Social Order? There’s No App for That


Economics studies unintended consequences. People pursue their own interests, however they choose to define them. Under the right conditions, as Frederic Bastiat reminds us, “Paris gets fed.”

Profits and losses have told Apple, for example, that iPhones and iPads are a pretty good idea. In hindsight, it also seems obvious that FedEx was a pretty good idea, too. But who would have planned it? And indeed, if we take seriously the apocryphal story saying that FedEx founder Fred Smith received a C or something on the paper in which he outlined the idea during his undergraduate studies at Yale, should we think that a benevolent planner would have given the green light for such a radical idea?

Indeed, who would have greenlighted Microsoft? The Macintosh? the iPod? Big problems emerge when you give people veto power over others’ decisions. In his book Applied Economics, Thomas Sowell recounts an example in which a bureaucrat in India prohibits the importation of face creams because he doesn’t want poor Indian women “wasting” their money on such fripperies peddled by multinational corporations when they should be buying food. After reading passages like that, I get a deep sense of sadness at the world we have lost at the margin. Somewhere, someone’s life was made a little worse by a bureaucrat who thought he knew better than she did what was good for her.

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Art Carden is a Research Fellow at the Independent Institute in Oakland, California, and Assistant Professor of Economics at Samford University.