The Socialist Economy Is “Impossible” (“Unmöglich”)—Not Just Inefficient Or Less Innovative Or Conducted without Benefit of Decentralized Knowledge; Socialism Is the Abolition of Rational Economy

In “Economic Calculation in a Socialist Commonwealth,” Ludwig von Mises demonstrates, once and forever, that, under socialist central planning, there are no means of economic calculation and that, therefore, socialist economy itself is “impossible” (“unmöglich”)—not just inefficient or less innovative or conducted without benefit of decentralized knowledge, but really and truly and literally impossible. . . . 

A society without monetary calculation, that is, a socialist society, is therefore quite literally a society without an economy. Thus, contrary to what has become the conventional interpretation by friend and foe alike, Mises was not indulging in rhetorical hyperbole but drily stating a demonstrable conclusion of economic science when he declared in this article:

Without economic calculation there can be no economy. Hence in a socialist state wherein the pursuit of economic calculation is impossible, there can be—in our sense of the term—no economy whatsoever. . . . Socialism is the abolition of rational economy.

--Joseph T. Salerno, postscript to Economic Calculation in the Socialist Commonwealth, by Ludwig von Mises (1990; repr., Auburn, AL: Mises Institute, 2012), 49, 53-54.