Most people say the key feature of capitalism is competition. Hard to argue with that characterization, but I would go one step further and say that it is one of the consequences of competition – “creative destruction” – that best captures why free markets make it possible for entrepreneurs to deliver mass prosperity.
But what’s the key feature of government? Is it waste? Dependency? Corruption?
Those are all good answers, but perhaps “unintended consequences” should be first on the list. Courtesy of Reason, here are three examples.
I’ve previously written about both ethanol subsidies and so-called employment protection legislation, two of the three examples were already familiar to me.
I wasn’t aware, however, that businesses resorted to big concrete edifices to get around Vermont’s billboard ban (though I have read, in a classic case of baptists and bootleggers, that big companies such as hotel chains sometimes try to thwart competition from small businesses by teaming up with environmentalists to ban billboards).
In the world of fiscal policy, there are many example of unintended consequences.
- Image may be NSFW.
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Unemployment benefits producing more unemployment. - Trying to penalize the rich, but hurting lower-income people.
- Raising tax rates but lowering tax revenue collections.
I’ll conclude by asking an open question: Can anyone give an example of a positive unintended consequence of government?
This isn’t a joke query. I assume there are a few examples, even if I can’t think of any of them.
P.S. Here’s a humorous example of an unintended consequence.
