In my column for the September 17th, 2008, edition of the Pittsburgh Tribune-Review I lament the childish simple-mindedness of too many “solutions” offered by politicians, pundits, and professors. You can read my column beneath the fold.
Our world is full of effects that can be achieved with simple acts and without much in the way of unexpected consequences. You want to make a loud noise? Bang a drum with a stick. It’s easy. A toddler’s grasp of this cause-and-effect relationship is both correct and as sure as is that of your average rock musician, barista or college professor.
But what about, say, making poor people richer? The same confidence that we have in simple acts — simple solutions — leads many people to imagine that bringing about the desired effect is just as simple as is making a loud noise.
What’s the problem? Poor people need more money. Who has the money? Rich people. Solution: Take money from rich people and give it to poor people. Voila! Problem solved.
Any toddler can understand this “solution.” Unfortunately, to endorse such a solution is not only to misidentify the real problem, it is also to overlook the complexities that give rise to the problem as well as those other complexities that inevitably cause simple solutions to go awry. It’s generally not a good idea to address complex problems with solutions that you’d expect from a typical 4-year-old.
Why are some people poor? Sometimes the reason is irresponsible behavior by these people — behavior that is too shortsighted or too anti-social.
In other cases, especially in non-Western countries, people are poor because they suffer the misfortune of living in societies with social institutions and governments that discourage the enterprise and commerce necessary for widespread prosperity.
And, yes, sometimes people even in America are made poor by a string of bad luck.
The toddler doesn’t grasp these differences. The toddler doesn’t necessarily understand that giving money to people who are made poor by their own irresponsible behavior is really to reward irresponsible behavior — and such rewards will not only do nothing to prompt recipients of the handouts to act more responsibly, such rewards might well also cause other persons to slip into patterns of irresponsible behavior.
The toddler also doesn’t understand that bestowing “foreign aid” money on governments of desperately poor countries gives those governments the perverse incentive to continue the policies that keep their citizens poor.
Fortunately, public policy isn’t made by toddlers. Or is it?
Public policy isn’t made literally by toddlers, of course. But it does seem to be made, often if not always, by people with the minds of toddlers.
Toddlers typically go for the obvious, blunt solution to any problem. If little Joey wants baby Timmy’s toys, Joey tries to take them — unless and until Joey is taught better by his parents.
But isn’t little Joey’s primal, uncivilized instinct really what motivates much of today’s policymaking? When steelmakers in the U.S. want to sell more steel, they simply ask government to make it more difficult for Americans to buy foreign-made steel. Government obliges with higher tariffs enforced ultimately with guns. Simple, direct, and — just like little Joey’s thievery — poisonous to peaceful and prosperous human cooperation.
So, too, with minimum-wage legislation: No one this side of sociopathy rejoices in seeing someone working for very low pay. Even a toddler can sympathize with low-wage workers. Ask that toddler “how to raise these workers’ wages” and he or she will likely respond “order the bosses to pay them more!”
Pretty simple. Also pretty naive.
No firm can long afford to pay any worker an hourly wage higher than that worker’s value to the firm. Doing so would bankrupt the firm. And — what’s equally true — no firm can long afford to pay a worker much less than that worker’s value to the firm. Doing so would cause productive employees to take jobs at other firms that pay these employees wages closer to the value of their productivity.
Neither of these facts, and especially the latter, is immediately obvious to a toddler. Indeed, a toddler might be unable to grasp them even if they’re explained clearly to him. The toddler, with a brain still not yet fully formed, is probably incapable of understanding that a simple “solution” of this sort will cause some workers to lose their jobs and cause others to lose valuable fringe benefits.
These facts, however, are not beyond the grasp of an adult of ordinary intelligence. And yet, how many adults — including those holding political office — support minimum-wage legislation as a way of raising the incomes of poor people?
It is the mark of a mature and thoughtful mind that it recognizes that desirable effects are not always best achieved — or achieved at all — by what seems to be the most direct course.
Too bad so many of our policymakers apparently still have toddler brains.