"He was wise to steer clear of economics. For his quibble with Keynes was
not the only humiliation he had suffered in rarified theoretical
discourse. The famous Socialist Calculation Controversy was prompted by
the Austrian critique of central planning. From the 1920s until the '40s,
Hayek and his countryman Ludwig von Mises argued that socialism was bound
to fail as an economic system because only free markets—powered by
individuals wheeling and dealing in their own interest—could generate the
information necessary to intelligently coordinate social behavior. In
other words, freedom is a necessary input into a prosperous economy. But
even as Hayek's elegant essay extolling market prices as the signals of a
rational economy was hailed as a seminal contribution upon its
publication in the American Economic Review in 1945, shrewd socialist
theorists proved to the satisfaction of their peers that central planning
could be streamlined so as to solve, with really big computers, the very
information problem that F. A. Hagek had so courteously exposed."