Think Freely Media presents Common Sense with Paul Jacob

Some “unintended consequences” aren’t.

The order of the market is an unintended consequence of market participation. By buying and selling, we’re just trying to get what we want. But we also send signals that help other folks accommodate our values and plans, which then allows markets to form some semblance of orderliness.

In government, on the other hand, laws get advanced to help this person or that, or whole groups of people. But economists often note that the actual consequences of many policies are at great variance with their advertised benefits. These often negative outcomes we term (following F.A. Hayek) the “unintended consequences.”

It’s worth noting that sometimes politicians do intend those hidden, bad consequences.

Economist David Henderson brings up an instance of this:

One insurance agent I spoke to speculated that politicians and other government officials who support these regulations not only understand these effects, but also like them. Why? Because they cause more people to go without insurance and thus create a demand for government-provided insurance.

Henderson then cites a provision of Obamacare, now kicking in: Regulations mandating medical insurance companies to spend a prescribed percentage of premiums “on actual medical care.” The result will be, almost certainly, the demise of whole hunks of the health insurance industry.

Thereby increasing political demands for government-provided insurance.

Some of the folks who concocted this regulation, and some who voted for it, certainly knew the likely result. And welcomed it.

Politicians are not equally clueless.

This is Common Sense. I’m Paul Jacob.

By: Redactor

5 Comments

  1. Dagney says:

    Interesting how I had to go half-way down the page, and into the comments on the Forbes article before I saw anyone mention the Constitution. We are doomed because so many people REFUSE to understand its meaning and the urgency of ensuring laws comply with it.

  2. Drik says:

    They are not only not clueless, they are also not representing us, despite taking on that as a title.

  3. Tj says:

    There are plenty of other countries that have national health care. There are some good examples to look at on how to do it successfully. That said, anyone paying for insurance the way we are doing now is not one of them. Insurance companies are part of the problem, not the solution.

  4. RWMaule says:

    Mr. Jacob could use some common sense himself. He should do some research. Most countries of Europe, as well as Canada, have some form of universal health care. All or nearly all of those countries have better health care results that we do in terms of life expectancy, infant mortality and maternal health. It is as simple s that.

  5. Drik says:

    For standardized life expectancies which are adjusted for the effects of premature death resulting from non-health-related fatal injuries, the U.S. ranks #1.

    Without those adjustments, we are 14th, but it’s not because of physical health.

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