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Variations | The rat and the cobra

IN his book “The Art of Thinking Clearly,” Swiss author and businessman Rolf Dobelli mentioned a “common-sense” rat-control law implemented in Vietnam in the 19th century by its French colonial government: residents received cash for every dead rat they presented to the authorities.

What could be “simpler”? Or “more effective”? And what was the result of this clever law? Many dead rats, true, and yet rat-infestation remained a problem. It turned out that some people were breeding rats that they would later kill in exchange for cash.

Economists Antony Davies and James R. Harrigan, in a recent article, noted that a similar policy against cobras was tried in colonial India. The government placed a bounty on the deadly cobras. Not surprisingly, many people took up cobra hunting. But then the authorities realized that although “there were very few cobras evident in the city…they nonetheless were still paying the bounty to the same degree as before.” So the officials “did a reasonable thing: they canceled the bounty. In response, the people raising cobras in their homes also did a reasonable thing: they released all of their now-valueless cobras back into the streets…. In the end, [the city] had a bigger cobra problem after the bounty ended than it had before it began.”

Clearly, Dobelli said, “people respond to the incentives themselves and not the grander intentions behind them.”

In the late 1980s in Mexico City, Davies and Harrigan wrote, the air pollution was a serious public health problem. “The city government responded with ‘Hoy No Circula,’ a law designed to reduce car pollution by removing 20 percent of the cars (determined by the last digits of license plates) from the roads every day during the winter when air pollution was at its worst.”

The result? Removing “those cars from the roads did not improve air quality in Mexico City. In fact, it made it worse.” Why? Because people’s needs do not change as a result of a government decree. “The residents of Mexico City might well have wanted better air for their city, but they also needed to get to work and school. They reacted to the ban in ways the rule-makers neither intended nor foresaw. Some people carpooled or took public transportation, which was the actual intent of the law. Others, however, took taxis, and the average taxi at the time gave off more pollution than the average car. Another group of people ended up undermining the law’s intent more significantly. That group bought second cars, which of course came with different license plate numbers, and drove those cars on the one day a week they were prohibited from driving their regular cars. What kind of cars did they buy? The cheapest running vehicles they could find, vehicles that belched pollution into the city at a rate far higher than the cars they were not permitted to drive.”

These unintended consequences aren’t aberrations, Davies and Harrigan pointed out. They “arise every time an authority imposes its will on people. Seat belt and airbag laws make it less safe to be a pedestrian or cyclist by making it safer for drivers to be less cautious. Payday lending laws, intended to protect low-income borrowers from high lending rates, make it more expensive for low-income borrowers to borrow by forcing them into even more expensive alternatives. Requirements that corporations publicize how much they pay their CEOs in order to encourage stockholders to reduce CEO pay resulted in lesser-paid CEOs demanding more pay. Three-strikes laws, intended to reduce crime, increase police fatalities by giving two-time criminals a greater incentive to evade or even fight the police. The Americans With Disabilities Act gives employers an incentive to discriminate against the disabled by not hiring them in the first place so as to avoid potential ADA claims. Electrician licensing requirements can increase the incidence of injury due to faulty electrical work by reducing the supply of electricians, thereby encouraging homeowners to do their own electrical work.”

And the list goes on. (Welfare laws. Anti-gambling laws. Anti-drug laws…)

“There is that mass of guiding information yielded by the records of legislation in our own country and in other countries, which…demands attention,” Herbert Spencer of Great Britain wrote in 1884. “Here and elsewhere, attempts of multitudinous kinds, made by kings and statesmen, have failed to do the good intended and have worked unexpected evils. Century after century new measures like the old ones, and other measures akin in principle, have again disappointed hopes and again brought disaster. And yet it is thought neither by electors nor by those they elect, that there is any need for systematic study of that law-making which in bygone ages went on working the ill-being of the people when it tried to achieve their well-being. Surely there can be no fitness for legislative functions without wide knowledge of those legislative experiences which the past has bequeathed.”

And yet (the two saddest words in the English language): “Unquestionably among monstrous beliefs one of the most monstrous is that while for a simple handicraft, such as shoemaking, a long apprenticeship is needful, the sole thing which needs no apprenticeship is making a nation’s laws!”

In my book, the only pieces of legislation that lawmakers should consider are spending bills that have actual funding sources, or bills that re-name a road, school or building after a distinguished member of the local community. Lawmakers should also repeal laws that impose undue burdens, such as fees or taxes, or unreasonable restrictions on businesses, consumers and other members of the public. That’s it.

While there is a place for legislation, Davies and Harrigan said, “that place should be one defined by both great caution and tremendous humility.” In other words, we’re doomed.

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