Against Expert Advice

Heartwarming story from Malawi. No doubt that left wing will look at this as evidence that free markets do not work in many situations. But my opinion is that this actually is a case of markets actually working, as long as you consider the government as part of the market. Academics usually tend to consider government as an entity that operates outside the market, but the reality is that the goverment IS an inherent stakeholder in the market. In this case the government considered an investment case where if they invested in the fertilizer, the returns to the whole economy increased. So like any rational actor in the market, they invested. The simpleton in this story is the western advisor who looked up his textbook - saw the maxim that government subsidies are bad - and repeated it without looking at the overall return to the economy. Dont attribute to market failure what you can attribute to stupidity. All governments (free market or otherwise) undertake projects that generate returns for the economy as a whole. The problem with planned economies is that they frequently tend to invest in projects that have poor returns to the economy. And the problem with naive academics is that they tend to put theory over pragmatism.