Tag Archives: good intentions

Intentions Are Not Results

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The Wisdom of George Stigler

George Stigler won a Nobel Prize for his work on the economics of regulation. He wrote extensively about regulatory capture, and in fact coined the term. He was one of only a few sane souls who stubbornly insisted that regulations be judged by their actual results, not their intended results. Good intentions, however noble, are not enough. Here’s an example of Stigler at his finest:

Regulation and competition are rhetorical friends and deadly enemies: over the doorway of every regulatory agency save two should be carved: “Competition Not Admitted.” The Federal Trade Commission’s doorway should announce , “Competition Admitted in Rear,” and that of the Antitrust Division, “Monopoly Only by Appointment.”

-George Stigler, “Can Regulatory Agencies Protect the Consumer?”, from The Citizen and the State: Essays on Regulation (1975), p. 183.

Minimum Wage, Maximum Unemployment

Teenage unemployment is 25.5% — an all-time high, and nearly triple the general unemployment rate.

Maybe the fact that the minimum wage has increased three years in a row has something to do with it. Why would an employer hire someone unless they produce at least what they’re paid?

A lot of younger people have little experience and no marketable skills. Such things take time to develop. Until they do, they will remain unattractive hires unless they can be paid what they’re worth. Minimum wage laws, of course, make that illegal in many cases.

Another case of good intentions gone awry.