ABSTRACT
It is now about forty years since Professor Hayek decisively identified the key misconception underlying mainstream welfare economics. This misconception, Hayek argued, was responsible for failure to appreciate the critique of the possibility of rational economic calculation under central planning — a critique stated most forcefully and clearly by Mises, and further developed by Hayek himself. As has been demonstrated by Professor Lavoie (1985a), the true import and significance of the Hayekian lesson was simply not grasped by subsequent welfare economists writing on the socialist calculation debate, even though Hayek's work was widely cited.
