Socialist Calculation Debate
The socialist calculation debate occurred during the 1920s and 1930s between free-market economists Ludwig von Mises and F.A. Hayek and economists Fred M. Taylor, Abba Lerner, and Oskar R. Lange who, among others, promoted market socialism. The market socialists argued that, given appropriate information, economic planners might successfuly plan an economy. Mises and Hayek argued that prices set outside of the context of the market forces of supply and demand convey no information about the value of goods. Instead officials determine them arbitrarily in a socialist economy. The setting of prices without knowledge and without incentive provided by profits leads to either shortages or gluts of different goods and services.
Ivan Pongracic - Ludwig von Mises and the Socialist Calculation Debate
Steve Horwitz - The Socialist Calculation Debate