Success Principle #15 - Unintended Consequences
June 29, 2007
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Everything choice we make has consequences. And the place we find ourselves in life is simply a direct result of all the choices we’ve made, large or small, added together.
Successful people realize this fact and strive to make their choices wisely.
Many other people instead choose to ignore the cause and effect relationship of their choices and look for something or someone that they can blame for the circumstances they find themselves in. Until they realize that all of us do in fact have choices and that they can start making different choices, their circumstances are unlikely to change.
Unintended Consequences
But here’s the thing. Not all of the consequences of our choices are what we might expect. There are times when unintended consequences might result from our choices.
None of the decisions we make happen in a vacuum. Every choice we make in some way, large or small, affects those around us. And it is quite possible that there might even be a ripple effect of those choices that end up affecting a whole lot of folks.
This principle of unintended consequences is especially evident when governments make policy decisions and change laws for very large groups of people.
Ethanol and Corn - Unintended Consequences in Action
Let’s take a look at an example of this that’s happening right now.
The good Idea
Here in the US laws have recently been changed to require more ethanol usage in the fuels for our automobiles. On the surface it is a very sensible change. There’s some great benefits.
- Renewable energy source
- Cleaner burning fuel
- Fewer greenhouse gases
- Reduced dependency on foreign oil
Sounds like a good idea. Who wouldn’t be in favor of seeing that happen? I know I’d like to see all that and more.
Trouble is, we are running smack into the principle of unintended consequences with this one.
Turns out the only viable source of ethanol at the moment comes from corn.
Shouldn’t be much of a problem, right? I mean the US is the larges corn producer in the world. Our output is measured in hundreds of millions of metric tons. That’s a lot of corn!
The Unintended Consequences
But. We supply much of the world with their corn as one of the largest corn exporting countries. Now that a larger portion of our corn is being diverted from feeding people to fueling cars, people in some parts of the world are starting to feel the pinch at the table.
For example, they are now seeing serious corn shortages in Mexico, Guatemala and the Philippines.
There are feedstock shortages in China.
The US might even be headed for a food shortage itself. Part of the reason for that may be that we are already seeing a corn seed shortage, and the laws don’t come into full effect for another 5 years!
Or maybe it is because farm land prices are on the rise and are keeping new farmers out of that line of work.
Of course we all know that our rising fuel cost is directly related to these new governmental requirements.
But did you know that corn prices factor into the cost of a wide range of food sources from eggs, milk and cheese, to chicken, pork and beef? We’re already on our way to increasing world hunger for our ethanol.
Not only that, but I’m in the transportation industry and I’m here to tell you that these higher fuel costs affect every singly segment of our economy. Think about it. Everything you see on your local Wal-mart or grocer’s shelf got there via truck. Don’t be fooled. The higher fuel costs to run that truck are already coming out of your pocket. In the form of higher prices on the shelves.
Summary
So what we have is a great idea to force cleaner, renewable fuels having the unintended consequence of causing huge problems which will likely at a minimum cause more starvation around the world.
In hind sight, was it a good decision by the government?
Applying the Principle Ourselves
Does the principle of unintended consequences mean we should never strive to achieve high goals for fear of causing some horrible things to happen around us?
Of course not.
We can however take the time to think through the long term ramifications of our decisions. The bigger the decision, the more thought that should go into it. In our personal lives that means we should weigh out very carefully the major decisions.
How will this affect people around me?
What will this decision allow to happen?
Which things will no longer be available to me anymore by making this choice?
Successful people think through their decisions. By asking tons of questions, and considering the possible consequences of our decisions, we can better manage those unintended consequences.
And we’ll be more successful in the process.
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Tags: Misc, Principles, Corn, Ethanol, Success, SuccessCREEations, Unintended Consequences
Chris,
The ethanol debacle is the most craven act of self-interested manipulation in many years. Heck, you’d probably have to go back to the DDT ban to find something where we sacrificed the real good of so many for the expedience of a few.
I will add ONE data point to the fine ones you’ve made already. In Iowa, you don’t HAVE to have ethanol blended into your gas. In fact, the ethanol blend is priced LOWER than straight gas to get people to buy it. What does THAT tell you about producers’ belief in their product?
Mike
Mike, Do you think the price is lower because there is so much stinking corn in Iowa?
Seriously though, I’m guessing people still aren’t buying into the fuel source yet for some reason in spite of the Government intervention. Why do you suppose that is?
Chris,
My daughters probably have never smelled unadditived gas, but you remember it. And you probably remember when they first started mix-ins and thinking “that just don’t smell right!” And your gut reaction was spot on.
Anyway, I think the price is lower in Iowa because, given a choice, people go with their gut (and nose).
I don’t think you have to go any farther in analyzing why people aren’t buying into it. Yet there may also be an subconscious questioning of “there are hungry people all over the world; is the right answer to our energy problems performing unnatural acts to our food supply?”
If we’re going to throw money at the problem, spend it to tap the biomass in our landfills and end tariffs on Brazilian sugar (which is a cheaper source of ethanol). Wait. What’s that you say, Senator? We can’t do that because it won’t get you votes in the Iowa primary? Oh, right. Maybe THAT’S why people aren’t jumping on the bandwagon. The whole idea fails the sniff test on multiple levels!
Mike
So they’ll potentially starve millions for a few thousand more votes? In a primary?
I’m a little on the cynical side but that’s too much for me to swallow. I would hope it is more of a lack of understanding of the world corn market.
Ignorant sounds so much better to me than evil.
Spot on about the need for us to try to see the long term consequences of our actions and decisions. If we looked past tomorrow when taking action, we wouldn’t be in the situation we are in now. And I’m also in complete agreement with corn not being the best feedstock for ethanol. One of the easiest, yes. Best, no.
Even with the consequences, I would rather see a turn away from capital energy sources such as oil to income energy sources such as corn and other vegetation - including algae, which has been sadly neglected, and in the long run I think would be much more productive.
Blaming the use of corn for energy for world starvation is a bit much, though. While corn products can be found in almost all the food we eat, much of it is in the form of corn syrup for sugar and corn oil. Both of these can be replaced by other sources. Much of the rest of the corn we grow is used for animal feed. Many more people can be supported on a vegetarian diet than on a meat-centered diet.
I don’t feel bad for China. China has farmed the same land for 4000 years, but has managed to destroy a quarter of its farmland since the Maoists took over.
Long term, I just don’t see it being productive to blame the US for world hunger, any more than it is productive to blame the US for global warming or the unstable world situation.
Good points, Rick. I especially like the idea of turning algae into fuel.
But to say that we aren’t contributing the cause of world hunger by burning a primary staple food source simply because “they could eat something else” is a bit like having no sympathy for people in a drought caused famine, “well they could move somewhere else.” It seems a little heartless on the face of it.
I agree that people around the world can change their diets. However finding suitable, similar cost food sources takes time.
Keep in mind that every time food gets more expensive in the world, it gets just that much further out of reach for some parts of the world’s population. That’s something the bureaucrats here seem to have overlooked. Go figure.
I don’t know whether it’s productive or not to point out the correlation. It sure is uncomfortable.
But hey, we can just keep trucking along and pretend it’s not our fault. “Let them eat cake.”
I do understand your point that making fuel from corn will drive up grain prices and make it harder for poor people to afford.
I didn’t mean to seem heartless, Chris. Most corn isn’t used for direct food for human consumption. Look here and you’ll see that over half of the US corn crop is used for animal feed. Less than 2% is used directly for food, and less than 9% in human food products. Less than 20% is exported. In talking about dietary changes, I think more about Americans than most other populations. I eat meat. I have no desire to cut out meat completely. But decreasing it’s usage would free up a lot of grain for human consumption.
I had better be quiet. The next thing you know I’ll be starting a political blog again, then I’ll get high blood pressue, then I’ll have to start on medication for that, then I’ll be raising the cost of health care even higher than I have already raised it.
I know you’re not heartless, Rick. Sometimes the implications of what we think may seem that way from another perspective.
Here are some implications of the stats you mention. Because so much corn is used indirectly in other segments of our food supply the costs of those food sources is going up too.
Also we feed many millions of the world’s people with that 20%. And that’s the 20% that is being hardest hit by the huge upswing in ethanol demand. As a wealthier nation, we can afford to pay more for our corn than the underdeveloped countries who have historically relied on our exports.
Therefore our corn exports are falling off dramatically, hence the increase in world hunger that we’re facing.
Related to what you’re saying - there’s an article in April’s Chesapeake Bay Journal that talks about this issue. It seems the amount of corn it takes to fill a 25 gallon tank can feed 1 person for a year. In the meantime, while corn production is supposed to increase by 16%, corn exports are supposed to decrease by 14%, and, as you’ve shown, the price will be higher.
And that doesn’t even get into the 8 or 9 gallons of water it takes to make each gallon of ethanol. But at least that problem doesn’t seem to have any short term negative affects out side the US so far.
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