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PRY
to education, research, land reform, building roads. These are
actions that supplant the market; when a government builds a road,
this supplants the private market for the road.
With respect to Prof. MALINVAUD’s other points, their basis may
oe in the brevity of my presentation but I am not sure. On page 37
[ state specifically, « I do not want my remarks to be interpreted
as implying that all efforts at projections are futile nor that projections
even though subject to substantial error are without value ».
This is rather different than what it has been implied that I said.
[n the paragraph from which the above sentence was taken, I noted
that if projections indicated that food output was likely to grow
less rapidly than population, governments should clearly act in
response to such a projection if it is believed to have a sound basis.
In the United States, all projections indicate that if present policies
are continued, output is going to grow more rapidly than consumption.
Such a forecast has significant policy implications.
I did not say that « individual errors are offsetting ». What I
did say (on page 22) was the following: « For one thing, errors
made by private individuals may be offsetting. For another thing,
errors made by private individuals may bring into play forces to
correct the error, such as a decline or increase in market price,
while a government price policy, subject to rather more slowly functioning
political processes, may compound the consequences of
projection errors. »
I am particularly concerned that Prof. MALINVAUD has interpreted
me as saying that simply because private forecast errors may
be offsetting, the resulting resource allocation is an efficient one.
[ did not say this; in fact, I once wrote a book (Forward Prices for
Agriculture) about the problem and concluded that a type of governmental
price forecasting for a production period could lead to an
improvement in resource efficiency.
But the point I have tried to make was that where errors are
made by private individuals, and this is particularly true in agriculture,
the market does bring into play forces that correct the
16] Johnson - pag. 50
