AN OVERVIEW - Part 6

Much of the twentieth century was spent in futile attempts to make central planning substitute for free market prices. Yet country after country, even including countries with socialist and communist governments, were largely abandoning such attempts by the end of that century.

When economic decisions are taken out of the hands of individuals operating in a market and put into the hands of experts on planning commissions and the like, this may be thought of as a transfer of decision-making power from those with less knowledge to those with more knowledge but it is far more likely to be a transfer of decision-making power to experts with less knowledge and more presumptions. The poor track record of central planning, which caused many nations to abandon it by the late twentieth century, is understandable in terms of the inherent difficulty of amassing the kind of knowledge that would have been required to make it work.

Agriculture is especially difficult for a government agency to plan because of the large amount of highly specific knowledge required. The qualities of the soil can vary significantly on a single acre, much less on a whole farm or on all the farms spread out across a nation. Someone sitting on a central planning commission in a distant capital city cannot know where on a given farm it would be better to grow carrots and where wheat would better suit local conditions of weather, soil, and insects. Without having a minutely detailed map of the country — a map which would itself probably cover several square miles — they would have little chance of deciding which farms would have land best suited for which crops. But each individual farmer has that knowledge readily available for that particular farmer's farm, even though it would be a staggering task for central planners to try to assemble that kind of detailed knowledge for the entire country.

Another complicating factor confronting central planners when it comes to agriculture is that the products of agriculture are more perishable than the products of industry. Central planners may be able to look at official documents that tell them how many tons of what kind of steel exist in which warehouses around the country, but strawberries would have spoiled before any such nationwide data could be collected. Specific knowledge is one of the scarcest of all resources, regardless of how many people there may be who can talk in glib generalities. The net result of all this is that even countries which have long been food exporters often begin to have difficulty feeding themselves after the government has taken control of agriculture.

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