Goodhart's Law

I stumbled over this at Ace's yesterday. A couple of time I have speculated that there must be (or at least should be) a economic and/or social equivalent of "Heisenberg's Uncertainty Principle", that the act of measuring an economic or social phenomenon actually changes the results in an unpredictable way. Behold:

Goodhart's law:

Originally, an economic theory stating that if a particular definition of the money supply were to be used as the basis for monetary policy, the stability of its statistical relationship with spending on the economy would break down and the policy would prove ineffective. The law is now cited more widely to highlight the problems of focusing on the value of any specific variable as an indicator. In simple terms, when a measure becomes a target, it ceases to be a good measure. The applications to performance measurement in management accounting and other aspects of business are obvious.

This could be considered a pyscho-social equivalent of the Observer Effect in physics, of which Heisenberg's Uncertainty Principle is an example.

In science, the term observer effect refers to changes that the act of observation will make on a phenomenon being observed. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner. A commonplace example is checking the pressure in an automobile tire; this is difficult to do without letting out some of the air, thus changing the pressure. This effect can be observed in many domains of physics.

Dammit, and here I thought I might have thought of it first.