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Definition of the law of unintended consequences

Alex Tabarrok posts the best short definition of the law of unintended consequences I’ve seen:

The law of unintended consequences is what happens when a simple system tries to regulate a complex system.

4 Comments

  1. Wow. That’s a fascinating definition. It certainly seems to apply whenever government at any level attempts to mess with the free market. 🙂

  2. The thing is though that it’s not government that wants to mess with the free market, it’s people who want to mess with the free market, and government is one means by which people do so.

    Markets do not necessarily want to be free.

  3. Yes, it’s interesting that most all economics really is ‘theory’. For all his faults, in Greenspan’s book, even he refers to a lawless market not as the ‘free market’, but as a ‘black market’.

    And despite this complexity of the economic of the market, you find people who wish to impose a simple ‘flat’ tax.

  4. Given that most Congressmen possess law degrees, and their large staffs usually consist mainly of lawyers, they seem incapable of designing legislation free of loopholes. It is my belief that unintended consequences are mostly a result of a lack of consideration of loopholes during the formulation of the bills. There seems to be no one asking, “But what if…?”

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