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From:
[log in to unmask] (Samuel Bostaph)
Date:
Sun Jul 29 09:11:04 2007
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What is missing here is Hayek's implicit reliance on the core point of
Mises's critique of socialism. The most important information to
gather for planning purposes if efficiency in production is wanted is that
of relative scarcity--as represented most importantly by resource prices in a 
market system, and unavailable in a socialist economy. The purpose of the firm 
in a market economy is to produce at the least cost in order to maximize
profit, given anticipated commodity prices. A firm in a national
or international market economy is able to gather the information to
calculate expected resource prices, as well as those for the commodities
they plan to produce.

Government planners have no market to resort to for the price information 
that is needed for least cost production, whatever the other information 
concerning technology, workforce skills, physical availability of resources, etc.  
As Mises argued, their only resort is ad hoc or arbitrary decisionmaking.

Samuel Bostaph

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