“Unintended consequences” is a recurring concept on The Bob Zadek Show, invoked to describe the harms that follow when government intervenes in markets or restricts liberty without accounting for the full causal picture. Guests and host apply it to a 2009 automobile subsidy, to post-11 security spending, to the Endangered Species Act, and to the federal ban on organ sales. On the show the phrase does double duty: it is a description of specific policy failures and a general argument for restraint.
Bastiat and the Broken Window
The show’s earliest treatment of the topic frames it through Frédéric Bastiat. Bob Zadek introduces Bastiat as a French philosopher who lived roughly from 1801 to 1850 or 1851, and who, though he would not have used the label, was a libertarian; Zadek commends Bastiat’s book The Law to listeners Cash For Clunkers is a Dud (2009). Zadek opens the episode with a Bastiat quotation — that the state is a great fiction by which everyone tries to live at the expense of everyone else — and says Bastiat could have been describing the Obama administration and the legislation under discussion, the Cash for Clunkers program Cash For Clunkers is a Dud (2009).
The episode pairs that framing with the “Broken Window Fallacy,” which the show’s summary identifies as the lens for the discussion. The guest, Katherine Mangu-Ward, a senior editor at Reason magazine, describes the administration’s economic argument as simple: give people a chunk of money to buy a car and they will buy a car now. She concedes this is true up to a point, but asks whether those buyers would eventually have bought the cars anyway, further down the road — in which case demand is merely moved from the future to the present, which she says has political value but no economic value Cash For Clunkers is a Dud (2009).
Cash for Clunkers
Zadek describes the program as a $4 billion federal program and asks Mangu-Ward for the administration’s economic justification Cash For Clunkers is a Dud (2009). The unintended consequences the two identify fall on several groups. Mangu-Ward says used car dealers are being hurt a lot, and Zadek adds people who repair the clunkers, who do not get to make any money; Mangu-Ward notes that scrap metal dealers are doing quite well, which she offers as a point on the plus side Cash For Clunkers is a Dud (2009). Zadek calls these unintended consequences that nobody built into the equation, and characterizes the administration’s claim of success as having persuaded people to accept $4,500 Cash For Clunkers is a Dud (2009).
Mangu-Ward develops the point about production and inventory. Ford, she says, is speeding up production of Escorts because the Escort fits the criteria the government has laid out; but since no one is sure how long the money will last — the first set of appropriations went in four days — production rises and dealers stock up on certain cars, and at some point the money dries up Cash For Clunkers is a Dud (2009). She predicts dealers will be left holding the bag, both because they reasonably expect a drop-off from normal sales once the program ends and because they are waiting on government checks; she says she read somewhere that a bunch of dealers are half a million dollars, a million dollars in the hole waiting for a government check Cash For Clunkers is a Dud (2009).
Zadek generalizes from his own lending business. He says that as a commercial lender he will not make a loan where the borrower might not survive because of something Congress does, giving healthcare providers as an example, because once politics is interjected it is impossible to make a lending decision Cash For Clunkers is a Dud (2009). Applied to Cash for Clunkers, he says the losers are automobile repair shops, used car dealers, and auction houses that auction off used cars, and that when people cannot make intelligent business decisions based on the market they wait on the sidelines and the economy is stifled Cash For Clunkers is a Dud (2009).
Mangu-Ward extends the harm to charities. She describes a large set of transactions in which people gave old cars to charities that either fixed them up for people in need or sold them for scrap, and says that given the choice between a small tax deduction and $4,500 from the federal government, people will choose the government money — hurting those who depend on the secondary effects of that marketplace, such as the people who run car conversion charities Cash For Clunkers is a Dud (2009).
The knowledge problem
Zadek’s summary statement of the concept is that government never intended to harm the charities, but that the economy is too complicated, so when government gets involved without doing the research the unintended consequences invariably produce detrimental effects that wipe out any possible beneficial effects Cash For Clunkers is a Dud (2009). He frames the case for staying out of the economy not as visceral distrust of government but as a claim that it cannot be done: 200 or 300 million people each making a decision based on self-interest collectively outthink a handful of legislators, who are also motivated by survival, reelection and party politics Cash For Clunkers is a Dud (2009).
Mangu-Ward adds a timing dimension. She says it is bad when Congress puts a huge premium on acting quickly, because with warning the country’s economic actors can adjust — not optimally, and with unintended consequences still — but that adding money to a program mid-stream makes it even harder for people to compensate for the unexpected, and she cites healthcare reform as an example of legislation rushed through Cash For Clunkers is a Dud (2009). Zadek asks why there was any rush at all, saying there was no calamity about to happen and that the drivers were living fairly normal lives, just driving cars with low gas mileage Cash For Clunkers is a Dud (2009).
Security, species, and organs
The concept recurs in later episodes with different subject matter. In a discussion of war and extra-constitutional power, guest Chris Preble says libertarians like to talk about unintended consequences, and urges looking not at just what a policy aims to do but at what other things have grown out of it; he applies this to the TSA and other entities created since 9/11, saying the direct dollar costs of the homeland security infrastructure, and the harder-to-quantify costs in lost liberties, are vastly greater than the threat they confront War – A Rationale For Extra-Constitutional Power? (2013). Preble says the research showing costs far exceeding risks has been done by colleagues of his and others and is quite good, and that the infrastructure will end when the public is no longer so fearful that political leaders will accept the small likelihood of a subsequent attack War – A Rationale For Extra-Constitutional Power? (2013).
An episode on the Endangered Species Act is described as a discussion of the act’s unintended consequences and regulatory overreach, and of how the act shifted from protecting iconic species to being used as a tool for land-use control, with attention to the dusky gopher frog case in Louisiana and the Delta smelt’s impact on California’s water infrastructure Can California’s Endangered Species Survive U.S. Fish & Wildlife Policy? (2018). Zadek’s introduction notes that Congress enacted the act in the ’70s to protect species that were endangered, and asks whether the act worked and whether there are unintended consequences to it; he tells listeners that everyone who owns even a small plot of land should live in fear of the act Can California’s Endangered Species Survive U.S. Fish & Wildlife Policy? (2018). The guest is Tony Francois, an attorney with the Pacific Legal Foundation, who Zadek says works out of Sacramento and will help prepare a case for the Supreme Court in the fall term Can California’s Endangered Species Survive U.S. Fish & Wildlife Policy? (2018).
A 2014 episode with Sigrid Fry-Revere is described as a discussion of the unintended consequences of the National Organ Transplant Act of 1984, which banned organ sales in the United States, and of the Iranian model of compensated kidney donation as a possible answer to the chronic organ shortage, along with the ethical distinctions between a black market and a regulated system of compensation A Vital Issue: Sigrid Fry-Revere on Iranian Kidney Markets (2014). A 2015 episode with David Boaz of the Cato Institute, on his book The Libertarian Mind, is described as applying libertarian principles to the failures of the drug war and the unintended consequences of the welfare state, among other topics David Boaz on The Libertarian Mind (2015). A 2011 episode with Gary Johnson is described as covering, among other things, the unintended consequences of government interference in the housing market and agriculture Straight Talk with Gary Johnson (2011).
Across episodes
The excerpts show no development in the treatment of the concept across episodes. Cash for Clunkers supplies the only extended argument, in 2009, with Bastiat and the knowledge problem as its frame; later episodes — Preble on homeland security in 2013, Fry-Revere on organ markets in 2014, Boaz on the welfare state in 2015, Francois on the Endangered Species Act in 2018 — invoke unintended consequences as a shared premise rather than revising it, and the excerpts for those episodes are largely summaries rather than transcripts of the argument.
What the sources do not cover
The excerpts do not state the outcome of the dusky gopher frog case, what any court held, or which constitutional provision was at issue. They do not give the terms of the National Organ Transplant Act beyond the ban on organ sales, nor the details of the Iranian compensated-donation model. Several excerpts break off mid-sentence or mid-exchange, and nothing is reported here from beyond those points.