One spectacular case illustrating both the complexities and the cost of economic planning is the German Pig Slaughter of 1915. Beginning in November 1914, the government had put in place price ceilings on potatoes, which made it more profitable for farmers to feed their potatoes to their hogs than to sell them, though the government also rapidly outlawed the foddering of potatoes.
The inevitable potato shortages were immediate and severe. In the cities, outcries were raised, but against the farmers rather than the government. Soon, journalists and politicians were claiming that people and pigs were in a competition for the potatoes, and that some portion of Germany’s 27 million pigs must go. Beginning in March, the government therefore signed the death warrant for nine million pigs.
The decline in pork had many unanticipated and lasting consequences even after the program was killed in May when the death count had grown to five million dead hogs. It is hardly surprising that in this welter of planning and intervention neither potatoes nor pork became more plentiful. The demand for meat shifted to beef–whose prices was as yet uncontrolled—so beef prices spiraled upward. Also, officials did not take into account the use of pig manure as fertilizer on small farms. Because of this, killing the pigs actually decreased crop yields.
Sources: "The Hindenburg Program of 1916" by T. Hunt Tooley and Wikipedia.
Looks like the 1915 German government and present American government have common traits.
ReplyDeletecheap shot
DeleteGovernment economic planning doesn't work. I had to deal with it in India back in the Nehru-Gandhi era. I concluded that the smartest people in India were working on ways to circumvent their government's policy
ReplyDeleteEconomies are like ecosystems: one poke and all sorts of unexpected things happen - usually for the worse, overall.
ReplyDeleteThat awful silence, the silence of the hams.
ReplyDeleteBravo, David
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