Although it is not our task to define the notion of ‘social phenomena’, it is obvi- ously necessary to have a rough understanding of what is meant by ‘social phe- nomena’ to understand unintended social consequences. Indeed, a common sense understanding of it would do. Institutions, conventions, norms, coded rules of the society, etc. are all social phenomena. In Table 2.2 S-consequence represents such phenomena. But it also represents what we may call macro-social structures, that is, the properties of a collection of individuals or the ‘things’ that are produced by many individuals, such as the aggregate statistics of the society. At first glance, social institutions and social statistics may seem like two distinct categories that should not be handled together. However, the two are not so distinct. In order to see this let us examine the distinction between the two levels that were used above, specifically, the distinction between the individual level and social level.
At the individual or microlevel we observe individual agents acting independ- ently from, or interdependently with, other individuals. The relevant variables here are the individual characteristics of the agents, their actions, their strategies, etc. in isolation, and not the characteristics of a collection of individuals, or what may come about from their interactions. We consider the latter as belonging to the social level. At the social level we have characteristics of a collection of individu- als, the collective or aggregate consequences of their actions, etc. For example, while we consider the shopping decisions of an individual, his actions at the mar- ketplace, etc. as belonging to the individual level, we consider the aggregate level of prices, which is a consequence of many individuals’ shopping behaviour, as belonging to the social level. Or, the housing decision of one individual is at the individual level, but the residential distribution of different types of individuals (e.g. according to age, sex, income) in a city is at the social level. Quite simply, properties of social phenomena (social level) cannot be attributed to single indi- viduals (individual level).
Take the classic example of money. Apparently valueless coins and papers are considered as a medium of exchange or as a store of value by the collective belief of individuals, thus ‘money’ is a social phenomenon (i.e. we consider it to belong to the social level). On the other hand, one single individual who believes that certain coins and papers can be used as a medium of exchange belongs to the individual level. His belief alone cannot make those coins and papers ‘money’. If, and only if, there are other individuals who share the same belief, we can talk about money.
Now, consider ethnically segregated city patterns. When we look at a city and how different ethnic groups are distributed in the city we may see whether there is segregation or not. Segregation is a property of a city, a collection of individuals living close to each other and for this reason we consider it as belonging to the social level. We cannot find out whether there is segregation or not by examin- ing single individuals and their properties, we have to look at them from above, we have to consider a collection of individuals to observe the phenomenon of segregation. Thus, one individual’s housing decision, and her properties, belong to the individual level. Segregation, on the other hand, is a social phenomenon, by our definition.
Similarly, inflation, level of unemployment in a country, rates of interests, characteristics of a group, behavioural regularities in a society, etc. fall under our definition of ‘social phenomena’. This is, of course, not a fully developed defini- tion of the social, yet it is consistent with many accounts of ‘social phenomena’. For example, Finn Collin defines ‘social’ as follows:
‘Social’ here simply means collective: a phenomenon counts as social if it involves a plurality of human agents whose actions or plans are somehow mutually related.
(Collin 1997: 5, emphasis added)
Given our definition of the social level, what are the properties of an invisible- hand consequence? First of all, it necessitates a multiplicity of individual agents. One individual may change or bring about social phenomena: for example, a dictator may force the segregated individuals in the city to move and thereby bring about an integrated city. Government intervention into the economy may be considered in a similar way. Yet, although one or a couple of individuals may be enough to change or bring about social phenomena, social consequences are always mediated through a multiplicity of individuals. In the first case, many indi- viduals are moved by force to other houses. In the case of a government policy to decrease inflation the expected consequence (low inflation) can only be achieved if the individual agents in the economy give the ‘right’ responses to the policy. Simply put, social consequences are mediated through a multiplicity of individu- als. It does not matter whether the social consequence was intended or not (or whether it was designed or not); it involves a multiplicity of individuals.
To sum up, an unintended social consequence has the following important characteristics:
- The consequence is located at the social level (or, it is a social consequence).
- Consequence was not intended by any individual.
- It is mediated through a multiplicity of individuals.
Yet, our focus is on unintended social consequences that were brought about by individuals who were not intending to change or bring about social conse- quences – that is, we are concerned with the first row in our table. Thus, we may add the following condition:
- Individual intentions are directed to the individual level.
This condition excludes unintended social consequences that were brought about by actions of individuals (or of an individual) who were intending to bring about social consequences. Thus, condition 4 is the first step to differentiate invisible- hand consequences from unintended social consequences.
Some unintended consequences that satisfy conditions 1, 2, 3 and 4 may not be considered as invisible-hand consequences. We may think about the following possibility: could the action(s) of one individual who does not intend to bring about social consequences bring about social consequences? Since human be- ings live in a society this seems to be a possibility. I may fail to recognise that my actions may bring about social consequences. That is, although I may think that my actions would have no consequences at the social level, this may not be true. An example of this appeared in Radio Netherlands. I will adapt the story as follows: a filmmaker goes to a former colony of a country with the intention to shoot a documentary about the culture of the residents. He learns that before the colonisation, these people were cannibals but they were forced to stop this prac- tice. Willing to include scenes of cannibalism, he asks the locals to reconstruct their headhunting rituals for the cameras. However, the locals, once forbidden to perform such rituals, interpret this request as a permission to return back to their old practice of cannibalism and radically change their behaviour after this incident. In this example, a single individual brings about a social consequence, although he was not intending to do so. Although this may seem to be an extreme case, it alerts us to the possibility that a single individual’s intentions directed to the individual level might bring about unintended social consequences. Proposed examples of the invisible-hand mechanism (e.g. paradigmatic examples of invis- ible hand explanations) do not indicate such cases. To exclude these, we may add the following condition:
- The action of one individual is not sufficient to produce the unintended (social) consequence.
Conditions above do not exclude cases where many individuals collectively act in a similar manner. Since the invisible hand does not imply collective behaviour, we may add the following condition:
- Individuals do not pursue the same end collectively (that is, collective intentionality is excluded).
Note that this does not out rule the cases where individuals pursue the same end independently – that is, without a collective decision to do so. We ruled out unin- tended social consequences of a single individual’s actions and unintended social consequences of collective action. Given the above conditions, the only way that an unintended social consequence may be generated is through multiplicity of individuals with intentions directed to the individual level. Invisible-hand conse- quences are defined as the set of unintended consequences implied by the condi- tions 1 to 6. This book focuses on the models and explanations concerning the set of unintended consequences as described by these conditions.
Lastly, we have to distinguish between ‘unintended’ and ‘unanticipated’ and release our assumption that unintended consequences were equivalent to un- anticipated consequences. It seems reasonable to think that if a consequence is unanticipated it should be unintended, and vice versa. But this is not the case. First of all, an unanticipated consequence might be intended. For example, when I buy a lottery ticket I intend to win (or intend to increase my chances of win- ning) the lottery. However, I do not anticipate that I will win. If I win, this would be an unanticipated intended consequence. Second, an anticipated consequence may be unintended. For example, when I take a shortcut through a public green field, I may anticipate that if others do the same, the plants may be irrecover- ably damaged. Yet, I do not intend to bring about this consequence when I take the shortcut – I may be ignorant about other people’s behaviour and about the final consequence. Or, when someone drives home, despite the fact that he has consumed three glasses of whisky, he may anticipate that if things go wrong he may end up at the police station. However, this is not his intention to do so. He is simply intending to go home by means of taking the risk of being stopped by the traffic police. Thus, in some cases we may have unintended but anticipated consequences. Invisible-hand consequences may be anticipated or unanticipated.
Source: Aydinonat N. Emrah (2008), The Invisible Hand in Economics: How Economists Explain Unintended Social Consequences, Routledge; 1st edition.