In general, how is human action affected by any governmental intervention? Suppose, for instance, that a government attempts to outlaw the trading of apples, using the threat of force (imprisonment) to prevent citizens from buying or selling the forbidden fruit. Let us analyze the effects of this law on the actions of four possible classes of people:

1. Some people may not be directly affected because of the nature of their value scales: that is, they would not have bought or sold apples in any case. As we shall see later, however, the new policy may have indirect negative effects on their welfare.
2. Some people may modify their actions to avoid the penalty of the law, refraining from buying or selling apples.
3. Some people may attempt to buy or sell apples, but will be caught and sent to prison.
4. Some people may buy or sell apples despite the law and manage to escape its penalties.

The four listed classes, it should be observed, exhaust the logical possibilities. Obviously, the law fails to fulfill its purpose with respect to classes (1) and (4). Its purpose is fulfilled to some degree with respect to (3), but only through overt force. The individuals in class (2) are obliged to act contrary to their value-preferences by the threat of governmental force. In essence, the value scales of governing authorities are substituted for those of the acting individuals in this class.     

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