This is addressed to my fellow professional economists, but may be of interest to some lay readers as well.
With Socialism once again respectable, Ludwig von Mises’s classic devastating critique reemerges as highly relevant. Rereading Mises’s Human Action version, two interesting points struck me.
As is well known, he isolates the-knowledge problem from the incentive-problem and focuses on the former, the impossibility of acquiring the necessary knowledge for deciding how to allocate resources to produce known ends. Such knowledge can exist only as the result of a market process.
1. The fact that *ends are given and known* is important. Mises explicitly accepts the 'value judgements' of the decison-maker(s), the socialist planning committee for example. His argument is not that they would choose to produce the wrong things, but, rather, that even if we suspend judgment on this, we can show that they would be incapable of effectively producing according to their own values. This makes it a praxeological (logical) rather than a historical (empirical) argument.
2. I did not see Mises explicitly make this argument, but his setup also implies that if we had a completely benevolent dictator, fully and genuinely committed to the 'public good', who also clearly understood the knowledge-problem and the impossibility of capital-accounting under a socialized system, he would attempt to establish a market economy by guaranteeing private property protections and the rule of law. In other words, he would abandon socialism. Benevolence or understanding or both must go if we are to explain the persistence of the socialist dictator or presidential candidate.