The Mises criterion is a principle in economics that helps determine whether a planned economy can effectively allocate resources. It was developed by economist Ludwig von Mises, who argued that without market prices, it is impossible for central planners to know the true value of goods and services. This lack of price signals leads to inefficiencies and misallocation of resources. According to the Mises criterion, only a market economy, where prices are determined by supply and demand, can provide the necessary information for efficient resource allocation. In contrast, centrally planned economies often struggle to meet the needs and preferences of consumers, resulting in shortages and surpluses.