In the study of economics, the definition of the term “incentive” is cut and dry and can be defined as any motivation for a person to take a certain action. Incentives drive everything from how much a person must be paid to show up for a job to a rise in the price of goods deterring certain people from buying said goods.
Because the state is largely economically illiterate and does not have to play by the rules of the market which are driven by these incentives, they will often times create negative or distorted incentives. One glaring example of a negative incentive is when the state removes all liability from a pharmaceutical company — thereby removing the incentive for the pharmaceutical company to prioritize safety when creating a product.
When incentives have unintended or undesirable effects, contrary to the intentions of its designers, this is known as a “perverse incentive.” Perhaps the most popular example of a perverse incentive is called the “cobra effect.”
Economist Horst Siebert coined the effect based on an occurrence during Britain’s occupation of India. The British government wanted to reduce the number of cobra snakes in Delhi and offered their subjects a bounty for every dead cobra they brought in. At first, large numbers of the snakes were brought in but as numbers dwindled, enterprising individuals began breeding cobras for the income.
When the state became aware of citizens breeding snakes it ended the incentive for breeders to have them, which in turn led to the opposite effect of the original incentive. Instead of reducing the population, when breeders freed their now-worthless snakes, the cobra population increased in Delhi.
We are now watching a similar situation unfold in the West as governments implement “gun buyback” programs. Over the weekend, city and county officials in Houston, Texas held a widely publicized gun buyback — touted as a way to reduce violent crime.
Folks who turned in their guns received gift cards worth anywhere from $50 to $200, depending on the type of firearm. Photos from the event showed that many of the weapons were old and broken firearms, likely only turned in to receive a gift card.
While this was bad enough, the “cobra effect” unfolded in a massive way when someone dropped off a box of 62 “handguns” in exchange for $150 gift cards for each one. This person made close to $10,000 for the box of “handguns.”
There was only one problem, however, and it was that these “handguns” were actually 3D-printed uppers, lowers, and outdated “liberator” guns from 2013. In essence, this person started their own cobra farm and sold the state farmed cobras.
Authorities — without even realizing it — had created their own perverse incentive and attracted 3D-printed guns and parts from all over the country. They also spent $100,000 of taxpayer dollars to pay folks for broken shotguns, non-functioning rifles, and rusted out pistols.
There are likely 3D printer “cobra farms” across the country now running 24 hours a day, printing similar “ghost guns” to cash in on the state’s perverse incentive.
On top of the 3D-printer debacle, there is also another perverse incentive with this gun buyback as well. Because the guns were bought back with no questions asked — entirely anonymously — a perverse incentive for theft was also created. Being that you can’t pawn a stolen gun, all you needed to do was steal your neighbor’s pistol to get a $200 gift card from the state — no questions asked.
It’s reasons like these that have criminological experts speaking out about the sheer waste of taxpayer money associated with the buyback programs. Not only do gun buybacks create perverse incentives, but there have been studies showing that buyback programs can actually increase crime.
The National Bureau of Economic Research published a working paper in May exploring the relationship with crime and buybacks and they actually found an increase in incidents of firearm-related crime during the first two months after a buyback.
The working paper also found no evidence the programs reduce suicides or homicides where a firearm was involved.
“These results call into question the efficacy of city gun buyback programs in their current form,” the authors wrote in the abstract. Indeed.
Because there is a negative incentive for criminals to turn in their guns — making it harder to commit crimes — the guns aren’t coming out of the hands of criminals. Instead, they are being “farmed” like in the example above, they are being stolen, or old non-functioning weapons are being cleaned out of people’s homes in exchange for taxpayer money.
Even if the state were to force individuals to turn in their weapons at a gun buyback — like Canada is now doing — exactly zero criminals will surrender their weapons, working toward the horrific end game in which only cops and criminals have guns.
Article posted with permission from Matt Agorist
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