In the mid-19th century, English engineer George Cayley created a safety device that promised to save millions of lives today. His seatbelt kept automobile passengers from flying from the car after a collision, and eventually was installed in every car. However, seatbelts did not save as many lives as they should have. Geographer and risk theorist John Adams analyzed the numbers and found that “contrary to conventional wisdom, mandating the use of seat belts in 18 countries resulted in either no change or actually a net increase in road accident deaths,” as Time puts it. Why? This was a classic case, in economic theory, of the Law of Unexpected Consequences: when the “actions of people—and especially of government—always have effects that are unanticipated or unintended.”With the net number of accidents staying the same, it turned out that people felt more reckless when wearing a seatbelt and engaged in riskier behavior.
In 1989, Mexico City introduced an ambitious program to reduce smoke and environmental damage within its boundaries. Hoy No Circula reduced vehicular emissions by prohibiting some cars on the road on certain days of the week, based on the last digit of license plate numbers. Explains Lucas Davis in an RFF article, “While the hope was that drivers would shift to low-emissions forms of transportation, such as the subway or the public or private bus systems, no one got out of their cars. Instead, the evidence indicates that HNC has led to an increase in the total number of vehicles in circulation. What is the easiest way to circumvent the Hoy No Circula program? Buy a second car. A driver with two vehicles can drive every day of the week as long as the last digits of the license plates don’t match. Plus, the data shows that most of the new cars are, in fact, used and imported from other parts of the country, and thus tend to be high-emitting.”
These stories are a cautionary tale to those who are certain of which governmental policies they feel will solve their problems. Reality does not always reflect what is expected. The coal used for electric batteries in Tesla cars makes them worse for the environment than BMWs in some areas. High minimum wages in 2013 caused an estimated 700,000 jobs to be lost. The real world is fickle. It doesn’t lend itself to expectations as easily as we would like to believe. In the fragile ecosystem of human interaction and psychology, changing one variable, regulating it, or leaving it alone, can have completely unexpected beneficial or devastating effects on another. It behooves those who confidently predict policy effects to keep this in mind as the United States passes laws and navigates intricate policy strategy.