There are ideas that twist in on themselves, involving paradoxes that trap weak minds.

The most interesting of these are memeplexes that (a) suggest actions or even full policies that (b) yield results that, in turn, (c) seem to bolster the ideas themselves, but which (d) actually logically undermine the ideas because the policy (e) artificially produces the effects of the memeplex itself.

My favorite example is the idea, common in the South before emancipation, that Africans were not capable of education and responsible living, so it was better (for their own good!) that they be slaves. This is the “natural slave” notion. The thing is, the allied act, or policy, was to prohibit slaves from being schooled, and prevent them, in general, from acting responsibly. This kept the enslaved African-Americans ignorant and unpracticed in the arts of living, thus “proving” that they were inferior to white masters and white freemen. But of course a moment’s thought should show the flaw in reasoning here. The evidence for inherent inferiority is artificially produced by the very acts that the thesis suggests. So what is proven is no natural inferiority, but an artificial one. A policy-driven one.

Keynesianism shows another such implicit paradox. Keynes argued that markets cannot equilibrate after a sudden deflationary shock because of “sticky wages,” that is, inelasticity of a factor of production, which naturally produces unemployment. But Keynes and his Keynesian acolytes did not attempt to remove any government policies that made wages inelastic — and as Sidney Webb privately cursed, there were indeed policies of unions and governments that very much did make wage rates inelastic. Instead, the Keynesians sought a workaround in fiscal (and later monetary) “stimulus” . . . that catered to the popularity of the prejudice for wage rate rigidity by placing the focus elsewhere, which in turn exacerbated the stickiness of wages, thereby “proving” that wages are naturally sticky.

(This was all something of a red herring for curing depressions, since the real problem after an unexpected deflation is sticky long-term loan rates, holding borrowers to terms that become increasingly difficult to pay off in the context of plummeting prices, as Irving Fisher so ably explained. But the Keynesian policies effectively distracted policymakers from reforming wage contract policy and thereby fueled evidence for the sticky wage rates.) 

What we see in these instances is

A. a theory about cause and effect that
B. by association of ideas (intuition) goes hand-in-hand with a policy or set of actions that
C. produces effects that seem to confirm the theory A.

My chief conjecture about this process is that people tend to develop notions like Theory A because such theories suggest Policy B, which is what they really are concerned with. Policy B does not, as intuited, offset the unpleasant or seemingly disvalued effects of Theory A, but instead reinforces them. Whether the “naturalness” of Policy B’s perverse effects are understood consciously by inattentive people (which has to be often the case, since in politics and government most people run on intuition, not reason and evidence).

The most common example of this process is in state aid policies. Here people theorize, for example, that discrimination and poor education and inadequate nutrition leads certain grouos of people to lag behind the average in productivity and economic success. That is the Theory A. Naturally, and not implausibly, since one does not like the effects of Theory A, one seeks to help people . . . through an extensive welfare state. That is Policy B. The problem is, Policy B provides sufferers of poverty (in this case) many disincentives to advance on their own. And the policy actually incentivizes people to ape behaviors that would trigger and even increase their subsidies, effectively taking them out of the market. Which is what we have seen, with the trendline in poverty sloping downward before the War on Poverty and leveling soon after the “War” commenced.

twv