Everyone has a large number of great theories or ideas. Here’s one that I have: Wouldn’t it be great if all of the money that each person generated was split up and distributed evenly across all of the members of their family and community? That would increase a feeling of connection and camaraderie, and reduce the burden that each member of the community would need to bear. Sounds good, doesn’t it?

The only problem is that it ignores all practical experience and knowledge about how people actually behave. People are motivated by status and material gain and, if they don’t receive the full fruits of their labors, they’re not going to work as hard or produce as high quality work. Thus, if all money were distributed, there would be less wealth creation and a general feeling of malaise and discontent in the community. Why the malaise? Because we gain a great deal of our self-regard and meaning from a job well done. There are very few couch potatoes that are as happy and content as an Elon Musk or an elementary school teacher. This is simple common sense, something that everyone outside of a small sliver of pie-in-the-sky academia knows. It’s what I call grandma wisdom: something so long and universally known that even your grandma could tell you about it.

However, imagined scenarios are rarely, if ever, at full fidelity, and so a lot of important information is left out of these utopian fantasies. For example, these visions never spell out how likely it is that the parties in question will conform to the scheme in question, and they never opine on how the changed incentive structure will cause the behavior of the actors to change – which often nullifies the desired result.

A wonderful illustration of this error in thinking can be seen with former New York Mayor Bloomberg’s proposed soda ban. He wanted to decrease the amount of sugar that individuals in New York could drink, so he pushed to ban sodas above a certain size. The thinking was as follows: If people are not able to purchase 16oz+ drinks, they will purchase 12oz drinks, thus consuming 50 fewer calories at mealtime. The “problem”, however, is that people are not simple automatons that mindlessly execute the same behavioral script over and over – they change according to new wants, needs, and conditions. 16 ounce sodas are no longer available? Okay. I’ll purchase two 12 ounce sodas instead. Thus, instead of diminishing the grams of sugar that individuals would purchase and consume, this law would have the perverse effect of increasing the sugar calories consumed.

Impractical thinking like this wouldn’t be a problem if these fantasies were locked in the heads of their creators. The problem is that the creators take them seriously, and often try to translate these ruminations into reality, which almost always results in disaster. The 20th century is a monument to the danger of theoretical utopian thinking, and the world is 100,000,000 people poorer today because of it. The attempts of optimistic leaders to jam Communism down the throats of their peoples should be a lesson and a warning for us all: human nature doesn’t conform to the shape of the container into which it’s forced. Instead, it either perishes or revolts with disastrous consequences.

Image: Anthony Easton