How should we think about the problem of unanticipated consequences? And what are the implications for the possibility of unintended consequences regarding top-down, technocratic policy initiatives that aim to mitigate targeted social problems?
For example, I’ve occasionally heard it argued that we shouldn’t be too worried about unanticipated consequences of interventions, because unanticipated consequences don’t have to be bad. They might be good!
Albert Hirschman made this claim in his book The Rhetoric of Reaction, where he advanced two claims – the idea that “purposive social action” leads to adverse unintended consequences only “occasionally,” and that “it is obvious that there are many unintended consequences or side effects of human actions that are welcome rather than the opposite.”
In his book Power Without Knowledge, Jeffrey Friedman argued that Hirschman’s case falls flat on both points. To start, “Hirschman’s first claim is a generalization of naïve technocratic realism. It tacitly appeals to the reader’s agreement that if we tally up our first-order assessments of technocratic wins and losses, technocracy comes out ahead, begging the epistemological question by assuming the reliability of these tallies.” Given that the ability to accurately tally such things is the very point under dispute, trying to resolve the dispute by appealing to those tallies would indeed be a textbook case of question-begging.
The second claim Hirschman makes might provide a basis for defending technocracy, but Hirschman fails to adequately defend it, Friedman argues:
That is, Friedman argues that if one wants to salvage the argument in favor of technocracy in situations where technocrats lack what Friedman called “type 4 knowledge” – knowledge that the costs of a technocratic policy (consisting of both the costs of implementing the solution as well as any unanticipated and unintended costs) will not be higher than the costs of the initial problem – merely pointing out that unanticipated outcomes could in principle be beneficial is simply inadequate. One would need to provide some positive grounds for believing that unintended consequences will have an overall tendency to be beneficial.
In his book, Friedman simply adopts the fairly modest premise that “while the tendency of unintended consequences might be either more harmful than beneficial or more beneficial than harmful, we do not know which is the case…The question, then, is whether our ignorance of the valance is more damaging to epistemological criticisms of technocracy or to defenses of it.” He argues that the simple fact of uncertainty is fatal to the argument for technocracy, and to say otherwise “would fly in the rationalist face of technocracy, for it would license the adoption of policies that – like policies pulled from a hat – are justified not by knowledge, but by hope.” Appealing to the mere possibility that unintended consequences might be beneficial as a defense of technocracy actually rebuts the argument in favor of technocracy.
Friedman left the question of how to judge the valence of unanticipated consequences unexamined – his case didn’t depend on making a positive case that the valence will be neutral or even negative. But I want to look a step further than Friedman did – do we have reason to think that valence of unintended consequences will tend to be positive, neutral, or negative? And on what basis would we examine such a claim?
Friedman argues (correctly, I believe) that we need to make a second-order argument on this issue. A second-order argument is one that focuses on systemic reasoning about the workings of a system, rather than first-order arguments where one attempts to tally up points on a case by case basis. For example, one might argue that government operates inefficiently compared to market activity by first-order means, perhaps pointing out that building a public restroom consisting of a “tiny building with four toilets and four sinks” cost the taxpayers of New York City over two million dollars, while by contrast “privately managed Bryant Park, in the middle of Manhattan, gets much more use and its recent bathroom renovation cost just $271,000.”
But the same article also makes a second-order argument about the systematic differences under which state and private enterprises operate, arguing that since “government spends other people’s money, it doesn’t need to worry about cost or speed. Every decision is bogged down by time-wasting ‘public engagement,’ inflated union wages, and productivity-killing work rules.” So we can distinguish between the first order argument (examining specific cases) and the second order argument (comparative institutional analysis). Thus, the article uses a first-order case as an example of government being wildly wasteful and inefficient in what it does, and also offers a second-order argument for why this sort of disparity is systemic rather than random.
In my next post, I will be considering a second-order argument about the valence of unintended consequences, and whether we should expect them to have a tendency to be positive, neutral, or negative.
READER COMMENTS
steve
Aug 8 2024 at 10:58pm
I would say that if you have run an organization of any decent size you know that there are unintended consequences for everything you do. However, you still have to decide stuff and you cant let unintended consequences freeze into permanent status quo. You should also realize that when the consequences occur you can adjust to them and occasionally you need to reverse a prior decision. There are both positive and negative unintended consequences but my experience is that when there are positive ones people generally try to take credit for them as part of the plan, even if not truly intended.
Steve
JdL
Aug 9 2024 at 6:00am
The argument arises only if one takes for granted that governments have the right to run people’s lives, or at least MIGHT have the right in certain instances. Once one understands that nobody, and certainly not governments, has the right to run other people’s lives, the entire issue disappears.
Thomas L Hutcheson
Aug 10 2024 at 9:01am
While caution in the face of unintended consequences is warranted, most problems arise from perfectly foreseeable consequences that the “intender” ignores or the erroneous weights placed on the consequeses by intender and critic.
Few proponents of minimum wages, or example, do not know that additional unemployment will result, although that is not their intent. They just believe that the benefits to the worker who remain employed outweigh the losses of the unemployed workers, the lower profits of affected firms and the higher prices passed on to the customers of those firms.
Richard W Fulmer
Aug 10 2024 at 4:59pm
There are more “wrong” ways to accomplish a task than there are right ways. In the game of chess, for example, there are over 318 billion ways of playing the first four moves on each side. It has been estimated that in a 40-move game there are more possible moves than there are atoms in the universe. The reason that humans were able to beat computers far longer than anyone predicted was that computer programs randomly evaluated one possible move after another until they reached their allotted time limit. At that point, they picked the best move from among those evaluated.
Yet, compared with the game of life, chess is childishly simple. Consider that there are only 32 “individuals” on a chessboard, and that none of them has free will. Their movements are severely constrained: only one piece may move at a time, each side moving a single piece in alternating turns; each piece’s position is restricted to no more than 64 squares arranged in two dimensions; and each piece has a set way in which it can be moved.
But suppose the game is a bit more like real life. Let each piece have free will and the ability to move itself. Now the pieces may all choose to move at once or to never move at all. A pawn could decide to act like a Queen or a Knight. A Rook might turn traitor and attack pieces of its own color, or the Kings could negotiate a peace settlement and leave the board entirely. The number of possible board positions after only the first move is now infinite. And the real world with its billions of players is more complex still.
The chances that bureaucrats with limited knowledge and (possibly) perverse incentives could accidently improve a real-life situation are incredibly small, and certainly smaller than would be the chances of millions of people working to improve things through trial and error.
Thomas L Hutcheson
Aug 10 2024 at 11:32pm
But it has been tried, gazillions of times per day, and, the odds notwithstanding, some pretty clearly work. I’ll even bet you can think of some.
Richard W Fulmer
Aug 11 2024 at 7:57pm
I agree that government can provide Adam Smith’s framework for prosperity of “peace, easy taxes, and a tolerable administration of justice.” But if it tries to do much more than that, does it do better than the free market would if property rights were properly assigned and enforced? That’s a tough question to answer, of course, because a country isn’t a laboratory. We don’t have control and test countries with which to experiment.
The poverty rate has dropped since the Great Society programs were enacted. Success, right? But poverty rates were dropping before the programs were put in place. Would poverty be lower today if there had been no Great Society? Consider that something like $25 trillion has been spent on welfare programs over the last 60 years. Would Americans be wealthier if that money hadn’t been taxed out of the economy? Before the Great Society, about two-thirds of the people in the lower quintile were employed. Today only one-third are. Jobs are among the best anti-poverty programs known. In addition, how much additional wealth would have been created if the employment rate had stayed the same?
The number of on-the-job deaths and injuries has fallen after OSHA was enacted in 1970. But they were falling before OSHA, and OSHA doesn’t seem to have increased the rate of decline.
What about regulation in general? The first steam engines were dangerous because they were the first. We hadn’t yet learned all the ways in which they could fail or how to prevent those failures. The same is true about the first factories, cars, airplanes, and so on. They became safer through innovation as we learned. Did regulations – taken as a whole – speed or slow innovation? If the latter, then they may well have cost more lives than they saved.
During America’s industrial revolution, pollution was worse than it needed to have been because the courts refused to enforce property rights. When people sued factories for polluting their air and water, for example, judges decided in favor of the factories on the utilitarian basis of “the greatest good for the greatest number.” Judges reasoned that more people – employees and customers – benefitted from the factories’ activities than were harmed by their pollution.
Had property rights been enforced, factory owners would have been required to pay restitution for the harm they were doing, giving them an incentive to find ways to reduce that harm. Settling ponds, for example, could have been used to eliminate the heavy solids released into streams and rivers. Perhaps, the companies could have even found uses for those waste solids.
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