Kevin Brancato at Truck&Barter posts a few paragraphs from his dissertation that deal with Mises and index numbers.
“No aprioristic theory exists to determine the exact outcomes of changes in law that apply to the economic system. In fact, Mises is fine with data, as long as you are not trying to construct economic theory out of it. If one is trying to estimate the impact of rule changes, and such changes have occurred elsewhere, Mises would applaud looking at the historical record as a guide for lawmakers and businessmen. But this is not economic theory, and there is no way to determine where—inside or outside the historical range—actual outcomes will lie.”
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I was hoping to see some comments on this. I mean, it’s one thing to logically show that a particular government regulation will harm the economy, but it’s another thing altogether to try to quantify that, and show how much harm it will do.
Unintended consequences, as the name implies, are unpredictable.
Being the huge football fan I am, I was continually struck by that fact this year. The NFL owners decided in the offseason to place greater emphasis on the rule that prohibits defensive players from interfering with offensive receivers. While it was expected that this would be a small boon to passing offenses, we saw Peyton Manning break Dan Marino’s all-time record for passing touchdowns with 49. Manning’s runner-up, Daunte Culpepper, established one of the best passing seasons of all time as well. Football fans will protest that this offensive explosion was illegitimate due to the recent rule revision, and I think they are right to say so.
But when you consider how miniscule the complexity of the rules in pro-football is to the macro-economy of the United States and the world, it is a wonder there is any order at all! Every time a new government regulation comes into play, there are massive, wide-spread consequences that are negative and unimaginable! It is a miracle that the market is able to cope with these regulations and still somehow go on, given that such systematic changes are constantly imposed upon it.
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