Good intentions are not enough. This statement sums up the primary critique free-marketers have against our central-planning counterparts. Joseph Sunde made this point in his post about fair trade. In February, economist and theologian Jay Richards gave a speech entitled “Good intentions aren’t good enough” at the University of Mobile. Indeed, the argument has been made exhaustively, but for those not blinded by their own good intention the facts make the case themselves.
For example, five years ago, Matthew Ladner of the Goldwater Institute published How to Win the War on Poverty: An Analysis of State Poverty Trends. In this study, Ladner utilizes ten years of Census Bureau data (1990-2000) and compares the change in poverty rates in all 50 states. The results, even adjusted for immigration and economic catastrophe, are definitive. The states with large poverty programs actually increased poverty over that time, whereas the states with the lowest levels of taxation and government spending drastically decreased poverty. Ladner says, “although there are doubtlessly some who benefit from high state government spending, the poor do not seem to be among them.”
His proposed solution is for politicians to stop passing legislation out of their good intentions, because no one is capable of solving the problem of poverty. Ladner says that “the failure of many government programs to reduce poverty should instill policymakers with a sense of humility. The causes of poverty have proven to be complex, and the ability of government programs to affect them has been limited.”
The most recent event that pits good intentions against results has been President Obama’s $800 billion stimulus package. A study released last week quantitatively shows that the job-centric legislation has actually resulted in a net loss of 550,000 jobs. Timothy Conley and Bill Dupor, the two economists who authored the report, conclude that “approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs.” Arguably a private sector job represents more economic benefit than a government job, so the actual detriment to the national economy may never be fully understood.
Many economists have criticized the President saying that he should have known that a net job loss would have been the result. Hans Bader of the Competitive Enterprise Institute wrote that “while pushing the stimulus package through Congress, Obama cited claims by the Congressional Budget Office (CBO) that it would save jobs in the short run, while ignoring the CBO’s own conclusion that the stimulus package will actually shrink the economy over the long run, by increasing the national debt and thus crowding out private investment.”
These policies and others provide a never-ending stream of data that make a clear case that well-intentioned legislation often has negative, unintended consequences. As Ryan Messmore of the Heritage Foundation has said, “we could describe some of these public policies in similar terms to Newton’s third law of motion: Not only do these government actions have reactions; they are often opposite reactions than those intended.”
Thomas Sowell said last year when writing about Lyndon Johnson’s great society, “We can give him credit for good intentions, so long as we remember what road is paved with good intentions.” To co-opt Sowell’s analogy, we should be mindful of any politician trying to justify legislation by taking us on a guilt trip. That trip will likely lead down the road paved with good intentions.