How the 'Unintended Consequences' Story Promotes Unjust Intent and Impact
27 Pages Posted: 23 May 2011
Date Written: 2011
In the guise of critical analysis of the limits of law reform, the familiar phrase “unintended consequences” serves to rationalize rising inequality and to undermine democratic accountability. This paper examines how the phrase promotes a story of disentitlement, using the recent financial crisis as an example. By naturalizing inequality as power beyond law’s reach, this phrase’s message that benign law is likely to bring unequal consequences dovetails with a seemingly contradictory message that benign intent, rather than harmful impact, is what primarily counts for evaluating inequality.
As part of a LatCrit XV symposium taking a “bottom-up” view of the recent economic downturn, this paper links the recent crisis to longstanding colonial and neoliberal policies facilitating upward redistribution and plundering of natural resource wealth in developing nations. Here, the global financial industry tapped the home equity cultivated by large numbers of middle-income or working class Americans. Capitalizing on the vulnerability of many homeowners in a context of growing economic insecurity and inequality, the financial industry used pervasive fraud to sell unsound mortgages that produced enormous short-term gain for financial industry owners and managers. Then as this debt collapsed, government protected much of the financial industry from the harmful results, while imposing austerity policies on those in the middle or bottom, particularly communities of color.
“Unintended consequences” narratives have served to detract attention from democratic debates about the moral and political intent of the policies causing and responding to the financial crisis. First, the phrase presents harmful results as the result of inevitable technical challenges to implementing widely supported principles, obscuring the contested interests and ideologies behind recent monetary and regulatory policy, for example. Second, the phrase helps excuse intentional wrongdoing, including financial industry criminal activity, by recasting refusal to enforce or comply with the law as a normal and natural response to incentives. Third, the phrase helps invert harmful intent, making those with the least legal and economic power appear to have the most suspect interests and values. By attributing benign intent to policies of inequality, any resulting harm appears to be the fault of those most harmed, rather than those who gain at their expense. Finally, the “unintended consequences” theory conveys a false sense of inevitability to harmful policies, evading analysis of alternative policy choices with better results.
Keywords: unintended consequences, economic inequality, neoliberalism, financial crisis, race, critical legal studies, critical race theory, LatCrit, regulation, legal theory, austerity, debt, equality
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