As a long-time financial planner I know how hard it is to do good planning work for individuals and couples. Such planning requires, among other things, meticulous attention to detail, an effective process to elicit the values behind the numbers and a constant review of assumptions and goals over time to make sure the client stays on track with the plan. How much harder must it be for a central planner attempting to plan for millions of individuals in diverse circumstances. What kind of knowledge does the central planner have that would enable him or her to plan for an entire nation? After all, a central planner cannot get inside the head of every individual and analyze all the dispersed bits of incomplete and often contradictory knowledge which separate individuals possess. Is it really so surprising then, that history is replete with the tragic stories of central planning gone disastrously wrong.
These thoughts came to me recently as I finished reading “The Unconquered: In Search of the Amazon’s Last Uncontacted Tribes” by Scott Wallace, a rip-roaring true life adventure story that describes a recent expedition to track one of a number of ‘uncontacted’, ‘wild’ Indian tribes (Indios Bravos) in the deepest recesses of the Amazon rain forest. Until recently the official policy of the Brazilian government had been to try to assimilate these tribes and move them out of the way of the advancing frontier. One small problem with this plan was that the contacted Indians were wiped out by “disease, death and despair” in the wake of the contact. The relevant government agencies had genuinely wanted to help the Indians, but in the end their own germs proved to be far more deadly than the most violent adversary they were intending to protect them from. Even without disease, these agencies came to discover that the Indios Bravos are doomed by cultural contact with the West. Given the choice, they do want to obtain steel blades, metal pots and pans, guns and processed foods. However, once they start using these ‘benefits’ of civilization they begin to grow dependent on them and rapidly lose the ability to meet all their needs from the rainforest. They increasingly come to rely on government handouts and fall into despondency and despair as their customary traditions and way of life lose vitality and meaning. But don’t worry, the Brazilian government now has a radically different plan to help the Indios Bravos. You will have to read the book to find out what it is but, if you really care about the Indians, don’t hold your breath.
History is nothing if not a study of such unintended consequences of human action. For example, in “1491: New Revelations of the Americas Before Columbus” Charles Mann destroys the myth that the pilgrims arrived to a virtually empty America. He claims that there may have been up to 100 million people living in North America before it was decimated by smallpox and other European diseases. In his next book, “1493: Uncovering the New World Columbus Created” Mann documents details of what he calls the Columbian Exchange, the long-reaching unintended ecological, economic and political effects that Columbus’s voyages had on the world at large. We learn, for example, that indentured servants were much more efficient than slaves but it was African slaves that were used in the South because they had immunity to a deadly form of malaria that killed most Europeans. Potatoes were brought to Europe from the Andes and because of their shorter growing season and calorific density, became the stable crop for most of northern Europe, leading to a European population explosion which ‘fueled the rise of the West’ and may, according to Mann, have been as important to the modern era as the invention of the steam engine . The British cornered the market in Peruvian guano (bird droppings) and the use of this fertilizer spurred food production around the world stimulating the shift to mono-culture and making sure that when the Colorado beetle was imported from the Americas (probably on a guano ship) the potato blight that followed would wipe out much of Ireland’s food supply.
Given such examples it is valid to ask whether central planning is even possible, let alone effective? Central planners use statistics in an attempt to aggregate data from large numbers of people but how does one average out the desires of Amazonian loggers, miners and anthropologists against the desire of the Indios Bravos just to be left alone? Is it even possible to rank the attachment to the rain forest of an Indian shaman against the attachment of a western pharmacological researcher searching the rainforest for undiscovered drugs?
“One of the best ways to get yourself a reputation as a dangerous citizen these days is to go about repeating the very phrases which our founding fathers used in the great struggle for independence.” Charles Austin Beard