The Discrepancy (Disequilibrium) Between Ex Ante and Ex Post Price Information Motivates Economic Actions

It must be noted that Salerno has made a significant contribution to the development of a modern Austrian theory of the market process, despite my contrasting position with him on the dehomogenization of Mises and Hayek. That contribution is to refocus attention again on the issue of entrepreneurial appraisement and the forward-looking role of monetary calculation. But in Salerno’s presentation, the forward-looking role is, ironically, overemphasized. In Mises’ theory, monetary calculation is an indispensable aid to the human mind precisely because it is essential for both prospective and retrospective calculations. The price system, as an entire system, provides ex ante information which economic actors employ in deciding the future course of action; ex post information which informs economic actors of the appropriateness or inappropriateness of their past course of action; and the very discrepancy (i.e. disequilibrium) between the ex ante and ex post motivate economic actions (e.g. entrepreneurs) to discover better ways to arrange scarce means to satisfy ends. On the threefold advantage of the private property market price system see Mises (1922, p. 99).

—Peter J. Boettke, Calculation and Coordination: Essays on Socialism and Transitional Political Economy, Foundations of the Market Economy (London: Routledge, Taylor and Francis, 2001), 290n6.