Tom Bottomore.Problems and Prospects of a Socialist Economy in Europe. RM 4(3):109-116 "A development of earlier arguments (Bottomore, T., The Socialist Economy, New York: Guilford Press, 1990) in an effort to illuminate the problems and prospects of a socialist economy in Europe. It is argued that a vigorous reassertion of the real achievements of planning and public ownership, in concert with a critical examination of the problems that have emerged in both capitalism and socialism, is greatly needed. To this end, several issues relating to socialist economics are discussed: the role of bureaucracy and the degree to which it may impede innovation and growth; how to relate planning to markets; the optimum level of public ownership in planned economies; the internal organization and degree of autonomy of public enterprises; the possible defects of bureaucratic management with respect to innovation; and the type of incentives that would stimulate high productivity. The process of creating a socialist economy is described based on three fundamental postulates: (1) public ownership of major financial institutions and infrastructural services is essential; (2) there should exist a substantial sphere of private production; and (3) publicly owned enterprises and services should have a high degree of autonomy. 6 References. W. Howard"