Don’t Trust Government To Protect Your Privacy

In a tale of questionable historical validity, the British colonial government in early 20th century India found itself confronting a fearsome pest: cobras. Though natives had long since adjusted to uneasy coexistence with the snakes, the occupying force did not take kindly to their ubiquitous presence. Seeking their eradication, authorities devised a bounty program to financially reward anyone presenting a severed cobra tail.
The program worked. Which is to say it precipitated a significant increase in severed cobra tails – the only thing the prize was truly capable of incentivizing – while also presenting enterprising individuals with a profitable opportunity: snake-breeding. Snakes need their tails neither to live, nor to reproduce, enabling a single snake to generate a stream of tails by way of countless progeny. The program had transformed the vipers into a financial instrument that would continue yielding ‘payments’ as long as the snake could reproduce.
Confronted with abysmal failure – snakes (many tail-less) were slithering through the streets in greater numbers than before the bounty project – the authorities abandoned the scheme. The dissolution of the program encouraged snake-breeders to release their now-worthless assets into the wild, where they quickly found their way back into the city. The infamous results, now known as the ‘cobra effect,’ depict those government interventions which generate more than the ‘garden variety’ unintended consequence. While virtually all government interventions have some unintended consequences, a few positively engender the thing they were enacted to counter.
Policymakers have spawned the ‘cobra effect’ in a host of other contexts, including an attempt to stamp out sewer rats in colonial Vietnam and a recent effort to decimate a feral pig population at Fort Benning, Georgia. In both cases, the bounty program incentivized fraud and a swift burgeoning of the pest populations.

This post was published at Ludwig von Mises Institute on Sept 14, 2017.