The Seen And The Unseen

More that 150 years ago, Fredrich Bastiat wrote a seminal treatise on economics discussing the seen and unseen costs of market regulation. Despite the passage of time, it’s clear that we have not learned Bastiat’s lesson. Government regulates the economy without any regard to what impact it is truly having on the market. Nonetheless, there are those who understand, most notable among them being George Mason University Economics Professor Walter Williams, who, as usual, puts Bastiat’s message in common sense language:



How about Congress’ mandate for more fuel-efficient cars? According to a National Research Council of the National Academies of Sciences 2002 report, delivered by Leonard Evans to the Washington-based Competitive Enterprise Institute, Corporate Average Fuel Economy (CAFE) standards have contributed to between 1,300 and 2,600 traffic deaths a year.

Congress’ mandate for higher gasoline mileage leads to the production of lighter, smaller and less crashworthy cars, resulting in unnecessary deaths. Through technological innovation and natural market forces, cars were already becoming more fuel efficient before CAFE standards were mandated. More important, how does Congress know this loss of life is worth the amount of fuel saved? Do they even know or care about the tradeoff?

As usual, Williams speaks common sense to power. Well worth reading.

  • IndianCowboy

    eh, that’s not the only problem with CAFE standards. As a conservationist I view them much as I view Kyoto. Feel good legislation without true purpose. In fact, both Kyoto and CAFE are counterproductive.