The economic calculation problem in brief: how can society economizingly direct scarce resources in the present toward different uses in order to produce goods that satisfy future consumer wants?
The problem is one of satisfying consumers on consumers' own terms (at the time they prefer). Central planning averts this problem by simply replacing consumers' wants with the planner's preferences and schedule, thus not generating much in way of actual satisfactions.
The problem is also one of economizing: using resources in the best way possible, from the point of view of consumers' future valuations. Central planning does not do this at all. Suggested solutions (Taylor, Lange) only maximized based on consumers' valuations in the past.
In markets, resources are directed by prices, which are generated by entrepreneurs collectively as they bid for resources risking their private property in the profit-loss system. The importance is not to have prices, but what the prices represent.
True factor market prices emerge out of the entrepreneurial division of intellectual labor. They are future prices, an aggregation of entrepreneurs' personal, acted-on, and thus decentralized expectations of consumer valuations.
Market prices for factors adjust quickly to changing circumstances even though most entrepreneurs are unaware of those exact circumstances, as Hayek expertly showed. fee.org/articles/the-u…
But Hayekian adjustments are possible because entrepreneurs have already acted, and keep acting, with respect to their personal expectations of consumer valuation (and, thus, profit/loss). That's Mises's important point. mises.org/library/econom…
Central planning does not (and is unable to) economize with respect to (1) consumers' own valuations that (2) arise at some point in the future (often in response to goods offerings). This problem remains unsolved and is often not even understood by central planning advocates.
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