They say the road to hell is paved with good intentions. What they don’t often mention is that, like a parade route, both sides of that road are crowded with well-wishers cheering you on.
In a country where we give children “participation trophies” for merely showing up and “doing their best,” it’s not surprising that we applaud business leaders simply for “trying to make a difference.” As long as their intentions are good, why should we criticism their efforts?
I was reminded of that pervasive attitude after writing about Dan Price and Gravity Payments. My article in April on “Why the $70,000 Minimum Wage is Doomed to Fail” was the most criticized piece I’ve ever written for this blog. As one commenter wrote, “We just witnessed a CEO become a humanitarian and I’ve never seen so many people wish for his failure.”
This was a typical reaction to the article, and an all-too-common response to any criticism of good intentions, especially in the business world. Merely pointing out that a policy is likely to conflict with the norms of economics and human behavior is enough to get you labeled a cold-hearted pessimistic scrooge. Why focus on the negatives, people say, when someone is merely trying to do good?
The reason, as the old proverb implies, is that when divorced from prudence good intentions can lead us to be worse off than we were before. That was the reason I was critical of Price’s decision to pay every one of his 120 employees a minimum of $70,000 a year. I thought then—and believe still—that is could lead to unemployment for the company’s workers.
However, in my article there was one thing I was clarly wrong about. I assumed the policy would lead to the company’s bankruptcy within 5 years. A new article in the New York Times shows that the company many not last even that long.