Central Planning has Failed. Long Live Central Planning
As seen during 17-hour drives to and from the tsunami-hit north-east of Japan this week, the country appears to have ground to a halt, hit by a mystifying shortage of fuel. Added to rolling power cuts, I predict the consequences for this quarter's growth will be severe. From Tokyo northwards, drivers turn off their engines and park in single file for hours, waiting for their 20-litre rations.
Ooh! Ooh! I know the answer to this one!
As supply stocks fall, pump prices rise as a flashing neon signal to producers to load up tankers and steam full speed to the northern prefectures, right?
It was only on March 21st that the first seaborne petrol-tanker since the tsunami reached the area. What’s more, only this week have the railways been able to ship fuel up north.
Yet the Ministry of Economy, Trade and Industry (METI), which handles fuel distribution from its darkened offices in Tokyo (the lights are switched off to save energy), acknowledges there has never been a supply shortage in Japan as a whole. Refineries in western Japan have increased output to make up for the shortfall further north.
About a week ago, officials dispatched 200 lorries with fuel to the stricken areas, but another 100 appear to be waiting in reserve.
Hunh. Well, if I knew a bunch of local producers actually have the supply, they are just being prevented by unpredictable bureaucracies from distributing it, I wouldn't be in a hurry to send tankers, either.
I suppose it makes sense. If producers were able to respond in a rational fashion to price signals, what would be the point of a Ministry of Economy, Trade, and Industry? I'm sure the people waiting in gas lines, instead of working to get their lives and livelihoods back on track appreciate the need for central planning and the inevitable results it brings.
Of course I'm being sarcastic. Once again, the settled science of how central planning must fail is illustrated. How many human tragedies must be suffered before The Economist shrugs its central planning fetishism?
If Japan’s establishment were not so bunker-headed and convinced that it knows all the answers, it would have created a war room, brought in experts from the real world, and declared a state of emergency to get the fuel up north.
I guess at least one more.