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Hunters afraid of infected deer (animals with the wilderness equivalent of "mad cow disease", aka BSE) are going to stay home this season and thereby cost Wisconsin businesses a third of a billion dollars. Lost tourism post-9/11 has cost New York City a billion dollars. Baltimore-Washington's failure to host the Olympic Games will cost the region five billion dollars. All these items, and countless others of the same ilk, have appeared in the newspapers during the past few days.

Add up enough such reports and soon the entire world economy will vanish --- or rather, the fallacy will become obvious. Nothing is really lost. Goods and services are just flowing in different directions, down less obvious paths, along routes which aren't as easily labeled and recognized. Millions of extra transactions will take place in local stores, in thousands of communities, rather than in a few central sites. Resources are reallocated in order to maximize perceived utility. That's called change, and it is not necessarily a bad thing.

What's dangerous is when "victims" of economic change take over the mechanisms of government in order to recapture what they have "lost". Their suffering is visible, easy to dramatize, hard for a politician to ignore. The costs they inflict are spread broadly --- a few pennies of extra taxes on everybody else, not enough to be worth the postage stamp on a letter to one's Congressman. So more and more industries, and groups of people, try to play the same game ... and society pays for it through lowered productivity. Invisible inefficiency and inflexibility ... and nobody knows why.

(see also CelebrityHistory (8 May 1999), BasementWorries (15 June 2002), ...)

TopicEconomics - TopicSociety - Datetag20020905

(correlates: HighGlider, AlphabeticSelfdescription, JudyReWilderness, ...)