July 27, 2009

The Law of Unintended Consequences

Ah, to have the opportunity to blog full time. The opportunity to blog thoughts and ideas might then be able to keep up with the reality of Obama's Presidency. Every action has consequences. This is particularly true in politics and in public policy. And it's especially true of the current regime, because with the headlong charge into so many of these government spending programs, and changes to laws, even unsure of many of the intended consequences since he packages were written by a select few, and read cover to cover by even fewer.

With the blistering pace of the spending that's occurred during the Leeroy Jenkins (WARNING: the link contains obscenities. But it is funny and also instructive.) approach to policy implementation over the last several months, things are bound to go wrong. And that's just from a planned perspective. Unplanned things will happen to a great degree, and based on past examples of unintended consequences, some of the possibilities can be anticipated. Because there are thousands of unread pages of legislation, some cannot be. And that's the real danger.

Everything from Cap & Trade, to the bank bailouts, to GM, to he health care plans all pose real threats, both seen and unsee.

The Library of Economics and Liberty provides the following definition of Unintended Consequences.
The law of unintended consequences, often cited but rarely defined, is that actions of people—and especially of government—always have effects that are unanticipated or unintended. Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it.
The page on the topic goes on to site the Invisible Hand as described by Adam Smith as the most positive example of positive unintended consequences. I'd put it a little differently. The invisible hand is a positive reality that is in larger part responsible for many unintended consequences, both positive and negative.

If it's sometimes responsible for negative consequences, how can it be a positive reality? Because the invisible hand is people looking out for their own interests, and that's always a good thing - the alternative is the nanny state. But the negative consequences that can result from many people reacting the same way to the same new circumstance can be negative for the nation, or state or city.

And that's the point in the phrase above "and especially of government". Governments take actions, people react in order to further or defend their own interests, and the fallout can negatively or unexpectedly affect the government and the citizenry of the nation. And there are many examples that should be examined as instructive in today's governmental environment, already rife with unintended consequences, and poised to have those effects multiplied by reaction to the liberal policies being enacted.

The first and most complete analysis of the concept of unintended consequences was done in 1936 by the American sociologist Robert K. Merton. In an influential article titled “The Unanticipated Consequences of Purposive Social Action,” Merton identified five sources of unanticipated consequences. The first two—and the most pervasive—were “ignorance” and “error.”

Merton labeled the third source the “imperious immediacy of interest.” By that he was referring to instances in which someone wants the intended consequence of an action so much that he purposefully chooses to ignore any unintended effects. (That type of willful ignorance is very different from true ignorance.)

[Emphasis Added]

That phrase sounds quite similar to "the fierce urgency of now". No doubt similarly, the unintended consequences will follow the same way the phrase from 1936 was recirculated in it's more modern form.

In the coming weeks, I will be taking a look at some of these examples in greater detail, and relate the fallout to current events.

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