Episode 01: What is the Cobra Effect… and a Brazilian polka? 

In this episode, we first travel more than 100 years to the city of Delhi, in India. 

The British colonial government decided to eliminate the overpopulation of cobras slithering around and put a bounty on each of them. The measure took immediate effect, and the economic incentive initially worked well. However, the authorities did not foresee other subsequent events. To receive more rewards, the local entrepreneurs began breeding cobras in their homes, and the city administrators noticed that, despite fewer cobras on the streets, the volume of bounty payments remained the same. After an inquiry into the situation, the British found the cobra farms and cancelled the bounty program. Of course, they also did not foresee what happened next. The locals decided to get rid of the cobras, and soon the streets of Delhi were again flooded with these animals. 

Based on this story, in 2002, the German economist Horst Siebert coined the term “cobra effect” to describe cases of unintended consequences when the proposed solution backfires making the problem worse. And you guessed right! Hence, the title of this podcast. 

Now, if you look further into the story of the cobras, you will see that it doesn’t go beyond what I described in online forums and articles. Some even consider this to be a tall tale. 

However, when it comes to animals and unintended consequences, there are numerous verified examples. Another example that can be easily found online happened in Vietnam, where in 1902, the French colonial authorities relocated the capital of French Indochina from Saigon (now Ho Chi Minh City) to Hanoi. The governor general commissioned the construction of an underground sewage system. If, as a kid, you liked the Ninja Turtles cartoon, you know that Master Splinter raised our ninja turtle friends in total secrecy in the sewage of New York. The endless tunnels protected them. That is precisely what happened in Hanoi in 1902. Without any natural predators, rats found protection in the sewage system and access to food right above them. The French panicked. Not because of the mere sight of a rat, I would have screamed too, but because just years before, Alexandre Yersin discovered the bacteria that caused the Black Death, by far the deadliest pandemic in history. Rats host fleas, and fleas host the Yersinia pestis bacteria that cause the Black Death. Hence the panic.   

First, the French authorities hired professionals to go down the sewage to inspect, catch, and eliminate the rats. The pay was not good, the job was dangerous, and although every day thousands of rats were killed, the eradication campaign was not enough. Also, the French population complained that the rat-catchers were walking around with sewage stench while carrying hundreds of dead rats. Oh là là! L’horreur! 

Then, the French authorities decided to offer 1 cent to any local for each dead rat. But, to avoid having to deal with all the dead bodies, the local rat hunters were asked only to show the tail of the rat as evidence. Sounds good, right? Sounds reasonable? You may be guessing what happened. Why would you kill the goose that lays the golden eggs? Or the golden tail in this case. The Vietnamese local entrepreneurs needed rats to reproduce to continue collecting their tails and receiving payments. Soon, rats without tails were seen in the streets, and rat farms were discovered on the outskirts of Hanoi. The French authorities cancelled the payment program, and the city ended up having more rats than before. 

Historian Michael G. Vann first reported these incidents for his doctoral research, and these events were brought to the attention of the general public when, in 2012, he was invited to the Freakonomics Radio show. 

Now, what if I tell you that almost at the same time, a similar situation was happening on the other side of the world, in Brazil. In 1903, to prevent a plague outbreak in Rio de Janeiro, Oswaldo Cruz was appointed as the Director General of Public Health, a position similar to a Minister of Health. His plan had three main components: to quarantine infected patients, to use anti-plague serum, and to eliminate rats. Government officials were tasked with killing at least 5 rats a day under threat of being fired. They were paid extra for any extra rat. At the same time, under the orders of Oswaldo Cruz, the General Directorate of Public Health began purchasing rats from the public. 

Osvaldo Cruz was a pioneer in the study and treatment of tropical diseases and microbiology in Brazil. Today, there are streets, schools, and neighborhoods named after him. If you go to the webpage of the Oswaldo Cruz Foundation, you will read this about the 1903 campaign to eliminate rats in Rio de Janeiro:   

“Since anyone could sell rats to the government, a new occupation soon appeared in the city: “ratoeiros”—literally, ratters—men who went around town buying up rats at a low price and selling them to the General Directorate of Public Health. There were even some who raised rats at home for this very purpose and also those who traveled to other cities to find them. In a short while, the “ratter” trade was doing a booming business.”

These “ratoeiros,” people with the same enterprising spirit as the cobra farmers in India and rat farmers in Vietnam, would walk around the streets with a bag, blowing a bugle and shouting: Rato, Rato, Rato! The Portuguese word for rat. This street merchant’s cry became so popular that a year later, in 1904, a polka song inspired by it and titled “Rato, rato” was the sensation of the Rio de Janeiro carnival. The song simultaneously mocked the rats and the government. Parts of the lyrics were: 

“Rat, rat, rat,

Why did you chew my trunk?

Rat, rat, rat

You, insolent and malevolent rascal

…

My penny is guaranteed, I will never release you, no matter what.”

Of course, it sounds better in the original Portuguese language. 

As final remarks, in his 1850 essay, “That Which Is Seen and That Which Is Not Seen,” French economist Frédéric Bastiat writes that “In the sphere of economics, an action, a habit, an institution, or a law engenders not just one effect but a series of effects. Of these effects, only the first is immediate; (and) it is revealed simultaneously with its cause, it is seen. The others merely occur successively; they are not seen.” Bastiat explains that only the good economist “takes account both of the effect one can see and of those one must foresee.” The complex interactions between individuals, with their particular incentives, are complex and difficult to anticipate. The three picturesque cases mentioned before illustrate how unintended consequences transform good intentions into bad policies. 

Well-meaning plans can lead to revolt, failure and shocking events. From ancient Mesopotamia to current world events, The Cobra Effect Podcast covers the unintended consequences of government policies regarding taxation, price and wage controls, foreign aid, collectivization, the environment and much more. Four millennia of history on all continents show that we repeat the mistakes of the past when judging ideas by intentions rather than results.

That’s what this podcast is about, and I hope you join me in this adventure to explore four thousand years of Cobra Effects around the world.

Link Sources: 

COBRAS

https://www.amazon.com/Kobra-Effekt-Irrwege-Wirtschaftspolitik-vermeidet/dp/3421056781 

https://fee.org/articles/the-cobra-effect-lessons-in-unintended-consequences/ 

https://freakonomics.com/podcast/the-cobra-effect-2/ 

RATS IN VIETNAM

https://www.hanoivietnam.fr/le-massacre-des-rats-de-hanoi-en-1902/ 

https://madeinchinajournal.com/2020/08/20/the-great-hanoi-rat-hunt/ 

https://www.jstor.org/stable/41299413?typeAccessWorkflow=login

https://www.jstor.org/stable/41938159?typeAccessWorkflow=login 

RATS IN BRAZIL

https://www.amazon.com.br/Os-sons-que-v%C3%AAm-ruas/dp/857326327X 

https://revistapesquisa.fapesp.br/en/war-on-the-plague/ 

https://agenciabrasil.ebc.com.br/en/https%3A//agenciabrasil.ebc.com.br/en/node/1474734 

https://oswaldocruz.fiocruz.br/index.php/en/biography/scientific-career/general-directorate-of-public-health/the-campaign-against-the-bubonic-plague 

“Rato, rato” polka: https://www.youtube.com/watch?v=WU91-4H1Vow 

Bastiat’s essay: https://oll.libertyfund.org/page/wswns