Definition of the day: the law of unintended consequences

Given the fact that the regulatory authorities in the U.S. and the UK have taken the unusually manipulative step of banning all short sales of financial institutions outright, it bears remembering that all actions have consequences, both intended and unintended.

My guess is that these actions will have greater unintended consequences than intended. What is the law of unintended consequences? Wikipedia explains.

The “law of unintended consequences” (also called the “law of unforeseen consequences“) states that any purposeful action will produce some unintended consequences. A classic example is a bypass — a road built to relieve traffic congestion on a congested road — that attracts new development and with it more traffic, resulting in two congested streets instead of one.

This maxim is not a scientific law; it is more in line with Murphy’s law as a warning against the hubristic belief that humans can fully control the world around them. Stated in other words, each cause has more than one effect, and these effects will invariably include at least one unforeseen side effect. The unintended side effect can potentially be more significant than any of the intended effects.


Unintended consequence – Wikipedia

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