Saturday, September 26, 2009

A False Equation: Results do not equal Intentions

It amazes me how regularly I come across phrases like "We have to try something!" or "We will create a law making it so." I believe these ideas are rooted in the misconception that action based on intention will yield desired result. An important rule of thumb to keep in mind when dealing with humans is that results do not in fact equal intentions. Many times actions even have the exact opposite outcome than what was hoped for.

One classic example of this is the Law of Unintended Consequences. This is basically the observation that reality is complex and that often action on one variable effects another variable in an unexpected way. In other words, each action has multiple effects. Common examples of this are the Treaty of Versailles in dealing with Germany after world war I, funding of the Afghan Mujahideen which led to the rise of Al-Qaeda, and price controls resulting in the scarcity of goods (check into rent control or Nixon's gasoline price controls in the 1970s).

Groups can be especially prone to this fallacy as they often elect committees or recruit "experts" which are tasked to carry out their intentions. This predictably results in simplistic top down thinking being applied to complex areas leading to failure to achieve the desired results. Working in the software industry I have observed many a multi-million dollar project left with only disappointed customers and wasted resources to show for the intentions.

One group in particular falls victim to this fallacy with egregious results: the state. When people decide that they want people to act in certain ways, they assume they can create state institutions to be the one size fits all solution to the problem. They believe politician's promises who are only chosen based on their intentions and seldom held accountable for their results (due to time lag and other well documented factors: see Sowell, Mises, or Rothbard for exhaustive analysis). This can be very damaging to society as the state is such a strong hammer and once selected it does not permit competition. This is because state solutions appropriate large amounts of resources and are not subject to the feedback of pricing and profit, erect barriers to entry in the forms of licensing and regulation (FDA), and sometimes resort to straight out monopoly (post office).

When seeking solutions to problems, keep in mind that merely wishing something to be does not make it so, nor does spending massive resources and making large sweeping actions necessarily achieve the desired end while often creating huge side effects that can be worse than the original problem. With these things in mind, be aware that using the state as default argument for how things should be accomplished is not a reasonable position; the burden of proof is high.