People Produce for Profit But To Imply That Production for Profit Does Not Mean Production to Satisfy Needs, Is Entirely False

We refer to the objection that in capitalist societies prices are used as indicators of profitability. People produce for profit, it is said. This statement is correct. If the commodity to be produced, or resold, is not demanded at a price that covers costs, it will not be produced or bought at that price. On the other hand, to imply that production for profit does not mean production to satisfy needs, is entirely false. The contrary is the case. The producers' and traders' every effort is directed towards anticipating and satisfying the needs of the buyers, in the last resort the needs of the public, such as they are expressed in effective demand. The success of producers and traders will depend on their ability to do this. Their ability to anticipate correctly will decide whether the result will be profit or loss, which in the long run will decide whether they can stay in business or not.

Professor Boris Brutzkus goes so far as to say that the producer and trader in a capitalist country, strictly speaking, does not need to keep books or to calculate, as prices will give him all necessary indications. If he does not take heed of prices, he risks losing his fortune and his position. In socialist countries where the state is the only owner of the means of production and the only distributing agency, this automatic purging process does not exist, so that, as Brutzkus says, “economic calculation is of far greater significance in the socialist, than in the capitalist society.” (Economic Planning in Soviet Russia, p. 11.)

—Trygve J. B. Hoff, appendix A of Economic Calculation in the Socialist Society, trans. M. A. Michael (London: William Hodge and Company, 1949), 198, 198n.