A lot of ideas in economics can be confusing and difficult to understand.  Add some emotional attachment to them and convincing someone of a principle can be a downright daunting task.  That’s why allegories and other tricks can be extremely useful for explaining a difficult subject.  I’m always on the lookout for them and my cat was once again there to give me one.

People almost always advocate for the government to do things because they think it’s going to help.  They often can’t see much more than what’s directly in front of them, so when someone, for example, wants to raise the minimum wage, he’s only thinking about raising the income of the people who are currently making the minimum wage and how great that would be for them.  He’s probably going to get insulted if you make the claim that he’s actually going to induce unemployment for a lot of these people because he’s not thinking about the unintended consequences of a minimum wage.  Like most government interferences in the marketplace, people tend to only care about what they are trying to fix instead of how else that policy will influence what happens in an economy.

To be fair, unintended consequences can be difficult to predict.  I’m against the government calling the shots in the market not necessarily because I think the government is made up of bad people, but because I think it’s impossible to centrally plan an economy.  You need a lot of information with solid expertise to make economically productive decisions and it is only through the promotion and demotion of profit and loss that we’re able to advance as a society.

So let me tell you about how my cat gave me a lesson in unintended consequences.

I’ve got one of those nice automatic litter boxes for my cat with these cartridges of litter I replace every two weeks.  My cat, Grum, gets a fresh clean box every time he needs to use it and I don’t have to dig around searching for buried treasure every day, so it’s a win/win.  A few weeks ago I started to organize my basement better and I decided to move Grum’s food and litter box from the main area of the basement to more of a backroom area where I have the typical home appliances and a workbench staged.  Grum tends to make a mess with whatever he does, so I often had to vacuum up the cat litter and food from the carpet fairly regularly.  In the backroom, however, the floor is concrete, so cleaning up after him would be a lot easier there.

I was very happy with my plan and satisfied with myself once I moved everything.  But then I started to notice a change around the house.  I was finding the blue and white cat litter crystals all over the place.  I don’t need to tell you how nasty that is (especially when you get evidence of every place he likes to go…thank goodness he was already not allowed in my bedroom).

What was going on?  Why was cat litter getting all throughout the house?

Then it hit me.  Grum is actually less of a slob than I thought.  I thought there was cat litter all around his litter box because he was kicking it around all over the place.  What I finally realized was that the carpeting in the main room in the basement was pulling out the chunks of litter crystals stuck between the pads and toes of his paws.  Without the carpet to do that, his new path from the litter box back upstairs to a house of hardwood floors only has carpeting on the basement stairs.

My original plan was to rearrange some things in my basement so I didn’t stick my face in pieces of cat litter when I did pushups when I went down there to work out.  I didn’t want to have easily pulverized chunks of cat litter spread all around the house, but in my planning and execution of the changes, I didn’t anticipate that being a result.  Now I have to mitigate this new problem or go back to the place I had the litter box before.

Obviously, I had good intentions and I’m the only person who must suffer the consequences of my actions.  As such, it doesn’t make sense to accuse me of being a bad guy because of the negative results of my actions.  I just didn’t see it coming; it’s that simple.

Let’s switch back over to the unintended consequences of government actions now.  What makes the government’s unintended consequences even more destructive is that unlike my example here the people who tweak one area of the economy aren’t necessarily the ones who have to deal with the negative results of their policies.  If they were, then they’d be much more careful about what they did and how they did it.  Instead, many people remain blissfully ignorant of poor government policies and enact their own to try to fix things.  And this happens over and over again.

The next time you need to explain how unintended consequences work, try to think back to my cat’s toilet time.