ABSTRACT
There is endless repetition of the claim that Professor Oskar Lange in 1936 refuted the contention advanced in 1921 by Ludwig von Mises that “economic calculation is impossible in a socialist society”. Professor Mises’ contention that a socialist economy cannot solve the problem of rational allocation of its resources is based on a confusion concerning the nature of prices. The economic problem is a problem of choice between alternatives. The individual entrepreneur will not possess or require knowledge of general production functions, but he will currently learn from experience how at any given time variations in the qualities or the relative quantities of the different factors of production he uses will affect his output.
