Read the Column »
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Consequences of Employment Protection? The Case of the Americans with Disabilities Act
By Daron Acemoglu and Joshua D. Angrist -
Prosbol: A Study in Tannaitic Jurisprudence
By Solomon Zeitlin -
Preemptive Habitat Destruction Under the Endangered Species Act
By Dean Lueck and Jeffrey Michael -
Is the Endangered Species Act Endangering Species?
By John List, Michael Margolis, Daniel Osgood
In their Jan. 20, 2008, “Freakonomics” column, Dubner and Levitt explore one of the most powerful laws in the universe: the law of unintended consequences. They tell three seemingly unrelated stories – about a deaf woman in Los Angeles, a first-century Jewish sandal maker, and a red-cockaded woodpecker – that illustrate how well-meaning laws can end up hurting the very people (or animals) they were created to protect. Here is some of the research that went into the column.
1. The Americans With Disabilities Act was passed to give disabled people better opportunities in the labor market, in transportation, healthcare, and other arenas. But the economists Daron Acemoglu and Joshua Angrist found that the A.D.A. actually worsened the job opportunities for disabled workers. Their seminal paper is called “Consequences of Employment Protection? The Case of the Americans With Disabilities Act.”
2. The ancient Jewish sabbatical law called for debts to be forgiven every seventh year (Deuteronomy 15:1) and for the land to lie fallow, with the poor allowed to eat whatever still grew (Exodus 23:10). Although the debt relief was meant to help the poor, creditors responded by making credit scarce when the sabbatical year grew near. The sage Hillel came up with a solution, known as prosbul. For a look at how prosbul melds the religious and legalistic, see Solomon Zeitlin‘s 1947 paper “Prosbol: A Study in Tannaitic Jurisprudence.” Another loophole, meanwhile, called heter mechira, was developed in response to the fallow-land portion of the law.
3. The Endangered Species Act is one of the most controversial U.S. laws ever passed. A paper by the economists Dean Lueck and Jeffrey Michael, “Preemptive Habitat Destruction Under the Endangered Species Act,” argues that the E.S.A. has actually hurt the plight of the red-cockaded woodpecker by incentivizing property owners to make their land uninhabitable to the bird. More recently, the economists John List, Michael Margolis, and Daniel Osgood found a similar dynamic in their working paper, “Is the Endangered Species Act Endangering Species?” Their animal of concern was the cactus ferruginous pygmy owl.
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Imagine people resisting the coercive actions of do-gooders in governement! No problem, though. Hillary, Barack, or John will make sure it never happens again.
Where do you guys live? Opposite land?
Of course laws have unintended consequences. However, what do you suggest in their stead? Pinkie promises?
Please,
We need legislation. The “free” market does not solve everything. As the past several decades have unfolded, we have seen more and more evidence of this. Legislation is the product of our elected representatives. Ideally, it should be democracy at work. If it is not, then we should work on creating a fairer system of election and a bigger say for the average person.
Don’t throw out the baby with the bath water.
The opportunity cost of “clearing land for development” ahead of its compulsory preservation under the ESA depends on many factors, including but not limited to the real estate market at the time, whether the land owner has lots of cash, etc. The ESA is only one of many factors a land owner will consider.
Conscience also plays a role in every human decision.
Everything (not just every law or regulation) has a potentially negative effect if considered in a vacuum. Even the Ten Commandments are ambiguous when contemplated in the context of the bible stories that surround them!
One side seeks to improve the human condition by changing human nature. The other side seeks to understand human nature and exploit it for the good of everyone.
The former never succeeds in its alchemy but unleashes many calamities through its efforts. The latter never fails of its promise but its progress is slow and uneven.
The former invariably turns to the State to bring about the change it seeks by way of coercion. The latter to liberty – more freedom and more information for the individual.
The former accuses the latter of being coldly rational and heartless. The latter accuses the former of being emotional and stupid.
Apparently there’s nothing new under the sun.
D.R. Shaw: People arn’t dieing from a lack of insurance. People though are dieing as a result of being sick or injured. And, people may be dieing due to health care professionals not be willing to apply their expertise to save their lives without payment. Isn’t it the greedy doctors who see a person dieing and refuse assistance to keep them alive that is at fault?
The environmental laws passed in the early 1970s that held a land owner responsible for cleaning up the property, even if they had nothing to do with the cause of pollution, caused businesses and developers to shy away from potentially contaminated urban sites. The result–virgin suburban and rural land developed, and the decimation of the cities as the middle class and businesses left and the tax base eroded.
The worst possible result from the sponsoring liberals point of view.
In the same vein, the lead from a story in Sunday’s Washington Post:
Most diversity training efforts at American companies are ineffective and even counterproductive in increasing the number of women and minorities in managerial positions, according to an analysis that turns decades of conventional wisdom, government policy and court rulings on their head.
I recall when all the sidewalks (at street corners) were being carved up to create ramps for wheelchair users… As I remember, the first day the first ones were unblock because the concrete had hardned and dried, a blind person with a white cane (no guide dog) walked into the street and was struck and killed, because he never felt the curb of the sidewalk to give him a clue where the sidewalk ended. Now all the ramps must have a texture to indicate the edge, where a curb would be.
Unintended consequences accompany every act. To imagine otherwise is to overestimate your imagination.
I find these columns stimulating in general, since they usually offer a different perspective on a familiar issue. But in this case, the example involving the ADA is misleading, and ends up reaffirming the conservative nugget that progressive laws “harm” business.
I showed the case to a deaf colleague of mine, and one of the first things he noticed was the exorbitant price for an ASL (American Sign Language) interpreter. Even in our small town, he said, interpreters run in the $40-50/hr range, so surely L.A. would be able to yield some better bargains. Additionally, many institutions like universities and hospitals keep interpreters on as staff, making for economies of scale. It seems like the doctor in your example is a poor businessman, failing to shop around for alternatives and instead reaching for an economic excuse for what seems to be his bias against “difficult” patients.
Also, if one assumes that the market can solve such problems on its own (which I don’t necessarily assume), perhaps if more people saw ASL interpreting as a viable career, the number of interpreters would increase and their labor costs would decrease, making the problem you cite no more difficult than finding a babysitter in order to go to the doctor. (Some colleges are now allowing ASL to count towards foreign language requirements, attracting students who would not otherwise have the opportunity to be exposed to the language.)
This is not to argue against the idea of unintended consequences, but it’s silly to expect a single policy (of any kind) to immediately change ingrained societal patterns. The consequences in the examples cited here assume the inevitability of human greed, but I for one would not want to see greed be the reason NOT to try to change the world. Neither policy nor human behavior is a natural law — both are extremely adaptable (although not always in easy-to-control ways)…