Family Free-Riders Part II
Posted by Shannon Love on March 6th, 2006 (All posts by Shannon Love)
My post below generated a lot of comments after Instapundit and FreeRepublic inked to it. Reading all the comments provoked a few thoughts:
(1) A lot people don’t understand that free-rider is a term of art within economics. Its a technical term, not a pejorative. Free riding is an economic effect, not a choice. In this context, there are many people who are eager to assume the burdens of child rearing but for a variety of reasons cannot. Morally they are not free-riders but economically they are. Every working person contributes to the economy to the benefit of everyone, but a free-rider problem occurs when a subset of the population shoulders the cost of a resource that is communally shared. I argue that is what has happened with child rearing.
(2) Like the tragedy of the commons, free riding feeds on itself. In the tragedy of the commons, each individual tries to consume as much of the common resource as quickly as possible because they presume that everyone else will do the same. Anyone showing restraint will lose out. Free riding is the exact same phenomenon, except that instead of consuming a resource, people try to avoid expending a resource. Each person has a motive avoid paying because they presume that others are also avoiding paying. Anyone who does pay loses out. Over time people choose the free ride even if everyone knows, intellectually, that every one will be worse off for doing so. As the childless grow richer and parents grow poorer more people will choose to be childless.
(3) For purposes of this discussion, we should think of economically productive adults as being a commodity or resource which the economy must continue to produce in order to survive. Think of them as robots instead of human beings. The free-rider problem occurs because people who do not spend the resources to create the robots get to benefit from the robots’ output just as much as do the people who built them. In this case, where is the incentive to build robots?
(4) You can identify a free-rider situation by asking, “what would happen if everyone took the suspected free-ride?” If everyone maximized their own short-term economic self-interest and avoided the cost of child rearing, the economy would collapse. Conversely, if everyone contributed equally to the cost of child rearing it wouldn’t. Clearly, avoiding the cost of child rearing offloads an economic burden onto someone else.
(5) Many childless commentators think they should get credit for paying taxes to help raise children other than their own. However, paying taxes for other people’s children doesn’t have any effect on the free-rider problem unless the taxes completely flatten the differential between people of the same income potential who have children and those who don’t. To prevent the free-rider problem from occurring an individual would have to incur the same cost whether they had children or not.
Most childless commentators are seriously delusional about the amount of taxes they pay versus parents. They seem unaware that parents pay all the property and sales taxes they do and receive only trivial breaks on income taxes. The federal child-tax credit is a whopping $1000/year. The USDA estimates that it costs a middle-class family $170,460 to raise a child to age 18. So, even paying an extra grand a year in taxes, a childless couple would still come out $152,460 ahead.
If the childless couple invested the money that they saved every year by not having a child they could clear $215,396 after 18 years at a 4% return. So, parents come out $152,460 in the hole and the childless come out $215,396 ahead. Does anyone think that a delta of $367,856 won’t affect the choices that middle-class people make? That is not even counting the non-monetary losses in time and freedom.
(6) I am surprised at the number of commentators whose default view of children is highly negative. They seem to see nothing in children but criminals just waiting to put on enough mass to go on a real rampage.
(7) Even though about half of the negative commentators were screamingly hysterical that I was recommending that they all be marched off to the breeding centers, I made no policy recommendations. I am not even sure that any need to be made. I certainly have no interest in forcing people who do not wish to be parents to do so. I am concerned, however, that we are making parenting increasingly undesirable because it is so expensive.
If I had to recommend policy I would say that since we can’t really make children’s future income a form of property, the only solution is to reduce the cost of raising children, and I think the major costs these days come from collectivism. Socialist Europe and blue-zone America are the most child-hostile regions and they are also the most collectivist. Collectivism makes everything more expensive and more time-consuming to get, which drives the cost of child rearing that much higher.
Collectivism erodes the cultural underpinnings of successful parenting. Collectivism encourages individuals to think of themselves as consumers instead of producers. Collectivism encourages a play today, let somebody else pay tomorrow, mentality. Collectivism encourages people to think of life in terms of material rewards. None of these traits is conducive to the mindset of a successful parent.
(8) We all need to remember that economically productive adults don’t just happen. Parents invest a great deal of time and money to create them. However, in the modern era, parents do not receive any significant economic return. Parents benefit economically from the productivity of their adult children at about the same level as do total strangers who shared little in the cost of raising them. This creates a classic free-rider problem
The existence of the free-rider problem in child rearing should be a flashing warning signal to everyone that a potential problem does loom. We have a situation here where the production of the single most important resource of all (indeed arguably the only true resource), human minds, is being increasingly economically penalized. If we found a similar free-rider effect in any other economic arena we would definitely be extremely concerned.
[Update 2006-03-06 16:55:42: Just another attempt to clarify. The free-rider problem does not arise because of a conflict between subgroups within the population, in this case parents versus the childless, but rather between two CHOICES that INDIVIDUALS make, in this case to-have-children or not-have-children.
The free-rider problem arises when the ECONOMIC input of each choice differs but the ECONOMIC output is the same. In this case, the ECONOMIC input of the choice to-have-children is much higher than the choice not-to-have-children, even though the ECONOMIC output of both choices are identical.
An INDIVIDUAL, seeking to maximize their ECONOMIC wealth in the future should make the choice not-to-have-children. They are technically free-riders because they will receive the same ECONOMIC benefit from the next generation of children as an OTHERWISE IDENTICAL INDIVIDUAL who made the choice to-have-children.
The argument that parents derive great NON-ECONOMIC utility from their children and that this compensates them for their ECONOMIC losses in a MORAL sense is undoubtedly true to a great extent. It also completely irrelevant because the free-rider problem doesn't deal with non-ECONOMIC utility.
The free-rider problem isn't a statement about morality, politics or philosophy. It is a statement about how ECONOMIC inputs and outputs of different choices in certain specific ECONOMIC conditions effect human ECONOMIC behavior. ]
March 6th, 2006 at 6:52 pm
Well put! I agree with most of what’s been said. I enjoy at change of perspective. Most of my initial comments were unwarranted if this was the original meaning.
I’m still reserved on the use of “free rider” in the context of systems you didn’t sign-up for. Since “free rider” is usually a term used in justifying policy, I don’t think I overreated too much when imagining you were going to price us for other people’s children. (I’m too young but I want to have tons of children. I’m not a children-hater, only a tax-to-equilibrium-hater ;-))
March 6th, 2006 at 8:38 pm
Very thought-provoking and solid two posts on this subject.
I’m glad you took the time to articulate this. Perhaps you would consider putting this into an academic paper of some kind as well, so other researchers etc. could access it.
Keep up the good work.
March 6th, 2006 at 10:09 pm
“The free-rider problem occurs because people who do not spend the resources to create the robots get to benefit from the robots’ output just as much as do the people who built them.”
As I noted on the other thread, the notion that people generally benefit *just as much* from children’s productivity (after they grow up) as their parents do is preposterous. Again, I put this question to you: do you seriously assert that people are going to be as generous to J. Random Stranger as they are to Mummy and Daddy?
“Many childless commentators think they should get credit for paying taxes to help raise children other than their own. However, paying taxes for other people’s children doesn’t have any effect on the free-rider problem unless the taxes completely flatten the differential between people of the same income potential who have children and those who don’t.”
In fact, a subsidy of whatever size creates a free-rider problem *in the other direction* — when John Doe only has to pay a fraction (even if it is 99.99%) of the cost of a given decision because the government will forcibly extract the remainder from Joe Blow, the former is a free rider upon the latter.
“So, even paying an extra grand a year in taxes, a childless couple would still come out $152,460 ahead.”
This $1000 figure is preposterously small — the school system alone (to take an obvious example of a free ride taken by the childbearing on the backs of the childless) can slurp that out of a typical middle-class taxpayer’s wallet in a month or two in these parts.
March 6th, 2006 at 10:14 pm
“I am surprised at the number of commentators whose default view of children is highly negative.”
That is a predicable result of your calling them “free riders”. (I’m afraid that your attempt to disclaim any perjorative implication is about as convincing as Mayor Nagin’s attempt to disclaim any racist implication in his famous “chocolate city” comment.)
March 6th, 2006 at 10:32 pm
I take issue the $170,400 figure to raise a child to 18. The middle class spends freely and this figure likely includes options and discretionary spending above what it takes to decently care for the youngster. I’m guessing that, for the general population (why would we limit ourselves to the middle-class in this discussion?), the figure is about half that cited for the middle-class when we get down to the necessities of raising a happy, healthy kid.
(The public contribution (educational expense) to raising the average kid -@ about $8000/yr./kid- would seem to be greater than parental contribuiton, if I am correct).
Some DINKs no doubt invest the delta but my understanding of the situation is that most of us don’t save very much. The likely reality is that the DINKS get the fancier (if not bigger) house, for example, and bigger property taxes. The fancier car, etc. which keeps the taxes and economy rolling.
I don’t think Shannon’s wrong, necessarily, but he is overstating the case quite a bit.
March 6th, 2006 at 11:13 pm
steveB,
I am sorry if you are not familiar with the free-rider problem as a well understood economic and game theory concept. Here is a link to the wikipedia article on the free-rider problem that will prove a good starting place. Frankly, I just assumed that most people reading ChicagoBoyz would already be familiar with the concept. Sorry if I confused you.
The only way to understand the free-rider problem is to think of the case of two couples A and B with identical incomes. Couple A has children but couple B does not. Over the long term which couple will be wealthier? Couple B. Moreover couple B will get the same economic return from the children as their parents do i.e. by the children’s contribution to the general economy as adults.
The fact that couple B pays taxes to support children that are not theirs has no effect on the free-rider problem because parents must pay all the same taxes. The idea that the childless are somehow subsidizing parents would only be true if children produced some economic return for their parents.
March 6th, 2006 at 11:23 pm
SteveB,
Again, I put this question to you: do you seriously assert that people are going to be as generous to J. Random Stranger as they are to Mummy and Daddy?
People will be more generous to family than to strangers but the truth is that very little generational transfer of wealth flows from children to parents. People acquire wealth as they age so most parents, even those with successful children, are always more wealthy than their children.
In agricultural times, children used to contribute directly to the families bottom line for a decade or more before they established their own households. Now that is no longer the case. Children consume parental resources for 20 years or more before going out on their own. Once they are out on their own they don’t send home a check every month.
The fact remains that empirically the childless today have more disposable income and more opportunities to acquire wealth than parents.
March 6th, 2006 at 11:36 pm
As a conservative, I don’t want to overturn long-established social arrangements because some clever and probably self-interested person advances some interesting ideas on how society would work better according to their schema. Inevitably, such arrangements are useful for the person involved, but lack being useful for the great mass of society that is not like the peculiar person.
Thus, I favor continuing the protection of children by the whole of society.
“Free-rider” may be taken as a derogatory term, but in truth, its not. As Jeff Goldstein admirably fights for, interpretation of a word is not in the head of the listener. It is in the intent of the speaker. And the speaker has repeatedly stated this is a term of art in economics. And this is not a novel definition, he has cooked up.
So, this is a simple question of fact. Are you receiving benefits which you have not paid for? Yes, or no. If no, then you are not a free-rider. If yes, then you are.
Your desire for personal freedom, your quest for privacy, your personal situation, and even your lack of ability don’t really enter into this. For the last, I am personally sympathetic, its one of the great tragedies. But this is not about your desires, its about actions and physical consequences.
One note unrelated to the previous bit: I notice some on the anti side who seem to object to changing society to adjust to these realities. Yet, they are perfectly willing to let in widespread immigration to shore up the foundations they have helped erode. My query is, why are you more willing to accomodate foreigners and their desires for a society (for this is what you do when you let in large numbers of immigrants, you can’t help do otherwise), and not be willing to accomodate the desires of your fellow Americans.
Truly some orcs see an elflord in all his glory, and laugh to themselves how much better they are than that disgusting elf. And what the orcs don’t remember is that they are fallen, degenerate from the higher estate.
I don’t hold a soldier in contempt thinking him stupid. No, I see a man better than me in ways, at least. His patriotism exceeds mine. His bravery, his physical prowess also. He is more like an elflord than I, who is in this case, more orc-like.
And so it is with the single to the parent. It is a higher, more noble calling. Perhaps, you like me and the soldier are not fit to take up the mantle, but don’t lie to yourself that this is the nobler path you have taken. It takes great sacrifice to surpass the sacrifice of a parent, and unless I see you signing up for the nunnery, I shall be skeptical.
March 6th, 2006 at 11:39 pm
“I am surprised at the number of commentators whose default view of children is highly negative.”
I may be going out on a limb here, but mayhap this would be pretty big reason why they don’t have children? Just sayin…..
People who came from damaged homes and damaged parents are, themselves, far more likely to NOT want to have children.
March 7th, 2006 at 12:10 am
It should go without saying that some couples have fewer children than they would wish to, for biological reasons. Our daughter has four grandparents, but she is the only grandchild of any of them. We cannot have more children, although we would like to. Both my brother’s family and my brother-in-law’s family would love to have even one, but for various reasons, they can’t.
I suppose in a strictly technical sense we all count as free-riders, but it’s not for lack of trying.
March 7th, 2006 at 12:29 am
Married people, no matter what their income, live practically tax free once their deductions are done. That goes even for ones that don’t own their own home. Single people, on average, pay twice the taxes, year in and year out, year in and year out, as do married people. I did the H&R tax cut software last year and found this crummy little fact out. It DOES NOT PAY to be single.
March 7th, 2006 at 4:15 am
Shannon — I think there’s a seriously soft spot in your argument. If the cost of having kids is seriously impacting the decisions of potential parents, and if this is a serious problem, then why are the economically less well-off having more kids than the economically well-off? Presumably the poor would be much more put off of having kids (because they really can’t afford it) than the rich (who really can afford it). Yet that isn’t the way it’s playing out in reality. The poor go on breeding like rabbits, while the rich cut back on having kids. I think your model might want to take this into account somehow. It might also want to acknowledge the fact that the poor and near-poor manage to raise their kids anyway, despite not having hundreds of thousands of dollars to spend on every one of their kids.
March 7th, 2006 at 4:36 am
Shannon — I think there’s a seriously soft spot in your argument….. then why are the economically less well-off having more kids than the economically well-off?
Posted by: Michael Blowhard on March 7, 2006 04:15 AM Permalink
Because they are crap at utility-maximization, why do you think they are poor in the first place?
I’m kidding. They probably derive a satisfaction-type benefit out of having kids (as I do from my one so far), the question is whether that benefit produces sufficient kids to keep society going (even with some immigration).
I think liberal, post-Christian societies that turn abortion into this cheap, socially acceptable
activity justified by the slightest economic disadvantage are asking for trouble if they don’t figure away to incentivize child-bearing at some point.
That was a chap called Lee Kuan Yew who proposed a vote-weighting scheme that gave those aged 30-40 extra votes and reduced those of the elderly and the too young (who were easily bought by benefits and too easily swayed).
Perhaps children should get their vote at 7 but let parents cast their vote - the political shift would push family friendliness back on the agenda (and give Mexican migrants some voice through their children’s vote).
On soldiers, if no one signed up, recruitment would drop and salaries would go up eventually.
With kids, there is no economic link beyond social values and biological impulse.
March 7th, 2006 at 6:31 am
You’re double-counting the cost in point (5).
March 7th, 2006 at 8:24 am
While I may benefit from the existence of “ex-children”, I pay for their services, so I’m not a free rider with respect to them.
As far as current children go, the childless do pay for some of their expenses. While parents may pay more, they clearly think that it’s an acceptable price. They’re getting something that they feel is “worth the money”.
> The only way to understand the free-rider problem is to think of the case of two couples A and B with identical incomes.
Only if you assume that having children is of no value, which is clearly false. Disagree? Feel free to advocate handing all children over to a state agency, paid for by all.
> The fact remains that empirically the childless today have more disposable income and more opportunities to acquire wealth than parents.
Suppose that there was a general tax to partially support Disneyland but folks who went still had to pay something for that privilege.
Clearly there’s no economic benefit to going to Disneyland and the folks who do so will have less opportunities to acquire wealth.
Yet, no one would argue that the folks who paid but didn’t go were somehow “free riders” just because the folks who did go pay more.
March 7th, 2006 at 8:28 am
> A lot people don’t understand that free-rider is a term of art within economics. Its a technical term, not a pejorative.
It’s almost always followed by an attempt to extract money from the “free-riders”. Or, in this case, more money.
I’d like other folks to subsidize things that I do that don’t make me money. Why are my things less worthy than yours?
March 7th, 2006 at 8:36 am
sammler,
You’re double-counting the cost in point (5).
How so? I intended to demonstrate the gulf between the parents who end up with negative $152,460 and the childless who come out with a positive $215,396. The absolute difference between the two is $367,856.
If this is not what you meant provide more detail and I will correct the post.
March 7th, 2006 at 8:40 am
“Here is a link to the wikipedia article on the free-rider problem that will prove a good starting place.”
The article defines “free riders” as “actors who consume more than their fair share of a resource, or shoulder less than a fair share of the costs of its production.”
For example, when “couple B pays taxes to support children that are not theirs”, couple A (the actual parents) are “free riders”, as they are shouldering less than a fair share (100%, since the decision and the custody are entierely theirs) of the costs.
“The fact that couple B pays taxes to support children that are not theirs has no effect on the free-rider problem because parents must pay all the same taxes.”
Irrelevant. As per the above definition, the fact that someone pays a fraction, but not the whole, of his fair share of the costs he creates does not make him any less a “free rider”.
“The idea that the childless are somehow subsidizing parents would only be true if children produced some economic return for their parents.”
Also irrelevant. Digging holes and filling them in again has no economic value; however, if I insist on having holes dug in and filled up in my yard all day, and I somehow make other people pay for it, I am just as much a “free rider” as if I’d actually gotten other people to pay for something useful.
March 7th, 2006 at 8:44 am
McAristole
then why are the economically less well-off having more kids than the economically well-off?
Well, it would be an argument if it were true that poor families are larger than wealthier families but that is in fact a misconception. Upper income families are still larger than lower income families although the gulf between the two is not as large as it was in the 1800’s.
We also have the modern phenomenon of single parent families failing down the income grade after children are born due to divorce. Children born into the middle-class slide into poverty after their parents split making it appear that the poor are having children.
We also have to consider that until less than 10 years ago, the government paid poor people to have children. That effect has still not worn off.
March 7th, 2006 at 8:50 am
“You’re double-counting the cost in point (5).
How so?”
Simple. You are counting *not* having the money as a negative, and then counting the income produced from having the money as a positive. That counts the same money twice.
A simplified example that demonstrates the double-counting a bit more clearly: Joe Blow and John Doe each have $1000. Joe spends his money on those little robot pets; John invests it in something that earns $100. By your reckoning, John ends up $2100 ahead (Joe is $1000 in the hole, John is $1100 ahead, for a difference of $2100). The double-counting arises from describing Joe as “in the hole” *relative to John* and describing John’s wealth on an *absolute* scale, then adding the two measurements taken from different base points.
March 7th, 2006 at 9:03 am
Catkin,
Married people, no matter what their income, live practically tax free once their deductions are done.
Heh, no.
The only deductions that count for the free-rider problem are those expressly linked to having children. Deduction based on simply being married don’t count because those effect parents and the childless equally. Deductions like mortgage payments also don’t apply because a childless person who owns a house also gets the deduction.
In any case, at least in America, only a tiny fraction of the income tax is spent on children. Property and sales taxes fund education and other local government services that children receive and parents pay those taxes at exactly the same rate as the childless.
In order to understand my argument, you can’t think of the division as being between two group, parents and the childless but between two choices that individuals make to become parents or to remain childless. In other words, everything will remain equal in the persons lives, their marital status, their career, their income etc except whether they have children or not.
March 7th, 2006 at 9:24 am
“Why are my things less worthy than yours?”
It’s because this is all a “game”, and you’re not the one who crafted the rules.
It’s just that simple.
This entire notion (that’s all it is) is completely ridiculous.
March 7th, 2006 at 9:24 am
Now Shannon,
Most of us childless-types who had comments in your prior thread had strong reactions to the uppityness of some of the posters, moreso than the reactions to your analysis.
Regarding your analysis - maybe us childless-types are free riders, based on the overwhelmingly socialistic scheme in this country today. The point is not to fault the childless, but to fault the system as a whole.
The original tone of the post may or may not have been intended one way or the other, but you should have expected some rather quick reactions just because it’s a touchy subject for a lot of us on both sides of the equation
TV (Harry)
March 7th, 2006 at 9:28 am
“Property and sales taxes fund education and other local government services that children receive and parents pay those taxes at exactly the same rate as the childless.”
Which makes the parents free riders, since they are receiving all of the service but paying only part of the bill. At least, it does if we use the standard definition quoted in that Wikipedia article, not whatever idiosyncratic definition you are relying upon.
By your definition, someone who orders sirloin and champaigne and then splits the bill 50-50 with soemone who had bread and water is not a “free rider”. The absurdity of this conclusion speaks for itself.
March 7th, 2006 at 9:40 am
“In order to understand my argument, you can’t think of the division as being between two group, parents and the childless but between two choices that individuals make to become parents or to remain childless.”
In the original post, you described “free rider” as an economic term of art. That usage is incompatible with the distinction you are introducing here.
Either you are using “free rider” as an amoral descriptor (in which case it distinguishes only between results, not between intentions), or you are attaching a moral judgment to it. Which is it?
March 7th, 2006 at 9:47 am
From my bookmarks:
I like wearing jewelry. Anyone who has been here any length of time knows that. Now wearing jewelry is a choice. So is having a child. I don’t have to wear an armful of silver bangles, but I choose to because I enjoy the sight, sound, and sensation of them. Now bangles cost money, even if they aren’t real silver. How would you feel if I received a five dollar a year tax credit for each bangle? That could be hundreds of dollars if I wear thin ones. No one made me wear them, and for genuine silver it wouldn’t “pay” me to wear them, but you are being forced to subsidize a choice that you don’t agree with?
Let’s go a little further though. Let’s say that you go out to a restaurant. You show up and there is a sign in the window saying “bangle-friendly”. You sigh and go in because you are hungry. You hear the jangling of bangles, but if you say anything, then you are an evil bracelet hater so you roll your eyes to your partner. The menu says that people wearing bangles eat for half-price. You pay full price which actually subsidizes me. Just for fun, I jingle happily through the meal causing you to have a difficult time conversing.
You go to work the next day. I come in fifteen minutes late and breathlessly exclaim that I had to put on my bangles and sorry I’m late. Oddly, I don’t have to note this on my time card, and when the end of the day comes around, I leave early because I have to get my bangles polished. Strangely, I never have to make up the time. You however have to cover my phone and finish the stack of items in my inbox. You leave half an hour late with no extra pay even though you did almost an hour more of work.
You go to the grocery store. You see half the aisles are dedicated towards the care of jewelry. Jewelry cleanser, products to make them shine, jewelry boxes, armoires, etc. You see me going to one part of the store and getting a free cookie. All people with bangles get a free cookie. You get your items and head to the checkout. You see me with a cartload of food and jewelry cleanser. I take out my food stamps. See, even though we earn the same amount of money, the government recognizes how hard it is to care for an armful of bangles, so they give me a couple hundred dollars of stamps a month. You see high priced items in my cart. There’s even the luxury jewelry cleaner you could never afford. You look at your generic brand foodstuffs and coupons and sigh. Remember, your taxes support me.
You decide to go on a vacation. You book a flight to some nice warm island. People with bangles fly half-price and get their bag of peanuts faster. You pay full fare, again subsidizing me. Yes, I heard about your plans and thought it would be fun. In anticipation I jingle happily for the entire three hour flight. You give me dirty looks, but I just smile vacuously and jingle.
The hotel says if I stay one night, I get another free. You pay full price. Subsidy. You know the drill. We go to a theme park. I get in half price. You don’t. The vacation ends. Time to go back to work.
We return to work and there is a promotion opening. We both apply. I get it, even though I do less work than you, constantly call off, come in late, leave early. Why? I have an armful of bangles to support. You with your bare arms are just rolling in money, so this shouldn’t bother you.
Even with all these advantages, I still complain about how hard it is to wear all these bangles because my arm gets tired, but even though my arm gets tired, my bangles are the best bangles in the world. See, I have pictures of them on my desk and I talk about them all the time, and you just wish I’d talk about the news, or the game last night, or something other than these damned bracelets. (Much like people on the board in real life I bet.) Despite my complaints, one day I come in and BOTH my arms are now bedecked in jingling loveliness. Lovely, you think.
Now do you get an idea? It’s not JUST taxes. It’s how a choice, one that I have chosen not to make, costs me every day, all the time in more than just a tax refund.
I’m not the author, but I think this analogy is dead on.
March 7th, 2006 at 10:07 am
Indeed, Your bangle illustration is dead on. Key word “dead” he said snarkily, but accurately.
I could try to explain the point of a society needing to support child-rearing, but others, indeed even myself, have done so already in great, and sometimes painful detail. If you don’t get it by this point, then you either don’t want to, or cannot get it, or just possibly, I am totally wrong-headed.
March 7th, 2006 at 10:09 am
Anon at March 7, 2006 08:40 AM:
“The idea that the childless are somehow subsidizing parents would only be true if children produced some economic return for their parents. Also irrelevant”
No, it is the central point of my argument and the basis of the misunderstanding. If the question here was whether the childless were helping to maximize the pleasure that parents receive from having children you would have a valid point. The question that must be addressed however is not whether a parent receives the non-economic rewards of being a parent but if he come out economically behind, equal or ahead of an otherwise identical childless individual.
The “shared-resource” in the free-rider problem is not happiness that parents receive from having children but the future economic output of the child when he becomes an adult. In modern world, personal intergenerational flows of money are overwhelmingly from older to younger. Any parent can expect that they will spend far more money on their children than they will ever get back.
Institutional intergenerational flows of money, whether public or private, however, are largely from young to old. Take Social Security. (DON”T GET HUNG UP ON IT THOUGH AS IT IS MEARLY THE EASY EXAMPLE TO UNDERSTAND. THE SAME BASIC ECONOMICS APPLIES TO ALL FUTURE ECONOMIC INTERACTIONS!)
Sorry, where was I, Oh yes, Take Social Security. Future SS payouts to retires will come from paychecks of today’s children. The social security payouts are not effected by whether an individual had children or not. A parent, who spent huge sums of money on a child, and a childless stranger both have the same exact claim on child’s future social security tax payments. The parent receives no economic return from SS for all the time and money they spent turing a single cell organism into an economically productive adult.
Clearly, from the perspective of economic game theory. The best way for an individual to maximize their wealth (ALL OTHER VARIABLES REMAINING CONSTANT) is to avoid the cost of rearing a child in the short-term while collecting the economic benefits of the child as an adult in the long-term.
The free-rider problem also doesn’t require an all or nothing contributions. If the childless, pay 40% of the cost of raising children but receive 50% of the economic return whereas parents pay %50 of the cost but receive %40 of the return, then a free-rider problem will still occur. (Most real-world free-rider problems take this form. The progressive income tax creates a free-rider problem wherein people who don’t pay a proportional share of taxes are more likely to vote for increase spending and taxation.)
In order to torpedo my argument all you to show is that raising children will not make an individual less wealthy over the course of their life than remaining childless. If the same person would end up as or more wealthy with children than without then my argument would collapse.
March 7th, 2006 at 10:19 am
Mental note - Don’t ever get in the middle of an argument between the parasites and breeders.
March 7th, 2006 at 10:34 am
Behind the baby gap lies a culture of contempt for parenthood
In a society that values consumption, choice and independence above all, it’s a wonder that we have as many babies as we do
Madeline Bunting
Tuesday March 7, 2006
Guardian
—-
It’s all about me, the religion of ME!
Via Bros. Judd
March 7th, 2006 at 10:39 am
“Future SS payouts to retires will come from paychecks of today’s children.”
That’s hardly a convincing argument to anyone who has thought the matter through, and realizes that he’ll see Elvis before he sees a Social Security check.
March 7th, 2006 at 10:43 am
“It’s all about me, the Religion of MS!” You know, as opposed to the Religion of US”–the collective. Of course, we all know where the Guardian stands in that schism. Ooops, promised myself I was letting this go. I’ve got a life to lead (that is, if the collective will give me permission).
March 7th, 2006 at 11:00 am
Steve, why isn’t adoption an option?
March 7th, 2006 at 11:04 am
“Institutional intergenerational flows of money, whether public or private, however, are largely from young to old.”
Did somebody figure out a way to “take it with you”? Or has the custom of burning the deceased’s worldly goods in a Viking funeral pyre become all the rage?
Obviously, practically 100% of the wealth of the older generation (parents and nonparents alike) flows to the younger generation, one way or another — if not through payment for services rendered during the former’s lifetimes, then afterwards. That cancels out any “free rider” issue, even if one accepts the original analysis — any supposed extra wealth of nonparents increases the final wealth of children generally, and thus contributes to the support of *their* children.
March 7th, 2006 at 11:12 am
Hmm, your analogy falls flat simply because, bangles are not analogous to children.
Whatever platitudes you might have heard, children are indeed our future. All of those ’subsidies’ that you talk about are meant to help defray the cost of raising children. Apparently it does not do it sufficiently.
Imagine that there is a resource that is needed to continue life (which is indeed our prime directive as biological creatures). Say this thing is Corn. If people don’t grow corn, there will be no food, and people will starve to death.
So after about 3 months, if nobody grows corn, everyone is dead, goodbye human race. (In this example we are assume that corn is the only food, as children are the only continuation of the human race.)
So in this situation, the most just propositon, that is, the one that estimates the mean, wherein each social grouping of humankind is producing the share that is conisidered ‘fair’, which again is an amount of corn corresponding to their use of corn.
Say that growing corn takes a lot of time (takes away from the pleasure of living!) and costs a good deal of money, because perhaps corn seed, water, land, fertilizer, and pesticides are expensive.
Say for a moment, that at time T, each grouping of people is producing not just what they need but a small surplus. This is indeed the case with most things in a growing economy, as well as with a growing population– it creates more children than it needs to replace the dying.
After time T, certain individuals begin to discover that their production of corn, because of the interconnectedness between the human social groupings, has little to no effect on the availablity of corn. So they disconnect the notion of producing corn with the notion of continuing to live. Instead, they connect the notion of consuming corn (which they were doing anyway, but primarily they were producing it…) with living.
At this point, the arrangement is no longer just or fair. However, we should note that it is acceptable, and may still be considered just or fair if those individuals are for some reason unable to produce corn.
In fact, the surplus would exist to help defray the cost on society of those people who cannot produce corn. Such individuals should not be guilted for their lack of ability to produce corn– as an involuntary act we must not consider it unjust.
But those individuals who ‘take advantage’ of the surplus for their own gain will eventually eat up the surplus of corn (over time) and unless the corn producing individuals produce more corn (incurring more costs) to make up for this the societies (since i said they were interconnected) will eventually all become distressed because of the free-riders. In this situation, we are assuming that corn is not bought or sold, but distributed as needed. If corn is bought or sold then the issue is not the same. It is in this case a shared resource.
Imagine the same situation, but with the 3 months deathtime being like, 120 years, and the corn being children. Obviously there are differences, but we can see that while if we subsidize the creation of corn by giving special deals to corn-producers it will make life less enjoyable for non-corn producers, some non-corn producers wanted to not produce corn so they could enjoy life more, right? So that balances off. Too bad for them.
Like I said, those who do not produce corn because they cannot are easily as just (fair) as those who produce their share of corn.
Also, people who are ‘lazy’ and not because they can’t, but because of whim, decide to produce LESS corn, because it costs them money and as a shared resource there is no direct return other than being able to consume your own corn (I.E the small benefits parents get from children in our society- companionship, someone to drive them to the doc’s office when they can’t drive, etc.)
This goes a little further and almost says, ‘You aren’t having ENOUGH children!’
I digress- my point is not to suggest that we force people to produce corn (or have children as the case may be) but like all true philosophical discussions, a moral dilemma has been brought up for which all parties involved are to meditate apon.
A few things:
1. Just because you pay taxes, some of which help support children, does not mean that you are sharing the load at all. That’s like saying you contributed to public safety by not going to jail. Sure, if you had not paid taxes, or gone to jail, it would have had a negative effect (thus in a sense you are, by not doing so improving things) but the fact you are claiming that your abstaining from this as positive is more of a threat and an excuse than anything else.
2. Any solutions to the growing problem of having enough children to support a society that involve 1. forcing people to have children or 2. forcing people not to have children are in and of themselves highly suspect. In fact, a solution which FORCES a citizen to do ANYTHING is in and of itself suspect. Aside from paying taxes (which is the contract we sign by being born a citizen) and dying (the other contract we sign at birth) there should indeed be nothing we are forced to do.
This of course is not always the case.
For a solution, I would suggest that the government continue to act in the best ways of the American tradition– that is, offer incentives for positive behavior and disincentives for negative behavior. The key trouble is and has always been defining correctly the positive and negative behaviors. Since government is political, politics will often inform and define these supposed ‘goods’ and ‘evils’. Corruption could easily (and has) destroy any attempt to improve this situation.
Also, it seems to me that the only stable society is the one that is steadily growing. If we address the problem of birthrates/parenting, then we will eventually be scheduled to deal with the problem of where people can live (as China has.)
My hope is…
1. We will confront and not ignore these problems
2. These problems will NOT be ’solved’ in a collectivist, coercive manner.
Hope that added something to the converstion.
March 7th, 2006 at 11:21 am
The trouble with arguments like these is that they can be used to justify pretty much any kind of transfer payment. For example: