Week 15 Reflection -- Coercion and Unintended Consequences

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Dr. Davies's lecture was pretty neat, and he used stories and analogies to make his concepts relatable to the general public. The main takeaway from his talk was that coercion fails because central planners have to make many decisions, but things in the world are constantly changing. So by the time a plan has been implemented, the issue has evolved so much that the resolution is often non-applicable. However, the other option – cooperation – has its own drawbacks to take into consideration. Cooperation tends to fail because we are all different and some of us will be stronger than others in different ways; thus we can exploit the weaker ones around us. Due to these concepts, societies must have the perfect balance between cooperation and coercion to achieve economic freedom.
The neatest problem with coercion that Dr. Davies talked about was the knowledge problem, which often leads to unintended consequences. There were multiple instances where regulations and laws were put in place to reduce a negative result, but instead, it ended up increasing the frequency of said negative outcome. When hearing this, I began to compare these conundrums to opportunity costs often examined in economics. They can either choose to have no tax on sugary drinks in Philadelphia, and have a high percentage of the population develop diabetes, or put a tax on the drinks, increase profits, and reduce unhealthy habits. It sort of seemed as though when central planners put policies like this into action, they weighed the opportunity costs but did not consider the human element. People have minds of their own, and when things become more expensive they will find a way to work around them and ultimately get what they want. To reduce incidents of faulty electrical work and electrocution, electrician licensing requirements were developed, but rates of faulty electrical work went up. To reduce the rate of sugary drink consumption, a 30% tax was added to each soda purchase, although sales were reduced, consumption remained the same. And when Mexico City wanted to reduce pollution and banned specific people from driving on certain days, pollution increased. You cannot expect people to not fight back against fairly arbitrary rules and regulations; human beings are creative and stubborn creatures that will work to find a solution that makes their lives easier. So coercion and the use of force alone are ineffective, we must impose coercion to prevent people from causing economic harm, but elsewhere we can apply cooperation.