The economic calculation problem can be summed up like this: In a society with no money where goods are "pooled" and then used by members, there would be constant shortages since the absence of prices would create a very high demand. Its answer has profound implications for the material well-being of societies. There’s a few different directions that you can go here. The economic calculation argument (ECA) has to do with the claim that, in the absence of market prices, a socialist economy would be unable to make rational choices concerning the allocation of resources and that this would make socialism an impracticable proposition. Economic Value Added (EVA) for the year 2016 = Net Operating Profit After Tax – (Capital Invested * WACC) = $ 70,000 – ($ 30,000 * 8.53%) = $ 70,000 – $ 2,559 = = $ 67,441 The so-called Austrian school of economics makes much of what they call the socialist calculation problem. All societies face the economic problem, which is the problem of how to make the best use of limited, or scarce, resources.The economic problem exists because, although the needs and wants of people are endless, the resources available to satisfy needs and wants are limited. This is the central question behind one of the most important debates in the history of economic thought. The economic calculation problem is a criticism of using central economic planning as a substitute for market-based allocation of the factors of production.It was first proposed by Ludwig von Mises in his 1920 article "Economic Calculation in the Socialist Commonwealth" and later expanded upon by Friedrich Hayek.F. Ludwig von Mises believed that private ownership of the means of production was essential for a functional economy, arguing: Every step that takes us away from private ownership of the means of production and from the use of money also takes us away from rational economics. For any further reading the “Economic Calculation Problem”, Mises gives his argument in a clear and fairly concise manner in his essay titled, “Economic Calculation in the Socialist Commonwealth.” Murray Rothbard has written an paper titled, “The End of Socialism and the Calculation Debate Revisited”. He did know about the limits of human systems—even those with some data processing technology. Gross Domestic Product is the most commonly used indicator of a country's economic growth, but there are a number of problems involved with the way GDP is calculated that must be kept in mind.One of the primary problems with GDP is that it measures goods and services sold through markets but does not take into … #4 – Economic Value Added EVA Calculation. The economic problem. In his first article, Mises described the nature of the price system under … In a 1920 article, Economic Calculation in the Socialist Commonwealth, Mises explained the so-called economic calculation problem, one of the greatest intellectual achievements of the twentieth century. Rather, the central problem is this: assessing economic value through prices. The assumption that “economic rationality” can be arrived at on the basis of profit and loss signals is explicit in the work of those who propound the economic calculation problem as fatal to socialism. The problem of economic calculation which faces them is examined in more detail in some of the following essays, but the general idea can be explained very briefly and simply. Briefly, its thesis is that the calculation of rational price is endemically … Economic calculation is not about the price-determining mechanism itself. However, the fact that the economic problem of an advanced economy cannot be solved without the market process need not entail that that problem is not even defined independently of the form of economic organisation. The problem is that leftists generally handwave this as "It will be solved somehow under full communism" without any discussion at all of what algorithms will be used and why we should believe they will work. During the Socialist Calculation debate in the early parts of the 20th century, with the main crux of Socialism being reduced to rubble, adamant Socialists of the modern age contend that an increase in technology will overcome the problem with economic calculation … How do you respond to what critics refer to as, “the economic calculation problem”? It is also not that planners lack sufficient technical data. Having mathematical knowledge, I feel like the fundamental mystification involved the phrase "economic calculation problem" is the belief that the problem is "unsolved" in the way that the Unified Field Theory or the Rieman Hypothesis is unsolved.