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The Law of Unintended Consequences and Plastic Bag Levy

Originally posted Friday 29th Nov 2013

Sir Isaac Newton, a maths and physics genius, widely regarded as one of history’s leading scientists, proclaimed in one of his Laws of Motion that for every action there is an equal and opposite reaction. In the world of physics, this is an observable and predictable phenomenon. In the world of human interactions, a phenomenon exists that is a rough analogy to Newton’s Third Law; given the fact it deals with the complexity of human thought, however, it produces results far less predictable and well defined.

The Law of Unintended Consequences

Plastic Bag Levy

The law of unintended consequences has been understood in principle for centuries, but it was not until the twentieth century that it was even given a name or studied in a systematic way. American sociologist Robert K. Merton was the first to do so in 1936. In general, this law states that human action — especially action taken by government in the form of laws — will almost without exception produce side effects that are not anticipated and are often contrary to the intent of the original action taken.

There is an irony involved in all of this. It seems that social scientists and economists have been aware of the law of unintended consequences — at least as a general theory — for centuries. But those most able to set this law into motion, politicians, and those most affected by its consequences, the general population, continue to ignore it.

The theory of actions having unintended consequences can be placed at least as far back as the eighteenth century. Adam Smith, the Scottish pioneer of economic political thought, cited an ‘invisible hand’ at work in economic activity. In short, he recognised that people acting in their own economic interest would produce the side effect of bettering the lives of others through the services they provide in the course of making a living.

Adam Smith’s observation highlights the positive side of the law of unintended consequences. More often, however, the law can be used to explain unforeseen, detrimental effects of laws and government regulations. In many cases, these perverse results are a due to people’s efforts to circumvent regulation — the unseen or unanticipated factor — and produce side effects exactly the opposite of the law’s anticipated effect. The political arena can be a fertile ground for setting this law in motion since actions are often taken out of a sense of urgency for political purpose, so much so that the possibility of any unintended consequences is wilfully ignored.

Examples of government regulation producing perverse results are plentiful. Consumers can see price controls as a benefit, but if the controlled price is too low, producers leave the market and product shortages ensue. Government licensing of tradesmen can reduce the number of service providers such that the availability of services decrease and its price increases. Even worse, this may lead consumers to attempt certain types of dangerous work on their own.

A classic example of unintended consequences comes from the prohibition of alcohol in the United States in the 1920s. This drove legitimate producers out of business while consolidating control of an illicit alcohol trade into the hands of increasingly well-funded organised crime syndicates. Human attempts at altering ecological balance can have unintended consequences as well, as it seems even the animal kingdom observes this law. There is no shortage of examples in which the introduction of new predators to a locale resulted in the unforeseen creation of a new pest.

A current example of a law that will likely produce similar unintended consequences is the 5p levy on plastic carrier bags proposed by Nick Clegg that is slated to begin in 2015. This attempt to take another step towards ridding the world of another supposed scourge has already been tried in Ireland, where retailers were required to charge 15p per bag. Consumers indeed used fewer of the plastic bags issued by retailers, but the sales of plastic refuse bags and bin liners shot up by 400 percent as consumers figured out a more economical means of carrying home their purchased goods.

In theory, plastic grocery bags are supposed to be replaced with those reusable canvas totes, thus cutting down on plastic waste. But now, it turns out, the canvas totes are being cited as a potential health risk by Aberdeen University’s Hugh Pennington, a professor of bacteriology and one of  Britain’s leading food scientists. It seems that when these bags are used to carry meat — even meat that is wrapped — they tend to harbour dangerous bacteria that can increase the risk of food poisoning when the bags are reused. The law of unintended consequences strikes again.

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We have seen how the Law of Unintended Consequences has come to play on the single-use, carrier bag levy (5p per bag as we speak). In the short term, it’s been welcomed by most shoppers but has received sceptical approval from environmentalists who say it doesn’t go far enough. Nevertheless, use of plastic bags has dropped dramatically all over the UK with nine in 10 shoppers in England switching to using their own bags.

However, canny shoppers aiming to avoid paying the tax have resorted to other measures. Major supermarkets have been stocking up on wire baskets in anticipation of them being stolen. One Scottish branch of Tesco was left with only 16 baskets following the introduction of the levy, while Asda fitted security tags to baskets to stop theft at a cost of up to £4 each. Meanwhile, sales of bin bags have increased by around 40%.

A total plastic bag ban would encourage customers to use paper or reusable cotton bags but again there are consequences. According to one study, paper bags can lead to greater landfill waste as experienced in San Francisco and Austin, Texas. Shoppers there began disposing more heavy-duty reusable bags.

Reusable cotton bags, on the other hand, come with there own set of consequences. In short, they can harbour bacteria including harmful coliform strains. So, you need to wash your cotton bags regularly to prevent bacteria build-up. Over time, this is an environmental cost you might not consider. But, think of all the hot water and washing machine energy consumption and it soon puts everything in perspective.

From a retailer’s point of view the consequential price might be felt through their tills if shoppers move to small local shops which don’t incur the levy, or shop with their regular supermarket online, as retailers can deliver groceries direct to your door without having to use bags.

For carrier bag manufacturers, suppliers and distributors, the consequences can be dire, as illustrated by one Lancashire which went bust with the loss of 40 jobs. Read the story here

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