On Wednesday, Elon Musk showed his support for the years-old Austrian school of economics, associated with Ludwig von Mises, saying that prices are an important factor for an economy to function properly.
In a post on X, Musk wrote, “Prices are critical information without an economy cannot function.”
Debate Over Socialist Planning Resurfaces
The remark came after Rothmus, an X account that supports ‘rugged individualism’ and ‘Propertarianism,’ posted on social media about von Mises’ 1920 paper “Economic Calculation in the Socialist Commonwealth,” which Hayek read. In the post, Rothmus said, “Mises showed that socialist central planning isn’t merely inefficient, it’s impossible.”
Without private property and genuine market prices, planners have no reliable way to decide on how to allocate limited resources or measure real costs and needs.
Oskar Lange, a leading socialist in the debate, promoted “market socialism” with trial-and-error pricing by a central board. In the real world, socialist planners in Eastern Europe depended on global capitalist market prices as a guide.
“Without external free-market price signals, pure socialism would be economically blind and coordination would collapse,” Rothmus wrote.
Mises’ Warning On Government Intervention
In the paper, Mises further argued that “interventionism, the “middle way” of government meddling, is inherently unstable.” This is because each intervention creates new problems, which lead to additional interventions and thus result in full socialization.
“Price controls cause shortages, subsidies distort production, and the cycle continues until the economy is fully planned,” she explained.
And the lesson is clear: a healthy economy depends on real market prices stemming from voluntary trade and private property. Partial government control does not stabilize the economy; instead, it pushes it into central planning.
Rothmus closed by anchoring the claim to history, writing that “the collapse of the Soviet bloc proved it in practice.”
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Photo Courtesy: Frederic Legrand – COMEO On Shutterstock.com
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