Monday, May 14, 2007

Why Buying Slaves Might Be A Bad Thing

Glen Whitman has an article at The Library of Economics and Liberty on unintended consequences. One example he offers is people who buy slaves in war torn Africa to "redeem," or free them.

Did these charitable efforts do any good? Certainly, some people are free now who might otherwise of have lived their whole lives in slavery. But there is strong evidence to suggest that slave redemption made the overall situation worse. As journalist Richard Miniter reported in a 1999 article in the Atlantic Monthly, the high prices offered by relatively rich Americans increased the demand for slaves, turned the slave trade into an even more lucrative business, and thereby gave raiders an incentive to conduct even more slave raids. If not for the activities of Western charitable organizations, many of the redeemed slaves might never have been enslaved in the first place!

How did the slave redeemers err? They focused on just one incentive (to release people already in bonds) while ignoring another (to capture more slaves). The sad result was an incentive scheme gone awry.

This is an excellent story to bring up when trying to explain unintended consequences. Just because someone has a good intention does not mean that they will accomplish any good. This is a concept that many people seem unable to grasp. I have lost count of the times I have explained why some government program or another is a waste of money, only to hear the response "But we have to do something." Ignoring the assumption that no matter what the problem "we" have to do something, it in no way means that any well intentioned and poorly thought out plan will in fact help. Minimum wage, universal health care, endangered species laws (which encourage "kill it and cover it"), the war on drugs, all have serious side effects that can easily outweigh the supposed benefits.

The whole thing is a must read, it has some other really great stuff.
HT Cafe Hayek


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