First, what is a second order effect? I wanted to start this with one of those “Merriam-Webster defines second order effects as …” that you so often see in papers by freshmen in high school, but I refrained. Let’s start with a first order effect. This is the direct result of a change. Taking it one level deeper, a second order effect is the result of the direct result of the change. It is better explained by an example.
A new tax break is created to give an $8000 rebate to first time home buyers this year. A first order effect is that more people buy homes this year. A second order effect is that less people buy homes next year because so many just bought houses this year.
As you can see, the second order effect is often an overlooked consequence. Laws, rules, and regulations are often put in place to create a change in behavior. But what is the consequence of that change in behavior? All too often we lack the foresight to look this far into the future, but there also could potentially be third, fourth, or fifth order effects!
Title IX’s regulation of college sports is an example that jumps out in my mind. The intention was to make sure women and men have the same rights. One area most effected by this is collegiate sports – women and men must be equal in both athletic scholarships and the male-female ratio of athletes needs to match the schools student ratio. This is a tremendous first order effect – more women get to play sports and receive scholarships.
But unfortunately the school’s economic situation comes into play. Football is the only sport that makes money and there is not a women’s sport with an equivalent number of players. So if the school wants to have a football team, they will also have to have 5 women’s sports teams before they can even add another men’s sport. A second order effect is that schools are (economically) forced to drop some of the less common men’s sports teams. A third order effect may be that the sport loses popularity over time (wrestling is an example). Fourth order? How about we start losing the Olympic medal count to China because they train their athletic children to focus on a specific random sport. Fifth order? Communism wins.
What does this have to do with communism?
Absolutely nothing, that was a stretch. The point is, it is extremely hard to predict the result of a result of a result of an action. The consequences of the action may outweigh the benefit of the initial goal – this is why Republicans often vote for less government intervention – it’s not that they don’t want better healthcare, rather they believe the unintended consequences outweigh any improvement.