Core Truth Three: Unintended Consequences

Intentions are not results.

Good intentions do not matter.  

What matters are all of the consequences.

When you combine the truth that Incentives Matter with individuals pursuing their own subjective perceived interest you get our third Core Truth: Unintended Consequences.  Unintended consequences mean that individuals react to laws (or other changes) in ways that were not anticipated by the those imposing the change.  Sometimes the reactions are good, and sometimes the reactions are bad.

Unintended consequences arise from several factors in our complex world:

• Each individual chooses his or her actions based upon subjective self-interest in the world as he or she perceives it.
• People very in their interests, abilities, perceptions, and goals.
• The greater number of individuals affected by the law - you increase the complexity of the variables.
• Not only will individuals changes their actions in response to the imposed change, but other individuals will also change their actions based upon the reactions of other individuals.
• It is impossible for policy makers to have full understanding and knowledge of the perceptions and subjective interests of millions of individuals.  

It is very difficult - if not impossible - to fully trace out all of the consequences of a proposed public policy so public policy should be created cautiously, humbly, and with a recognition that implementing the policy will create negative unanticipated results.  Whether those inevitable trade-offs are worth the benefits is a worthy debate, but it is folly to imagine those trade-offs do not exist.