Joseph and the Egyptian Road to Serfdom

There is a very interesting article by Dan Kaganovich and Jeremy England ¬†on Joseph’s centrally managed emergency response to the Years of Famine, and how he led Egypt down the road to serfdom.

A response here makes the additional point that Joseph had inside information about the upcoming famine which no one else knew about. I don’t think this is true, or relevant. Initially Joseph was the only one who knew, but his massive new emergency tax and new storehouses would have given away the secret. Even if it is true that Joseph was the only one with any interest in preparing for the famine, he still could have organized local storage committees, which would have decentralized the program.

I am not sure about the assertion of Kaganovich and England that the famine was a manufactured crises. The free market is quite resilient, and it is always a better solution than central planning, but a seven-year drought will destroy any agricultural economy. On the other hand, the Egyptians were selling themselves by the end of year two, and it is likely that a free market, even without any advance warning, would have had enough reserves to hold out longer than that.

Another factor which we do not have much information about is the existing Egyptian culture. If there was no free market before Joseph came along, then a decentralized solution would not have been an option. Now was not the time to begin inculcating a libertarian attitude in the Egyptian culture. Being a primitive, agricultural society, I would expect that they did have an independent attitude, but they were probably very weak on the long-term planning, and they probably did not have much experience with sophisticated independent organizations. It is very possible that central planning under Joseph’s oversight was the best option to ensure that a sufficient amount of grain would be saved.

While I think central planning is always a bad idea, central organization is often effective, and is a better bet when something must get done. Joseph did not plan the economy. He had one temporary program with a specific goal which was centrally managed, and which was ultimately quite effective in reaching its stated goals. It is a mistake to confuse central organization with central planning, and here Joseph’s approach, even if it can be criticized, was fit for achieving the main goal. This is especially true here that there was a specific and temporary need. There was no reason that the private economy could be expected to build all the necessary organization for a short-term risk-management project.

Joseph could have decentralized his program without leaving it all to the free market. He could have allowed each province to take care of its own grain stores, and allowed private storehouses. This would have increased efficiency without jeopardizing the main concerns, and without concentrating all the power at the top.

It also does not look like Joseph was trying to make all of Egypt his serfs. After they gave him their land and themselves as slaves, he returns the land to them (with a permanent tax) and leaves them free men. It is possible he was trying to consolidate Pharaoh’s rule, though it is not clear to me how much he would have gained. The extra taxes were also nice for Pharaoh, but nothing in the story suggests that Joseph had any motivation to spend so much effort just to increase the tax rate.

I would suggest that possibly Joseph was trying to demonstrate to the Egyptians the threat of central government, by letting them see how the path to serfdom developed. He wanted them to be aware of what his centrally organized plan was doing to them, and when they failed to protest, he let it go to its natural conclusion. He confiscated large amounts of grain for long-term storage, challenging the Egyptians to demand some commitment to return it to them in the future. They failed to complain, and Joseph continued collecting. He built large storehouses in the cities. He did not try to keep his stores out of sight. He placed it deliberately in front of them, and had the local people guarding it. He was almost challenging them to demand control of their local storage and distribution, but they did not. When the famine came he sold it back, and there is no record they protested. Joseph allowed them to follow the path to serfdom, without any coercion.

Joseph demonstrated to the Egyptians how easy it was for them to let themselves be enslaved. He made sure they would be able to look back at the end and see the road to serfdom they had voluntarily followed. After buying them all as slaves he transferred them to other cities, and then freed them and returned the land to them, leaving a significant task. They would not easily forget their experience, with their new locations and taxes to remind them of their mistakes. Joseph’s central planning seems to have been meant as a lesson through experience rather than a trap.

There is no indication that the lesson was learned.