Hayek’s mentor, the even more far-right economist Ludwig von Mises, undertook to argue that efficient centralized economic planning was an impossibility in an advanced economy. The main reason was that no central planning bureau could conceivably have all the knowledge needed to allocate resources to alternative uses effectively. That knowledge—technological possibilities, local conditions, consumer preferences, likely futures for all these—is necessarily scattered around the economy. A system of (competitive) markets is a uniquely suitable way for this knowledge to be expressed and converted into decentralized decisions about production and consumption. No central organization could conceivably access and analyze this information and calculate the appropriate allocations.First what can we make of this "far-right" comment. I mean von Mises is after all the author of the book "Liberalism: In the Classical Tradition" and a great defender of classical liberalism, so I don't get where the "far-right' bit comes from.
But more importantly Solow's description of Mises's argument on why central planning can not work is, I would argue, at best somewhat inaccurate, if not misleading. I would take Mises's point to be that the rational economic use of resources is only possible if market pricing is applied not only to final goods but also to all intermediate products and factors of production. Without markets, and prices, for the factors of production, rational allocation of said factors is impossible. Markets for the factors of production are, of course, impossible, by definition, under socialism.