An Example of Misaligned Incentives in Centrally Planned Economies
The Soviet Union signed on to the International Convention for the Regulation of Whaling in 1946, yet for the next three decades they hunted hundreds of thousands more whales than they officially claimed.
The farcical aspect of this was that the Soviets had no practical use for the whales. Blubber wasn’t required since the Soviet Union had huge oil reserves, yet they would keep the blubber (30% of the whale) and throw the rest of the creature away.
So why did the Soviets do this?
Because of Stalin’s five year plan.
The 5 year plan for the fisheries stated that tonnage had to increase every year and an effective way of doing this was to hunt the heaviest creatures - whales.
The people in charge of the whale hunt became heroes of the Soviet Union. Medals were awared for their ability to meet the demands of the five year Stalinist plan even though they were unrelated to what the people of the Soviet Union needed or wanted.
A Soviet scientist who was studying whales raised concerns to a Soviet beaurocrat. He said we need to slow down or stop the whale hunt because our descendents won’t be able to see any whales. The beaurocrat replid:
“our descendents are not going to be the ones to fire me from my job”.