There is a strong tendency for authorities, when confronted with a problem, to opt for a quick-fix: banning whatever it is in question. Banning is an artificial, cosmetic solution which does not tackle the root cause. Hence, it tends to yield ineffective and often counter-productive outcomes.
In response to unhealthy eating habits in the playground, my school banished the ice-cream van (which sold lots of unhealthy snacks) from the school grounds. The school correctly identified the problem: teenagers forming bad habits. However, their response was wrong: it created a shadow market of schoolboys who sold the snacks at exorbitant mark-ups. Thus, banning the ice-cream van did not solve the issue and furthermore, meant that students were paying 80p for a doughnut that would normally cost 20p.
Parallels can be seen with the cocaine market. The consumption of cocaine is prohibited. Yet that has not solved the core problem: drug misuse. A black market has emerged where consumption of Class A drugs are still plentiful and drug users are susceptible to exploitation.
The parallel extends to the causes of the financial crisis: the bubble in the US sub-prime housing market. In an attempt to deal with the growing inequality, the Clinton and Bush administration decided to expand homeownership. By giving access to cheap credit to those who hitherto could not, they were fulfilling the American Dream. However, when interest raises rose and sub-prime homeowners defaulted, a financial crisis was triggered as inter-bank lending froze up because no one knew who held the toxic assets.
These examples illustrate that when authorities respond to a problem with an artificial, cosmetic solution, it is not effective. Its appeal is because it yields immediate benefits. In practice, it does not tackle the root cause (and hence, the problem persists) and it often creates undesirable, unintended consequences.
In response to unhealthy eating habits in the playground, my school banished the ice-cream van (which sold lots of unhealthy snacks) from the school grounds. The school correctly identified the problem: teenagers forming bad habits. However, their response was wrong: it created a shadow market of schoolboys who sold the snacks at exorbitant mark-ups. Thus, banning the ice-cream van did not solve the issue and furthermore, meant that students were paying 80p for a doughnut that would normally cost 20p.
Parallels can be seen with the cocaine market. The consumption of cocaine is prohibited. Yet that has not solved the core problem: drug misuse. A black market has emerged where consumption of Class A drugs are still plentiful and drug users are susceptible to exploitation.
The parallel extends to the causes of the financial crisis: the bubble in the US sub-prime housing market. In an attempt to deal with the growing inequality, the Clinton and Bush administration decided to expand homeownership. By giving access to cheap credit to those who hitherto could not, they were fulfilling the American Dream. However, when interest raises rose and sub-prime homeowners defaulted, a financial crisis was triggered as inter-bank lending froze up because no one knew who held the toxic assets.
These examples illustrate that when authorities respond to a problem with an artificial, cosmetic solution, it is not effective. Its appeal is because it yields immediate benefits. In practice, it does not tackle the root cause (and hence, the problem persists) and it often creates undesirable, unintended consequences.
