Can a rationally planned economic order outperform the market process as a means of using resources efficiently? This is the central question behind one of the most important debates in the history of economic thought. Its answer has profound implications for the material well-being of societies.
In the end Mises and Hayek were vindicated in no less grand a forum than the world political stage. By the 1980s it was obvious that living standards of citizens in communist countries were far below those of citizens of countries which had retained (more or less) the free-exchange system. The increased internal unrest in the Soviet Union and its suzerainties became increasingly hard to ignore. The collapse and formal dissolution of the Soviet Union in December 1991 demonstrated once and for all the contradictions inherent in nonmarket allocation schemes. Only market-guided resource use—the system of free exchange—could lead to widespread material abundance. Any attempt to suppress this system, however well-intentioned, was doomed to bring about nothing but lower standards of living.
Ultimately the socialist calculation debate demonstrates the incredible importance of ideas in shaping the course of societies. Only if the crucial insights discovered by luminaries such as Mises and Hayek are accepted and put into practice can societies continue to prosper.