ECON 101: The Law of Unintended Consequences. China Eyes Russian Farmlands in Food Push
If you are looking for the next big asset bubble, this might be it.
Thank you FED, Helicopter Ben, ethanol, Central Bankers and Farm Lobby. I might have to CANX my Ag business underperforms. Of course, people actually will fight and die for food, there were very few causualties from the NASDAQ Bubble and housing bubble. This could make for some very interesting news and opportunities.
Russia Today: May 11, 2008
China eyes Russian farmlands in food push
Chinese companies will be encouraged to buy, or take on lease, farmlands abroad to help guarantee food security, under a plan being considered by Beijing. The move comes amid a food crisis in China. China has about 40 per cent of the world’s farmers, but just 9 per cent of the world’s arable land.
Africa and South America are among the most likely directions. Russia’s also in the list. However, according to the country’s constitution, foreign companies aren’t allowed to buy Russian land, though still possible to lease.
Acquiring farmlands abroad is now becoming a trend around the globe. Oil-rich but food-poor countries in the Middle East and North Africa explore similar options. Libya is now in talks with Ukraine about growing wheat in the former Soviet republic, while Saudi Arabia says it will invest in agricultural and livestock projects abroad to ensure food security and control commodity prices."
The Law of Unintended Consequences states that any action will produce some unintended consequences.
A classic example is a bypass – a road built to relieve traffic congestion on a congested road – that attracts new development and with it more traffic, resulting in two congested streets instead of one.
This maxim is not a scientific law; it is more in line with Murphy's law as a warning against the belief that we can control the world around us. In other words, each cause has more than one effect, which will invariably include at least one side effect. The side effect can potentially be more significant than any of the intended effects.
Students of history often conjecture that if the Treaty of Versailles had not imposed such harsh conditions on Germany, World War II would not have occurred. From this perspective, one might consider the war an unintended consequence of the treaty. 
Mish Shedlock has a good take here on the Law of Unintended Consequences:
"Whenever Congress puts together a bill attempting to find a solution to some sort of real or imagined problem, my immediate thought is that the bill do one of four things:
-It will worsen the problem at hand
-It will do nothing to solve the problem but instead create a new problem somewhere else
-It will worsen the original problem and create new problems
-In the very best case it will do nothing at all
The best case in this case is that no bill is passed. What will work equally well is that if a bill is passed, it it vetoed and left for dead."
Examples from Wikipedia:
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Examples of unexpected benefits:
The medieval policy of setting up large hunting reserves for the nobility has preserved green space, often as parks, throughout England and other places in Europe.
Likewise the creation of "no-man's lands" in places such as the Korean demilitarized zone have created unique natural habitats.
The sinking of ships in shallow waters during wartime has created many artificial coral reefs.
Controversial research carried out by John J. Donohue and Steven Levitt and published in the Quarterly Journal of Economics suggests that legalized abortion in the United States can account for about 50% of the drop in national crime rates that occurred in the 1990s. As evidence, Donohue and Levitt cite the fact that states that legalized abortion before Roe v. Wade saw correspondingly earlier drops in crime, and states where abortion is common saw greater drops in crime than states where abortion is rare. Most convincingly, they found that "in high abortion states, only arrests of those born after abortion legalization fall relative to low abortion states."
In medicine, most drugs have unintended consequences associated with their use, which are known as 'side effects'. Many are harmful and are more precisely called 'adverse effects'. However, some are beneficial—for instance, aspirin, a pain reliever, can also thin the blood and help to prevent heart attacks. The existence of beneficial side effects also leads to off label use—prescription or use of a drug for a non-intended purpose.
Examples of perverse results:
The Streisand Effect occurs when an attempt to censor or remove a certain piece of information (such as photograph, file or website) instead causes the information in question to become widely known and distributed in a very short time. The fact that a piece of information is being restricted assigns to it a previously nonexistent value in the eyes of the public.
The introduction of rabbits into Australia for sport led to an explosive growth in the rabbit population; rabbits have become a major feral pest in Australia.
Standard economic theory implies that minimum wage laws increase unemployment among low wage workers (the workers whose wages the minimum wage law will affect). A survey of American Economic Association economists found that 45.6% fully agreed with the statement "a minimum wage increases unemployment among young and unskilled workers", 27.9% partially agreed, and 26.5% disagreed.
The stiffening of penalties for driving while intoxicated in the United States in the 1980s led, at first, to an increase in hit and run accidents, most of which were believed to have been drunken drivers trying to escape the law (Later, legislators stiffened penalties for leaving the scene of an accident when driving while intoxicated as well).
In 1990, driven by concern for the increasing number of cyclists' head injuries, the State of Victoria (Australia) made safety helmets mandatory for all bicycle riders. The expected significant reduction in the absolute number of head injuries occurred, but there was also a concomitant, entirely unexpected reduction in the number of juvenile cyclists. Research by Vulcan et al. found that the reduction in the number of juvenile cyclists was entirely because the youths considered wearing a bicycle helmet unfashionable.
"Prohibition", in the 1920s U.S., originally enacted to suppress the alcohol trade, drove many small-time alcohol suppliers out of business and consolidated the hold of large-scale organized crime over the illegal alcohol industry. By the time the U.S. repealed Prohibition, the brewing industry had concentrated in a few major brewers, which had been able to ride it out.
Sixty years later, the "War on Drugs," intended to suppress the illegal drug trade, likewise drove many small-time drug dealers out of business and consolidated the hold of organized drug cartels over the illegal drug industry. Additionally, it has led to the existence of street drugs of unknown strength and contamination; at least some drug-related (and particularly opiate-related) deaths are the result of accidental overdosing on drugs that a dealer neglected to dilute to the usual extent.
In CIA jargon, "blowback" describes the unintended, even undesirable consequences of covert operations. Examples include: Operation Ajax, which contributed to the 1979 Iranian Revolution & the Iran hostage crisisCovert funding of the Contras in Nicaragua, which lead to the Iran-Contra AffairCovert funding of the Mujahideen, which led to the rise of the Taliban Government rent control has led to the unintended consequence of housing shortages and reduction in housing quality, increased difficulty for less desirable renters to obtain or retain housing and even to the creation of slums—areas where owners permit rental property to run down until it becomes uninhabitable, leading renters to leave.
Father Matthew's temperance campaign in 19th-century Ireland – in which thousands of people vowed never to drink alcohol again – led to increased consumption of ether (a much more dangerous intoxicant) by those unwilling to break their "pledge".