Stephen Dubner and Steven Levitt point out a number of cases in which well-intended government intervention backfires. (HT: Ann Althouse.) They thus put contemporary teeth into an old conservative maxim, the Law of Unintended Consequences, which states that the unintended consequences of an act or, especially, policy ultimately outweigh the intended consequences in importance. The ADA has actually harmed employment prospects for the disabled. (This one seemed obvious at the time; who would hire a disabled person if doing so opened up a virtually unlimited liability?) The Endangered Species Act actually leads people to destroy habitats before species can be listed. And so on.
As Roger Kimball observes, that’s the central problem with socialism. The socialist seeks to intervene in the economy to help the poor and promote distributive justice. The result, almost invariably, is that the poor are worse off, there are more of them, and justice is defined to be whatever the socialist system actually produces. Government intervention in the economy can reduce inequality, but only by impoverishing everyone.
That’s not to say that the free market always finds the optimal outcome. It doesn’t. But we have no reason to think that we can do better. Policies intended to improve on market outcomes generally do far worse than what they are trying to replace.