As the country moves towards post-disaster reconstruction, the government has taken it upon itself to lead the process. An Extra Ordinary Mechanism (EOM) is also being created to coordinate the series of events that will follow. The plan is, this EOM will be a body comprising of experts that will know best, how and where to channel the resources so as to guarantee the optimum utilisation and maximum benefit.
Under the given circumstances, the 29th edition of Liberty Discussion Session, held on June 26, 2015, discussed FA Hayek’s ‘The Use of Knowledge in Society.’ The participants in the discussion used the article to dissect the state-led reconstruction process and point out the possible problem areas, based on lessons from the reader: the knowledge problem that experts will face when devising economic policies based on the limited information available at their disposal.
Some of the major discussion points were:
– Can mathematics, mostly statistics, and the graphs and figures that follow, represent the decisions that people make at different circumstances? The participants shared a common notion that human beings can make very differing king of decisions at similar-looking circumstances.
– Is there a way to achieve a “planning” that involves both the centre and the private individuals, and is implementable, rather than having to rely on the unimplementable centre-led planning? Most participants held the belief that involving the local communities and community-based organisations (CBOs), and coordinating efforts of the local wings of the state and these CBOs can be the right way to go about it.
– The participants also talked about the society’s perception of the profits that an arbitrageur churns out of his knowledge of differing circumstances in two or more places. Transportation entrepreneurs’ practice of charging high fares to transport relief materials to disaster-stricken districts were discussed. Participants were seen siding at two different ends on this issue. While some suggested that this was a wrong practice on “moral” grounds, others argued that that is how prices function – communicating the message of availability of demand and supply of resources.