Quarterly Journal of Austrian Economics
The Equations of Mathematical Economics and the Problem of Economic Calculation in a Socialist State
Volume 3, No. 1 (Spring 2000)
Our conclusions are thus as follows: In the capitalistic economy it is possible to make calculations on the basis of our present-day knowledge. It may be that mistakes will occasionally be made because unexpected events interfere with our plans and expectations. In the socialist state however it would not even be possible to calculate on the basis of our present knowledge. Those who think that it would be possible to apply the equations of mathematical economics for making the calculations fail to see that included among the items of which these equations are composed are unknown preference scales belonging to a situation which is unreal and can never be realized in practice. The circumstance that they are unknown frustrates all attempts to use the equations for purposes of economic calculation.