01 March 2018
The Law of Unintended Consequences
How easy to avoid?
By Lynda Goetz
On 19th February the Prime Minister launched a review of Higher Education funding. Much has already been written on the subject, but that and other recent news items prompted some thoughts on Unintended Consequences.
The so-called ‘law of unintended consequences’ is a sociological concept which economists have long been aware of, but which politicians and scientists frequently prefer to ignore. Essentially, this rather undefined ‘law’ suggests that the actions of people, but especially of governments or administrative bodies, often result in unanticipated or unintended outcomes. An excellent essay on the subject by Rob Norton in the Library of Economics explains it well and succinctly, with background history and contemporary illustrations.
In the case of higher education, there have certainly been a number of unintended consequences since Tony Blair first expressed the view that he wanted half of all young people to have access to Higher Education. The first may well be that no-one really seems to have a clear idea what the purpose of Higher Education is any longer (article; Constance Watson). It appears to have become either the possibility of three years of ‘fun’ and/or a rung on the ladder to a ‘better’ job (maybe), rather then ‘further learning’. Apart from this muddle over what it is about, it has also led to increasingly well-paid (over-paid?) administrative staff at the top (e.g. vice-chancellors) as students have had to pay higher and higher fees. When in 2012 maximum fees were raised to £9,000, in the expectation that only the best would charge that much, nearly ALL universities raised their fees to this level. (They now stand at £9,250.)
What had been intended was that a market would be created. In other words, that the more established and reputable universities would charge the highest fees to reflect the fact that they had the best courses and most talented and able lecturers and professors, whilst the lower ranking, less well-established universities would charge lower fees. That was not, however, how the universities saw the situation, and pretty much all of them put their fees up to the maximum possible level. This was not the intended consequence, but legislators had not expected or foreseen that most universities would charge the full amount. What had in fact been created was a market where all the prices were the same – although the goods on offer varied substantially in quality and value.
One of the tasks of the proposed year-long review is (in the words of Philip Augar who will be chairing the review committee) ‘ensuring that the system meets those needs by driving up access, quality, choice and value for money for students of all kinds and taxpayers’. ‘Those needs’ referred to are the needs of ‘business, society and the economy’. One of the suggestions for examination by the review body is whether, in order to meet the questions of choice and value for money, some courses should be charged at a higher price than others. Should an English course with only 6-10 hours of ‘contact time’ a week, be charged at the same price as say a Chemistry course where students will get several full days in the labs each week? At first sight, the answer appears simple. The English course should be cheaper. This however is where the law of unintended consequences rears its ugly head. If arts courses were to be charged at less than science or engineering courses, is a possible outcome that those from more disadvantaged backgrounds and with less parental financial support will be more likely to choose the cheaper courses? If so, what will be the effect on society? Might one of the effects be that fewer scientists, engineers and doctors come from disadvantaged backgrounds because they are tempted by shorter, cheaper courses? English degrees, by their very nature, do not offer an easy route to job opportunities in any particular field.
In a different area entirely, The Telegraph last week highlighted the effects of the law of unintended consequences in the minefield that is stamp duty. So complex is the legislation that apparently even solicitors and officials at HMRC battle to comprehend all the rules and exemptions. In the case of two sisters who both took a share in their parents’ house seven years ago in a bid to avoid the worst effects of inheritance tax, one will end up paying 5% stamp duty and the other 8%. The reason for this anomaly results from the new rules introduced in 2015 in an attempt to curb the ‘buy-to-let’ market. Under these rules, anyone buying ‘additional’ property has to pay a 3% surcharge. However, anyone replacing a ‘main residence’ is exempt from this surcharge. Although both sisters have a share in their parents’ home, they are both buying their own marital home for the first time. However, one of the sister’s husband had previously owned a property which he had sold, so that couple are treated as ‘replacing a main residence’ and will therefore not pay the surcharge. The other sister and her husband had previously only rented, so are subject to the extra charge as they could not be deemed to be replacing a main residence. This is a manifestly unfair and unintended consequence of amendments to legislation intended to dampen the demand from buy-to-let landlords.
The current Brexit shambles could also provide us with a further example of the law of unintended consequences. Those Tory rebels who have tabled amendments to bills before Parliament to ensure we stay in the EU customs union may find that the consequences of standing by their principles or beliefs may well be not only to bring down Mrs May’s government but to put Jeremy Corbyn and a very left wing socialist government in its place. Is that really what they want to achieve?
In his essay, Rob Norton refers to the man who popularised the term in the twentieth century, the American sociologist, Robert K. Merton, who wrote an analysis of the phenomenon in 1936. He refers to five sources of unanticipated consequences. The first two were ‘error’ and ‘ignorance’, but the third he called the ‘imperious immediacy of interest’. By this he meant that ‘someone wants the intended consequence of an action so much that he purposefully chooses to ignore any unintended effects’. In a Telegraph article, William Hague argues that Tory MPs should draw back before inflicting a major defeat on this Government and in so doing become the pawns of ‘Corbyn’s cynical plans… of installing a ruinous socialism in the leadership of Britain’. This may not be what they want or anticipate; however, it may just be that the imperious immediacy of interest is blinding them to the unintended possible outcomes.
Merton intended to write a book devoted to the history and analysis of unanticipated consequences, and worked on it for some 60 years, but it remained uncompleted at the time of his death in 2003 at the age of 92. The law of unintended consequences may have originally primarily referred to economics and to legislation, but it does turn up in all aspects of life. Well-known examples include the damaging introduction of exotic animals or plants to countries as a food source or to control other pests (e.g. rabbits or cane toads); Prohibition in the United States in the 1920s led to large-scale organized crime; likewise the ‘War on Drugs’ increased the power of the drug cartels; the American funding of the Afghan Mujahideen against the Soviet army and the Democratic Republic of Afghanistan has been endlessly discussed as leading to the rise of the Taliban and Al-Qaeda; and of course there are numerous environmental disaster stories (e.g. acid rain) caused by our attempts to remedy some other ill or to introduce new technologies. Even the currently much-discussed plastic pollution is an unforeseen, unanticipated consequence of our drive to invent and improve, as indeed is our over-stretched NHS, burdened by the ageing, ever-expanding population created as the result of our increasing medical skills and easier life-styles. AI advances remorselessly as our scientists cannot resist pushing forward the frontiers of knowledge. The unintended consequences of that are already being imagined by writers and filmmakers, but the real unintended consequences may be unimaginable. As our science and technology improves and the world becomes increasingly complex, will our ability to foresee the consequences of our actions – political, scientific or environmental – improve too, or will those unintended consequences always be there to show us that we are not, as we like to believe, really in control at all?