be traced back to Karl Marx, Karl Marx's Critique of political economy#Marx's critique of politic ...

and Modern Economic Theory," ''Review of Economic Studies'', 2(3), pp
189
��201. * 1936a. "The Place of Interest in the Theory of Production", RES * 1936b. "On the Economic Theory of Socialism, Part One," ''Review of Economic Studies'', 4(1), pp
53
��71. * 1937. "On the Economic Theory of Socialism, Part Two," ''Review of Economic Studies'', 4(2), pp.
123
��142. * 1938. ''On the Economic Theory of Socialism,'' (with

Fred M. Taylor Fred Manville Taylor (July 11, 1855, Northville, Michigan – August 7, 1932) was a U.S. economist and educator best known for his contribution to the theory of market socialism. He taught mostly history at Albion College from 1879 to 1892. He t ...

), Benjamin E. Lippincott, editor. University of Minnesota Press, 1938. * 1938. "The Rate of Interest and the Optimum Propensity to Consume", ''Economica'' * 1939. "Saving and Investment: Saving in Process Analysis", QJE * 1939. "Is the American Economy Contracting?", AER * 1940. "Complementarity and Interrelations of Shifts in Demand", RES * 1942. "Theoretical Derivation of the Elasticities of Demand and Supply: the direct method", Econometrica * 1942. "The Foundations of Welfare Economics", Econometrica * 1942. "The Stability of Economic Equilibrium", Econometrica. * 1942. "

Say's Law In classical economics, Say's law, or the law of markets, is the claim that the production of a product creates demand for another product by providing something of value which can be exchanged for that other product. So, production is the source ...

: A Restatement and Criticism", in Lange et al., editors, Studies in Mathematical Economics. * 1943. "A Note on Innovations", REStat * "The Theory of the Multiplier", 1943, ''Econometrica'' * "Strengthening the Economic Foundations of Democracy", with Abba Lerner, 1944, American Way of Business. * 1944. ''Price Flexibility and Employment''. * 1944. "The Stability of Economic Equilibrium" (Appendix of Lange, 1944) * 1944. "The Rate of Interest and the Optimal Propensity to Consume", in Haberler, editor, Readings in Business Cycle Theory. * 1945a. "Marxian Economic in the Soviet Union," ''American Economic Review'', 35( 1), pp
127
��133. * 1945b. "The Scope and Method of Economics", RES. * 1949. "The Practice of Economic Planning and the Optimum Allocation of Resources", ''Econometrica'' * 1953. "The Economic Laws of Socialist Society in Light of Joseph Stalin's Last Work", Nauka Paulska, No. 1, Warsaw (trans ., 1954, ''International Economic Papers'', No. 4, pp. 145–ff. Macmillan. * 1959. "The Political Economy of Socialism," ''Science & Society'', 23(1) pp
1
��15. * ''Introduction to Econometrics'', 1958. * 1960. "The Output-Investment Ratio and Input-Output Analysis", Econometrica * 1961. ''Theories of Reproduction and Accumulation'', * 1961. ''Economic and Social Essays, 1930–1960''. * 1963. ''Political economy'', Macmillan. * 1963. ''Economic Development, Planning and Economic Cooperation''. * 1963. ''Essays on Economic Planning''. * 1964. ''Optimal Decisions: principles of programming''. * 1965. Problems of Political Economy of Socialism, Peoples Publishing House. * 1965. ' 'Wholes and Parts: A General Theory of System Behavior'', Pergamon Press. * 1965. "The Computer and the Market", 1967, in Feinstein, editor, Socialism, Capitalism and Economic Growth. * 1970. ''Introduction to Economic Cybernetics'', Pergamon Press. Revie
extract.

Citations

References

* Milton Friedman, 1946. "Lange on Price Flexibility and Employment: A Methodological Criticism", ''American Economic Review'', 36(4)
pp. 613–
631. Reprinted in Friedman, 1953,

Essays in Positive Economics Milton Friedman's book ''Essays in Positive Economics'' (1953) is a collection of earlier articles by the author with as its lead an original essay "The Methodology of Positive Economics." This essay posits Friedman's famous, but controversial, pr ...

, pp. 277–300. * Charles Sadler, 1977. "Pro-Soviet Polish-Americans: Oskar Lange and Russia's Friends in the Polonia, 1941–1945", ''Polish Review'', 22(4), pp
25
��39.

External links

*
Oskar Lange in Encyclopædia Britannica.
*

In the History of Economic Thought by the

Institute for New Economic Thinking The Institute for New Economic Thinking (INET) is a New York City–based nonprofit think tank. It was founded in October 2009 as a result of the 2007–2012 global financial crisis, and runs a variety of affiliated programs at major universitie ...