Socialist Calculation Debate

The Socialist Calculation Debate was a discussion in the early 20th century about whether a socialist economy, where the government owns resources, could efficiently allocate goods and services without market prices. Economists like Ludwig von Mises argued that without free markets and profit signals, planners could not determine the true value of products or decide how to allocate resources effectively. Others believed technological advancements and planning could overcome these issues. The debate highlighted the challenges of central planning versus market-based systems, influencing economic thought on the feasibility and efficiency of socialism.