Salient to Investors:

Stephen L. Carter at Yale writes:

  • The law of unintended consequences rests on a deceptively simple insight: We cannot predict the future. There are always externalities, and it’s impossible to identify all of them in advance.
  • Eli Whitney patented the cotton gin in 1794 which led to a sharp increase in the number of slaves, that historians would cite his invention as one of the precipitating causes of the Civil War.
  • Many supporters of the Affordable Care Act insist it is not having a depressing effect on hiring, and many supporters of our drone-attack strategy against terror leaders reject the accusation that we might be creating more terrorists.
  • Whatever policy we support will have bad effects as well as good, and that we take the positions that we do because we believe that the good effects greatly outweigh the bad.
  • Adam Smith’s “invisible hand” is the unintended consequence of countless small decisions by people seeking to maximize their individual welfare.
  • Albert O. Hirschman warned of the pernicious consequences that arise when governments are certain that they are right, and social scientists have an obligation to consider the likely real-world effects of their ideas.
  • Policy makers and pundits should stop pretending that any idea, no matter how well-intentioned, will have only beneficial effects. The more complex the policy in question, the more likely are unintended consequences.

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