Ratchet effect

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The ratchet effect is the commonly observed phenomenon that some processes cannot go backwards once certain things have happened, by analogy with the mechanical ratchet that holds the spring tight as a clock is wound up. It is related to the phenomena of featuritis and scope creep in the manufacture of various consumer goods, and of mission creep in military planning.

Garrett Hardin, a biologist and environmentalist who also wrote of the 'tragedy of the commons', used the phrase to describe how food aid keeps alive people who would otherwise die in a famine. They live and multiply in better times, making another bigger crisis inevitable, since the supply of food has not been increased. The same point was made by Thomas Malthus in 1798.

Austrian school economist Robert Higgs has also used the term to describe the seemingly irreversible expansion of government in times of crisis in his book Crisis and Leviathan^[1].

The ratchet effect is also used as a term for the results of an economic strategy arising in an environment where incentive depends on both current and past production, such as in a competitive industry employing piece rates. The producers observe that since incentive is readjusted based on their production, any increase in production confers only a temporary increase in incentive while requiring a permanent greater expenditure of work, and thus decide not to reveal hidden production capacity unless forced to do so.

The ratchet effect is referred to in many disciplines, from politics to management to evolutionary theory. One of the manifestations of the ratchet effect in mathematics is Parrondo's paradox.

In terms of politics, the "ratchet effect" was used to describe the government's inability to scale back the huge bureaucratic organizations that were once needed. Often, these machines were created in times of war to fuel the needs of their troops abroad. The "ratchet effect" can also be viewed through the lens of international organizations that have trouble with reforms due to the myriad layers of bureaucracy that were previously created.

Ratchet effect can also apply to medicine and obesity. The capacity of the body to add new adipocytes, but impossibility of reducing the existing number is termed the Ratchet Effect. This term implies that body fat, and thus body weight, can always increase, but cannot decrease (except under extreme circumstances) below a minimum level set by the total number of adipocytes in combination with their tendency to remain lipid-filled.

The Ratchet Effect can be seen in long-term trends in the production of many consumer goods. Year by year, automobiles gradually acquire more features. Competitive pressures make it hard for manufacturers to cut back on the features unless forced by a true scarcity of raw materials (e.g. an oil shortage that drives costs up radically). University textbook publishers gradually get "stuck" in producing books that have excess content and features. Airlines initiate frequent flyer programs that become ever harder to terminate. Successive generations of home appliances gradually acquire more features; new editions of software (e.g. Word) acquire more features; and so on. With all of these goods, there is on-going debate as to whether the added features truly improve usability, or simply increase the tendency for people to buy the goods.