This method of calculation was advocated by the economists Otto Bauer, Helene Bauer and Otto Leichter [de] as an alternative to calculation in kind for a socialist economy.
[1] Otto Leichter criticized in-kind calculation on the basis that rational accounting required a general unit for comparing costs of heterogeneous goods.
The basis for labor-time calculation is found in Karl Marx's analysis of value in capitalism.
However, Marx was vehemently opposed to any proposal for using labor-time as the basis for socialist calculation because his concept of socially necessary labor time was a conceptual framework for understanding and analyzing value in capitalism.
In Marx's view socialism would operate according to its own economic "laws of motion" distinct from those of capitalism.