Saturday, April 26, 2008

The Law of Unintended Consequences

The Law of Unintended Consequences is best demonstrated when philosophical liberals decide to solve problems through legislation. Liberals like legislation. It lets them control others for causes that the liberals themselves feel good about. Legislative solutions are simple; you need only get a law passed rather than changing public opinion. It produces concrete changes, which the liberals can point to and also feel good about. And it lets liberals have an emotional catharsis of rage towards anyone who opposes their legislative agenda. Unfortunately there are unintended consequences to mucking about with complex systems.

Complex systems are... complex. It is difficult to understand the full range of interactions in complex systems. We are just starting to learn this about nature. Biological systems are complex, and the way they interrelate can cause problems when we interfere. For example, if there is a particularly difficult winter, we might be tempted to feed wild deer. But this has an effect on the number of predators who survive the winter.

Yes, we're starting to understand this about nature. But unfortunately liberals will never understand this about economics. Passing laws to regulate the economy is simple, and appeals to liberals. But the economy is a complex system, and if you muck about with it there are consequences. And it gets even worse when you mix social interactions with the economy.

A case in point is ethanol. Liberals felt it was good for the environment to include ethanol in gasoline. But not content to let people make environmentally responsible decisions for themselves, liberals convinced themselves that the best thing to do was to legislate 10% ethanol in gasoline. Which let the liberal feel good about themselves. And then unintended consequences took over. Today, 30% of North American corn production is going towards producing ethanol. Instead of feeding human beings. Which means the prices go up. And not everyone can afford to pay, which means a lot of people are worried about hunger on a worldwide basis (and yes, there are other crops and other issues which are affecting the prices of those crops).

So what's the answer? Repeal the laws that create the problem? No, that's not the liberal way. The liberal way is to pass more laws, with more government control. Which sounds reasonable and compassionate, until the next time the law of unintended consequences strikes.

5 Comments:

Blogger Sven said...

Somewhat ironically, this post contains a bit of an oversimplification or three...

Much of international trade is denominated in USD (US Dollars). As the Americans have been allowing for a looser money supply to prevent a really nasty recession, the value of the USD has dropped. This means that the price in USD of commodities has to go up to get the equivalent value. If your favourite currency doesn't keep track of the USD exactly (or better), you'll see a price increase.

Add to that hoarding, in an attempt to gouge consumers, and the above effect being added to oil prices, which mean that the transportation cost must also increase, and you have a nasty situation.

For us North Americans, we have the additional issue of not really having any spare refining capability for oil, which adds to the gas scarcity issue.

On top of that, corn based ethanol isn't the best way to make ethanol for fuel - but with the subsidy, it is the best paying...

8:44 PM  
Blogger Shawn Abigail said...

Of course it's a oversimplification. I'm allowed to oversimplify because I'm not trying to solve all the problems in the world through feel-good legislation. 8-)

9:32 PM  
Anonymous Anonymous said...

and the so called conservatives screw the public and steal their hard earned dollars to give them to big biz like ADM , and which also costs the citizens more for corn and food and also damages their cars with useless ethanol additives.

6:33 PM  
Anonymous Anonymous said...

and the so called conservatives screw the public and steal their hard earned dollars to give them to big biz like ADM , and which also costs the citizens more for corn and food and also damages their cars with useless ethanol additives.

6:40 PM  
Blogger Shawn Abigail said...

So if the conservatives are really making ADM rich, why not buy shares in their company?

10:11 PM  

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