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  • Writer's pictureJaime Ventura Energy Consultant

THE COBRA EFFECT

Updated: Jul 28, 2023


The Cobra effect

Many years ago during the British rule in India, the government was very concerned about the number of poisonous cobras that existed. So they decided that the solution to the problem was for the inhabitants themselves to kill them, but how could they achieve that?


They made the decision that seemed simpler and more imminent. A "reasonable" amount of money would be paid for each cobra that the inhabitants brought before the authorities, and "voila", matter resolved. The people of India began to earn an income by hunting cobras and the problem for the British government lessened and everyone was happy, for a while. Sadly the story did not end there.


There was a spontaneous effect of the market, a new product was created to commercialize, "Cobras": Instead of killing them, it was better to hunt them, breed them and reproduce them in series and then sell them in a new "artificial" segment of the market that had been created: The British government.


Now the new client was buying Cobras that were not a danger to the community and this was benefiting from an unnatural business, forced by a government decree (imminent solution) that tried to solve a problem without having studied the real needs of the population.


Then, they made another arbitrary decision: Stop paying the reward. The market reacted “naturally”, there was an overstock of cobras without any demand. As in our times, when the demand is negligible and the supply is brutal, companies "give away" or throw away the product, often with polluting effects. This case was the same, the breeders decided to release the cobras and now the number of cobras increased even more than at the beginning.



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