Reply To: Market Socialism and Economic Calculation:


Ludwig von Mises deals with this very case in his book, Human Action. As he points out, central planners allocate capital funding to the managers. The central planners, then and not managers, must perform the entrepreneurial function of anticipating what use of resources will economize for consumers at large not the managers. In a market economy this function of allocating capital funding is done by capitalists, i.e., private investors, who invest their saving into lines of production that they anticipate will render monetary profits and not losses. Central planners cannot refer to the structure of prices to determine how to allocate resources for the benefit of consumers at large.

Take a look at chapter 26 in Human Action: