Good intentions do not always lead to good outcomes. In fact, many times, they lead to dire consequences.
One of the first principles students learn in a good economics class is that individuals respond predictably to incentives and that individuals subjectively determine their own benefits and costs. In other words, nobody knows the individual better than him or herself. Moreover, everyone looks at the world through his or her own glasses.
I use three main examples to illustrate this.
1. I’m being exploited.
On the first day of my economics classes, I tell my students that if they saw my paychecks that they would realize the school is exploiting me. After a few heads nod in agreement, I ask them if they think that I can weigh my own benefits and costs and choose what is best for me.
Most, if not all, nod in agreement. I inform them that, of course, I would love to get paid more (because I deserve it!) and that the school would like to pay me less, but the fact that I keep showing up to teach and they keep employing me proves that I and my employer are both, in a sense, winning.
I do my best to expose students to economists and other authors who come from a more free-market perspective on various issues because my students probably have not and will not receive this perspective again. Of course, one of the names my students get to know is that of my former professor Dr. Walter Williams. Eventually, I use him as an example of looking at the world through one’s own glasses and unintended consequences.
I tell my students that if Professor Williams saw my paycheck he would laugh — or, perhaps, cry — because he gets paid so much more than I do. So, what would happen if he flew out to California to meet with the president of my school (actually, I teach at two schools, but Williams could meet with both the presidents) and made an appeal on my behalf, to get my salary increased.
Williams could say, “If my former student Ninos Malek is teaching here, then he must be paid what I would be paid!” I ask my students how they think I would feel. Most say I would be extremely happy. Actually, I would not be happy! I would respectfully tell my favorite professor to stop caring about me and fly home. Why?
Because the presidents of my institutions would tell Dr. Williams, “Oh, Ninos Malek must be paid what you get paid? Well, Ninos Malek can instead be paid nothing, because we can cease employing him as a member of the faculty.” The point I am trying to make is that in this example Dr. Williams would be looking at the world through his own lenses — the reference frame of his own paychecks — not mine. His advocacy on my behalf could lead to an unintended consequence.
Even though I would love (really love) to get paid more, the fact I choose to come to work each day must logically mean that this job is my best option and that I am “winning” in the exchange.
2. Do wealthier parents love their children more?
As another example, I tell my students that my wife and I send our two-year old daughter to preschool and that other parents in wealthy countries send their children to school, but that many parents in poor countries send their children off to work. So, obviously, wealthier parents love their children more than poor parents.
When I make this claim, many students strongly shake their heads in disagreement. I then argue that wealthier parents can make decisions for their children better than poor parents can. Again, the students strongly disagree.
But then, if I ask my students whether child labor should be outlawed — thus taking that choice away from parents — they say yes.
My point is to drive home the fact that many individuals from wealthier countries, including some of my students look at the world through their privileged glasses.
Their good intention in trying to outlaw child labor can actually hurt those children. The reason those children are working is not because their parents don’t love them. Instead, the family actually needs the labor of their children to help provide enough income for bare necessities like food. To put it bluntly, before a child can get educated they need to be alive.
And once again, the fact that families are choosing to send their children to work means that’s the best option they have. Outlawing child labor can actually hurt them by taking away that option and forcing them into starvation or riskier work (including prostitution).
3. Let’s make Ferraris mandatory
Finally, I use my Ferrari example. I ask my students how they would feel if some famous, kindly billionaire who wants us all to have sports cars got a law passed declaring if you are driving a car it must be a Ferrari. Many of my students smile and think it’s a great idea. However, by this time, some of my students understand what that would mean — walking a lot more!
If the only cars you can drive are Ferraris, then most people won’t be able to afford to drive at all.
The problem is that this hypothetical billionaire with good intentions is looking at the world through a billionaire’s glasses. My life is better off driving my old Honda Civic than it would be walking. Once again, the fact that I drive my Civic shows that it is the best option I have (until I get that raise).
As another one of my former professors, Don Boudreaux, argues in a Learn Liberty video, intentions are not results. Looking at the world through your own glasses can lead to unintended consequences.
All people, rich or poor, should be free to make their own decisions for themselves and their families because they subjectively determine their benefits and costs. It is pure arrogance to impose on others the lenses through which we look at the world.