calculate Economic Calculation

Problem of resource allocation without prices

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"The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system."

von Mises, Ludwig event 1949

menu_book Human Action: A Treatise on Economics

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"The paradox of 'planning' is that it cannot plan, because of the absence of economic calculation. What is called a planned economy is no economy at all. It is just a system of groping about in the dark. There is no question of a rational choice of means for the best possible attainment of the ultimate ends sought. What is done is simply to muddle through."

von Mises, Ludwig event 1949

menu_book Human Action: A Treatise on Economics

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von Mises, Ludwig

Austrian-American economist, founder of the Austrian School of economics, known for his work on economic calculation and praxeology

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