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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 projec-
tions 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 con-
sumption. 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 func-
tioning political processes, may compound the consequences of
projection errors. »
I am particularly concerned that Prof. MALINVAUD has inter-
preted 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 go-
vernmental 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 agri-
culture, the market does bring into play forces that correct the
16] Johnson - pag. 50
