Ecosystems are complex. When you try to intervene and “fix” one discrete part of an interconnected ecosystem, you’ll likely incur unintended and unpredictable consequences elsewhere. An ecosystem can be a biological community; it can also refer to a large company or even an entire economy. I love Arnold Kling’s metaphor of a country’s economy being like a rainforest. It’s a metaphor that should humble any policymaker who thinks he can simply turn a knob here or a knob there to shape economic outcomes.
In a recent episode of Econtalk on free market environmentalism, there’s an interesting story about wolves in Yellowstone. When wolves were taken out of Yellowstone park, all sorts of weird things happened. A very cool 5 minute video summary (with some beautiful imagery) explains.