Unintended Consequences

How is this different from the argument against the Iraq War? People said it would be a disaster, but they weren’t always sure exactly what form the disaster would take. For instance, some antiwar groups said that Saddam’s army might fight it out in the streets of Baghdad, turning into a charnel house with tens or hundreds of thousands of dead civilians. Didn’t happen, not right away, though in the long run the bodies did pile up on the scale predicted.

So if some rightwinger wishes to predict that Obama’s stimulus package will prove disastrous without getting specific, that’s fine. If it proves disastrous in some way, they can take credit for predicting it as far as I’m concerned.

The argument I’ve heard most often is not “Yes, I was wrong about the War on Iraq but my opponents were wrong about the details, but “Yes, I was wrong about it, but it was the right position to take because the antiwar side were dirty hippies|uncivil|Saddam appeasers”.

First, I think the idea expressed in this post is right, and I am confident that there will be many future examples to refer to, across a variety of topics. The immediate practical implication is to have easy reference to such examples by labelling posts with a ‘let’s call it a draw’ category.

Second, I think Martin Wisse is very right also. “Yes, I was wrong about it, but it was the right position to take because the antiwar side were dirty hippies|uncivil|Saddam appeasers”

A variation of this is in the area Global Warming where ‘skeptics’ will sometimes say that “Yes, the ‘warmers’ were right about all the details, and the general climate picture, but they don’t have the right ATTITUDE. And besides they are against freedom, democracy and the holy market, so they can’t be trusted anyway.”

Iraq, in 2002 and early 2003, was not invading anywhere, was not about to invade anywhere and was not threatening to invade anywhere. Iraq had nothing to do with Al-Qaida. Iraq might have had WMD, but once the weapons’ inspectors were in Iraq there was a perfectly good “Do nothing” option. The onus was on those in favour of an invasion to come up with a coherent argument for an invasion, and they failed to do so. As Righteous Bubba says, the argument against the invasion of Iraq was not that it would be a disaster but that it was wrong. The fact that it has been a disaster is an illustration of why international law was framed to make it more difficult to start wars and why we should not lightly discard international law: wars tend to have unintended consequences and the phrase “it’ll all be over by Xmas” is usually a hollow joke. But the main argument against the invasion was that no coherent argument was made for it (except assertions like “we know Iraq has WMD” which proved to be wrong).

There isn’t a “Do nothing” option about the economy. Something has to change. Any change will create pain for somebody. So it isn’t enough to point out the disadvantages of a plan for the economy, as all plans will have disadvantages. Any critique has to take into account the balance between potential benefits and costs and specifically who will gain and who will lose.

What Guano said. It is inappropriate to evaluate the Iraq war (a clear moral wrong, or, less contentiously, a grave violation of important moral norms eg. peace, sovereignty) in the same way as the health plan (a morally neutral policy choice which may turn out to have good or bad consequences). These should be assesed in different ways. If you commit a moral crime then you must shoulder a greater responsibility for the negative consequences that flow from your action then you would have to in the general case.

Guano in #13: “wars tend to have unintended consequences and the phrase “it’ll all be over by Xmas” is usually a hollow joke.”
Distinguish these propositions. There are quite a few examples of quick wars: France-Prussia 1870-71, Israel’s 6-day War of 1967, and the two Gulf Wars come to mind. If you break WWII down into campaigns, many of these were walkovers. The law of unintended consequences is a much stronger hypothesis. Each of these short wars had nasty long-term consequences. Bismarck for example was forced by public opinion and the triumphant German Army, against his better judgement, into the annexation of Alsace-Lorraine which made a permanent enemy of France and contributed to WWI.

Along Martin Wisse’s lines I think in many cases the syllogism ran something like this:

Since nobody reasonable says otherwise (only a bunch of stupid hippie shits) going to war is perfectly reasonable.
Since going to war is perfectly reasonable anybody who says it’s not must be a stupid hippie shit.
ERGO going to war is perfectly reasonable and anyone who says it’s not is a stupid hippy shit.

Is it just me or does the first paragraph of #6 make no sense whatsoever?

novokant@22:
I’ve given up prophetizing for the New Year, but I’ll make an exception in a good cause.

I think what John is saying is that the arguments of philosophy being abstract and universal, an argument from philosophy, and by extension a comment on an argument from philosophy, has real-world relevance only in so far as a stopped clock is right twice a day. The practical consequences being, either argue differently or accept ineffectuality.

Oh, I see John has contradicted me in a comment he posted after I composed this comment. Never mind.

Guano in #13: “wars tend to have unintended consequences and the phrase “it’ll all be over by Xmas” is usually a hollow joke.”

18 James Wimberley 01.07.09 at 1:13 pm:
“Distinguish these propositions. There are quite a few examples of quick wars: France-Prussia 1870-71, Israel’s 6-day War of 1967, and the two Gulf Wars come to mind. ”

James, an important point. The first Gulf War was a walk-over; the second was and is not. The Cheney/dead-ender trick of proclaiming an end to a war where convenient is not one we should accept. And in terms of practicality, it’s like me and you in a bar, with me planning on punching a guy out, and having no plan whatsoever for dealing with the rest of the bar fight which would likely develop. You wouldn’t accept such a declaration of success then; you shouldn’t now.

We’re also seeing that in Wall St, where a lot of the top guys pulled down tens of millions of $ per year, for ongoing deals which turned out to be money-losers. In their case, the ‘end’ was declared every year, when they got their bonuses. If half of those bonuses were subject to five-year clawback clauses, then they’d have behaved differently.

Barry, I was making a general point about the difficulty in telling the difference between correct judgment and good luck when someone gets a forecast right. The invocation of the roulette table was to point out that someone can get a prediction right even when the setup is artificially set up to be purely random, as you pointed out. The point was that being skeptical of someone’s claims to be right when that person got the details wrong can be the right thing to do (it depends on how detailed the details were and how many details they got wrong or right).

My argument is valid or invalid independent of how honest or dishonest I am as it does not rely on my honesty.

“Obviously anyone who predicted that the Iraq War would be a disaster because our conventional military would get bogged down right at the start was just wrong”

Actually, this is the point where I disagree. It was entirely possible that Saddam could have ordered his military to turn Baghdad into Stalingrad and so antiwar critics were justified in listing this as one of the reasons the Iraq War could have been a disaster. As it happened, Saddam did not do this, but there was no way to know this ahead of time. The Iraq War was virtually certain to be a disaster, but one reason we knew (or should have known) this was because there were so many different ways it could have gone wrong. People who listed those ways are not discredited because some of them didn’t happen.

That’s my point. If you think a policy is wrong, you are obligated to explain what bad consequences might ensue and if some of those consequences occur and others do not, you are vindicated, unless you predicted that all of them would certainly occur.

But I have no interest in defending the rightwingers that John Holbo is attacking. In fact, I’m attacking their argument.

Equating the issue of whether or not one was ‘right about Iraq’ with one’s ability to make any kind of forecast about how it would unfold in military terms seems weird to me (and maybe also a bit elitist). People had all kinds of reasons for opposing the war: the case as presented seemed like BS to them, the debate in the run up to the war had been overwhelmed with propaganda and opposing voices were being silenced, they didn’t trust Bush or the American ruling class more generally, they were opposed to aggressive war on principle, they didn’t want to offer support to US/British militarism/imperialism, etc. All these seem to be respectable reasons for refusing to sign up to it, imo, not ‘knee-jerk’ reactions that disqualify them from being credited with good judgment.

It wasn’t aimed you, Donald, and it was perhaps a little too hectoring in any case.

Given that THIS crisis isn’t all tidied up and over with it seems a little premature to describe it as a finished thing, from which fairly precise conclusions as to its nature and its fit to various predictions can be drawn. Unless Sebastian and others are privy to knowledge unavailable to the man in the street, of which I am clearly one, as to the finished and complete nature of THIS crisis.
So, given its ongoingness, MUCH WORSE remains available.
As to the specific charge of lack of specificity as regards various behavior-related warnings etc, i.e. the bus fatality, observing someone smoke crack cocaine in an increasing and daily program of indulgence it’s possible to say with confidence and concern something bad will inevitably befall them, but the range of bad outcomes is pretty vast.
Anyone telling that person well there then now bad things are on the way, should get some credit and status r.e. any further predictions, especially from that person.
As opposed to those exhibiting various enabling behaviors etc. including supply and encouragement.
As to also the Iraq war, which may seem relatively tidied up and just about over with, but what it really was, the invasion and continuing occupation and vicious destruction of infrastructure of that one country being only a symptom of a larger pathology with which we will evidently remain engaged for some time yet, it’s the same myopia that will allow us to talk about it as a finished thing, that war, when in fact that war is a stage in a processional series of actions and events still unfolding.
Yet those who spoke against it as a bad idea from the get were, and remain, correct.

Donald makes a very important point

The Iraq War was virtually certain to be a disaster, but one reason we knew (or should have known) this was because there were so many different ways it could have gone wrong.

Here’s a free bit of investment advice; looking out for situations in which there’s a load of ways to lose money and only a few ways to make it, and avoiding them, is the basis of sensible securities analysis.

Sebastian

The problem in the economic sphere is that a huge proportion of the people you are talking about (those who pegged A crisis on the dollar) really can’t get a substantially similar kind of credit. They were offering all sorts of policy prescriptions to fix the ‘dollar problem’ which would have had nearly no effect whatsoever on the actual crisis.

Surely in your example it would have been:

A: The fundamentals of the US economy are strong, and our free market system is vastly preferable to blah blah blah.

B: I disagree and think that there’s a massive great dollar crisis on the way. I’m gonna short SP500 futures and buy yen versus USD

I would say that in this case, even though he didn’t make any policy prescriptions, B would deserve your respect, and even if you disagree he still has the money.

It seems to me, however, that a good analogy might be this: the boiler is about to blow up. Its not clear what valve or pipe or gasket or section of boilerplate is going to give first, but it’s bloody obvious the rumbling thing is gonna go soon enough that we should be worried about it.

Oddly enough the same thing happened with the last boiler, the one before that and the one before it. And each time the people who sold me the boiler told me that this time I’d got a new model which was perfectly safe. It almost makes me wonder if there are other ways of heating my house.

The problem with your example however is that it essentially gets to the point of “you are going to die”. It isn’t much of a prediction. We are all going to die. “At some point in the future there will be a financial crisis” isn’t a very interesting prediction because almost anyone can predict the virtually certain.

Counterpoint: Predicting a financial crisis is almost the most interesting type of prediction you can make if you’re prepared to put your money where you’re mouth is, and the great thing is that you always do, in fact, get an answer about whether you’re right or wrong, in the form of money. Someone who had made this prediction and acted on it would definitely be in a position to say to Sebastian “If I’m not smart, how come I’m so rich?”. (and it is clearly not a situation like a casino game; it’s more like a racetrack)

Furthermore, implicit in the prediction “I think there’s going to be a financial crisis so I’m short SP500” is the prediction “I think that said financial crisis is going to arrive before the next big leg up, which would obviously kill my short futures position”. This isn’t a trivial prediction at all – someone who predicted in 1998 that dot com stocks were going to crash would have lost their shirt and their job (and several did).

I will also confidently predict that the sun will not have ceased to burn by 5 years from now, that wind will blow the leaves from the tree in front of my yard down the canyon, and that if you smoke for a long time you will eventually die of something. These predictions are accurate in an unuseful way.

“Money talks and bullshit walks” (proverb)

If you don’t like the current economic crisis now, you really wouldn’t like it if the US had engaged in policies along the lines of what is prescribed if you think the major problem is the dollar

Not at all true. Lots of people (Brad Setser, for one, I think) thought that the current crisis would take the shape of a dollar crash and back in 2002 were arguing for an overall tighter monetary policy stance[1] which would have prevented a bubble from forming. When the bubble was in full inflation, they didn’t have a “policy solution which would make things better”, but this isn’t their fault (just as I remember losing my temper in 2004/5 with you personally because you kept asking for “constructive solutions” in Iraq).

[1] Which would obviously have been much easier to accomodate if we hadn’t been trying to finance the Iraq War, by the way.

“were arguing for an overall tighter monetary policy stance[1] *which would have prevented a bubble from forming*.”

It would have taken a dramatically tighter money policy to keep that particular bubble from forming, especially with all of the “everyone should own their own home” policy that was coming from both the left and the right at the time. And even then you haven’t demonstrated that it would have stopped the bubble from forming, as bubbles seem to be a pretty common occurrence in all sorts of different economic structures. This is especially true as the crisis in Europe is much less tied to the housing bubble and much more tied to other risky asset investments suggesting that there is something more to this than Americans and housing prices.

Now dramatically tighter monetary policy may have prevented the housing bubble, but at what cost? If approaching German levels of unemployment for a short period of time is indicative of a disaster in the US (and I would suggest that it is), would it be better to have had that all along for the past six years?

Maybe it would have been. But at least for unemployment, we haven’t even gotten to the point now where a dramatically tighter monetary policy would have had has for 5 or 6 years. So again, economics is about tradeoffs. And we should be rather more explicit about what they are don’t you think?

Thanks for an engaging read, everyone. Good comment thread.

Holbo: it was Arthur who said, “We’ll call it a draw,” not the Black Knight. Strikes me as probably the only time I’ll spot a miffed pop-culture reference in your posts…

Opportunity duly seized upon ;]

“Coming back to the original post, here at CT, just about all of our regular quasi-libertarian commenters has pulled the “inexact prediction” gambit. Sebastian was a late entry, but he completes the set I think.”

Maybe. I’m willing to give an “I was wrong, you were right” about Iraq. I’m not as willing to give an “I was wrong all the financial doomsayers were right” about the financial crisis. I was pretty worried about the housing bubble, that was clearly a bad thing (you even agree with Jane Galt from years ago on that) but I didn’t believe that it would cause problems nearly this big. So for the very few people who predicted that, they were right. For people who seem to think that this vindicates them on a whole range of leftist economic points, not so much.

It kind of depends on what you mean by decrying the deregulation kick. The problem with philosopical deregulation is the same as that with philosophical regulation: being dogmatic doesn’t get you good outcomes. Good regulation (mostly targeting transparency) can be greatly useful. Bad regulation (often dictating outcomes) isn’t. It depends on what stance you were taking when decrying the deregulation kick. If your point was that, yes overregulation can cause problems, but we are going too far because of X and it turns out that is somewhat related to the collapse (and it very well may be) then sure. But if your solutions were Sarbanes-Oxely type regulations I’m not as convinced that you really were anywhere near the real problems.

Of course, I’d hate to put the boiler company out of business after everything they’ve done for people like me over the years. I suppose that would be a regrettable, unintended consequence.