Tomatoes

Tomatoes, Health Care and Unintended Consequences

Jun 30, 2012 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Debates, Economic History, Economic Thinkers, Labor, Macroeconomic Measurement, Regulation, Thinking Economically, Uncategorized • 129 Views    No Comments

Trying to make pretty tomatoes, plant breeders inadvertently created a tasteless fruit.

It all started 70 years ago with a gene mutation that evenly ripened tomatoes. Seeing the commercial potential of uniformly colored bright red tomatoes, growers bred the gene into most of their crop. Scientists recently discovered though that the same gene that perfectly ripens tomatoes also diminishes their sugar content and fragrance.

This tomato story started me thinking about other unintended consequences.

In France, one extra worker can mean that a firm needs to create worker councils, establish profit sharing, and report to employee representatives when firing people for economic reasons. But, that worker has to be #50. Similarly, the Affordable Care Act requires that firms with the equivalent of 50 or more full-time employees will have to offer health insurance or pay a penalty. In France there are more than twice as many firms with 49 employees as with 50. Will the Affordable Care Act have a similar unintended consequence?

And finally, one last unintended consequence from Adam Smith:

“It is not from the benevolence of the butcher, or the baker, that we expect our dinner,” Smith wrote, “but from regard to their own self interest.” And yet, jobs are created, goods and services are produced, wants and needs are satisfied, and economic growth results.

More in Econlife about the unintended consequence of French regulations is here and about tomatoes, here and here.

 

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