Chicken farmers should be allowed to make their own decisions
The current high price of chicken is down to the government. So said Zeeshan Hasan in an article published in this newspaper.
Given that he’s an expert on the subject we would do well to believe him. For rather than this being just the usual and general complaint about politicians being responsible for absolutely anything that’s not going according to our wishes, he gives us the mechanism by which they’ve caused this.
The problem at root is that the Bangladeshi government doesn’t understand what it was that Freidrich Hayek was telling us in his Nobel lecture -- The Pretense of Knowledge. That lack of understanding leads the government to undertake tasks to which they’re not suited -- not competent at.
Hasan tells us that there are two forms of avian bird flu. One that is dangerous to humans, the other is not. The second is still dangerous to chickens, but not to us except in that infections in flocks will increase the price of chicken to us. OK, fair enough.
But this difference has led the government to agree that vaccines against the first type, the dangerous to humans type, can be imported into Bangladesh. But they won’t allow the importation of the second type. Instead, they say, the infections should be controlled by other means. Ones that are, according to Hasan, well suited to industrial scale producers with tens or hundreds of thousands of birds, but deeply unsuited to local conditions where a farmer might have a flock of 1,000 only.
This isn’t the place for us to sort through the merits of the claims either way. We’re interested in a much more basic point -- who is best placed to sort through the merits of those claims? The answer being: Not the government and not the bureaucracy. Which was the very point of what Hayek was telling us.
It is never possible for the central controlling powers to decide upon the details of policy. Not effectively at least. For much too much of the knowledge necessary to make detailed decisions doesn’t reside, or even exist, centrally. It is distributed out there through the society.
As it happens, I’m a global expert in the metal scandium, one of the rare earths. You know all about accounting, or art, or garment design, or what it is that you do for a living. In our field, we know vastly more than any member of the government. In fact, we know, in our field, more than the entire government and bureaucracy put together.
When Hayek’s point is put that way, it is obvious. There’s actually a name for what happens next, Gell-Mann amnesia. We all know that they don’t know in our own area of expertise, because from personal experience, we can see that they don’t. We then assume, wrongly, that they do know in all those other areas that we also don’t know about.
So, we know that the government is only sketchily informed about scandium, accounting, art, the design of garments. But we assume that they do know what they’re talking about with, say, chicken farming.
But the people who know about chicken farming are the chicken farmers. Just like the guy sketching in the RMG factory knows more than any minister or bureaucrat about this season’s cut for a woman’s jacket.
Which is where the system goes wrong. The government has decided upon what they think is the best way to control influenza in chicken flocks. But the people with the knowledge to even begin to be able to decide that are the chicken farmers. At which point our solution is obvious. Sure, with damage to humans we’d like to see those vaccines being used. But when the damage is only to the chickens being raised? Allow the farmers to make their own decisions.
If they think the expensive flock control methods are better, then let them use them. But if they think they’d like to import vaccines, then let them do so. It is, after all, their money they’re spending, and their profit to make or lose upon the outcome of their decision.
That is, they’ve both got the incentive to make the right decision and also the knowledge to be able to do so. Thus, the decision should be at that level, not higher up in government.
It’s entirely possible that some, maybe many, could even be all, of them will make the wrong decision. But that’s a problem that sorts itself out soon enough. It’ll only take one cycle of growing a flock to maturity, or losing it to the wrong decision, for people to adopt the other, more effective and efficient, method.
Whereas, if the wrong decision is made in government, how long will a reversal take? We all being well aware of how quickly bureaucracies are willing to admit to error and change policy, right?
Hayek told us that the centre just cannot have the information to make decisions in detail. Therefore, we should be pushing decisions down to those who have that knowledge. Here, it’s the chicken farmers, to vaccinate or not, their flocks. Recall this as you pay too much for your chicken -- it’s the government getting this wrong which is sucking the cash from your wallet.
Tim Worstall is a Senior Fellow at the Adam Smith Institute in London.