Lobster is a tasty treat. How this delicacy arrives on a plate in front of us is nothing short of a market miracle — an intricate process that harnesses the dispersed knowledge of people, places, and circumstances. An article (subscription required) in today’s Wall Street Journal provides a good example of the disruption that can come from supplanting dispersed knowledge:

“…Maine’s lobster population was doing well. Catches were going up, and surveys showed that the stock of young lobsters and egg-producing breeders was on the rise. Yet under the new law, the [federal agency] ran its mathematical models and concluded, in spite of the evidence, that lobstermen needed to ‘rebuild’ egg production.”

A local lobsterman knew the federal regulations “ignored the thousands of egg-producing female lobsters that lobstermen marked as breeders and threw back. Maine lobstermen had long prided themselves on this homegrown conservation practice.”

“…Lobstermen had no way to counter the federal assessment, and were forced into years of frustrating regulatory negotiations. For a time, conservationists at the Monterey Bay Aquarium even followed the feds’ lead and, on their widely disseminated Seafood Watch list, advised consumers to avoid eating lobster altogether.”

Each person in society, in an organization, or in this case a local community, has important knowledge. Market processes harness this knowledge by allowing people to make their own assessments and decisions. Successes are copied, failures are discarded, and we enjoy a tasty dinner. No planner made this possible. Instead it was the unseen coordination of knowledgeable people, who, in this case, overcame obstacles to suppress their knowledge.