Happy birthday to our 7 billionth fellow earthling, who, according to most estimates, is due to be born today.
Welcome to the earth. Congratulations on being born in the 21st century, where the odds are excellent that you’ll live a richer, more prosperous and more fulfilling life than almost any of the 100 billion or so who preceded you — and paved the way for your prosperity with their investments and their inventions. Would that there had been more of them.
As you go through life, you will almost assuredly contribute to the world’s stock of ideas, diversity and love in ways your parents never contemplated — which is why the rest of us are a little sad that you might be their last child.
There’s certainly such a thing as a population that’s too large. Nobody disputes that. The interesting question is: Given the incentives faced by parents, it the population size we actually get too large or too small? And there are good reasons to think it’s too small.
In fact, population growth is a lot like pollution in reverse. Polluters don’t care about the damage they impose on strangers, so they pollute too much. Parents and potential parents don’t care about they joy and prosperity their chidren bring to strangers, so they reproduce too little.
When you’re older, maybe you’ll want to understand these arguments a little better. If so, you might want to read Chapter 3 of my book More Sex is Safer Sex. Or, if reading has gone out of fashion by then, you might want to watch the first video on this page. You’ll have to sit through eleven minutes of talk about sex before you get to the part about population, but I’m guessing sex will still be an interesting topic in twenty years.
Or maybe you’ll have no interest at all in this issue. But I’m guessing you’ll have some interest in something and that both friends and strangers will have reasons to be glad you did. when Baby Eight Billion comes along, the world is likely to be an even richer place, thanks partly to you.
生日快乐！
There may, of course, have been more than one, or even several 7 billionth persons.
What’s the expected number? And what’s the chance that one of them will read this blog post?
The chances are good that none of them will ever learn English. Even if one did, and even if he or she stumbled upon Landsburg at some point in the future, odds are he or she won’t be a sufficiently die-hard fan to read back years into the archive. So Steve, if you’re really serious about this and are not just using a literary technique, I recommend occasionally linking to this post starting about five years from now (if you’re still blogging then).
You could also read this article.
Oh yeah, I remember a criticism I have of something in that article:
This and similar arguments fail to consider substitution. If none of our current friends and/or partners were born, it’s very likely we would instead have different friends and partners. Would we be better or worse off? On average, about the same, maybe slightly worse off for having fewer choices (as I doubt that having 7 billion in the world has made it appreciably easier to find people with similar interests as 6 billion did).
But a sizeable number of people are decidedly below average in their niche, e.g. the men who will sweep the young ladies off their feet despite later turning out to be decided duds. Had these men not been born, said young ladies may instead have been swept off their feet slightly later by much worthier men. If you think you may be disproportionately likely to produce offspring with that sort of trait, that’s a line you can tally under “negative externality”.
That post does not mention the rising marginal cost of babies being born, which is the main issue people have with our rising population.
The chances are good that none of them will ever learn English.
More Sex is Safer Sex is translated into many languages. I mean, it’s even more uncommon for a book to be translated to European Portuguese than it is to Brazilian, so I am guessing the book is widely translated.
This and similar arguments fail to consider substitution.
I think a better counter-argument to Landsburg point is the simple observation that romantic relationships are not perfectly positive-sum. If the guy who got the girl wasn’t born, one of the other guys chasing the girl would. Maybe more people improves search costs (albeit I doubt it, judging by the fact people settle later, increasing rates of infidelity, etc), but Landsburg made no such argument.
Bradley Calder = brilliant!
Given the number of people that are born and die each day what are the error bounds like on the actual day of birth?
As mentioned above it’s also entirely possible that more than 1 person is born and immediately after this there are exactly 7 billion people (because someone could die between these births. What’s the expected number of “7 billionth” births?
“Parents and potential parents don’t care about they joy and prosperity their chidren bring to strangers, so they reproduce too little”
This is likely an “infra-marginal” externality and therefore not an externality.
James P:
That post does not mention the rising marginal cost of babies being born
Well, it doesn’t mention it explicitly, but it makes use of it. I think most readers of this blog were able to fill in that detail for themselves.
Neil:
This is likely an “infra-marginal” externality and therefore not an externality.
Since I don’t know what you mean, perhaps you can clarify: Is pollution also an infra-marginal extrenality?
“Parents and potential parents don’t care about they joy and prosperity their chidren bring to strangers, so they reproduce too little. ”
Parents also don’t much care about the harm the children bring to strangers. So doesn’t the question just boil down to: do children generate more pleasure or displeasure for strangers? (since strangers are the people on whom the parents don’t care about the children’s impact). But given concerns about competition for water and other resources, it is not at all clear to me that each marginal child brings more pleasure than displeasure to non-family members. (And you can’t count his friends too heavily, since if it weren’t for his existence, his friends would have found someone else to hang out with).
“But given concerns about competition for water and other resources, it is not at all clear to me that each marginal child brings more pleasure than displeasure to non-family members.”
Whenever I see a driver cut me off I confess I inwardly curse him, rather than seeing him as part of the market and production system whose economies of scale make it possible for me to be driving in the first place. But he is. The marginal utility of children up to now is positive; you need to make a good case that suddenly and for the first time it is now negative.
@Steve: An inframarginal externality is one which exists in total but not at the margin (this is standard terminology so it can be looked up.) In a population which is unduly small for some reason it may well be there is an external benefit to adding an extra member, but this need not be true at a larger equilibrium population. Forinstance, when starting out on a networking site, my adding a new connection may benefit my existing connections (externality), but not once the site is mature and everyone has sufficient connections.
“Parents also don’t much care about the harm the children bring to strangers”
My thought exactly. What about the extra traffic and other congestion, environmental pressures, or use of scarce resources?
Certainly, the social contributions of some people make the world better off. And, just as certainly, the social contributions of others make the world worse off–in a year and a half in the town where I attended university (Santa Cruz), I found a heroin needle in a park where families walk and play, there were people who dumped their RV sewage into a state park creek, and congestion was the norm. A drunk driver killed a mother who had her son in the car, gang members exchanged shots on the highway, and anarchists rioted and broke storefront windows (none of this is exaggerated in the slightest, and other unmentioned crimes certainly happened).
So, my questions for Professor Landsburg: Why say that the hypothetical positive externalities of more people imply that people have too few kids without similarly discussing the negative externalities? Wouldn’t a reasonable analysis include both the social costs and benefits?
Why is there too little children produced per couple (at least in industrial countries, the average is mostly below 2)?
My theory: people have children because they are seeking the utility of the “joy of parenting” (define to your liking). But, quite a lot of this joy can be supplied by only one child and most by two. There is a “diminishing return” from having more children, while the associated cost is growing almost proportionally – so there is equlibrium which I suspect is about 2 kids – and this is with couples who are able and willing to produce kids at all (by far not all people belong into this set).
There is another twist: in the developing world, the female is much less empowered when it comes to reproduction decisions – and the cost of parenthood is (I suspect) disproportionally on her shoulders. Therefore the equlibrium in “less developed” countries is at a different, much higher number of children.
My conclusion is, as the world becomes universally rich, the average number of kids per couple will keep falling – up to the point where the mankind might eventually die out. This is not going to happen though, because the world with too little people will become poorer and the number of kids may go up again etc, some kind of oscillation…
For simplicity I have totally omitted the influence of religion and other manipulative, “non-market” influences
@Maznak: Joy_of_beer + _joy_of_sex > joy_of_parenting
@ Jonathan Campbell
I agree with Steve. As an example, just think if the parents of the “hot” chick at school had even more girls. Wow. That’s a lot of value — not just economic, but existential value.
Or, in econ-jargon: Parents/potential parents produce kids to serve their OWN demand. The fact that their kids may (and likely will) serve other’s demand doesn’t enter into the equation – at least, not during the period that it might influence production decisions. So we have a market failure, and arguably an opportunity to develop policies to achieve a Pareto improvement.
But what policy? Specifically, could we tweak market forces (reinstate the dowry?) to achieve optimal outcomes? Or if we subsidize kids (more than we do already), how do we measure the magnitude of the appropriate subsidy? What feedback mechanisms would we need to adjust the subsidy’s size to reflect changing circumstances?
And who should be entitled to the subsidy? Child production involves labor, but not necessarily skilled labor. Consequently the US has outsourced a substantial part of its production to developing nations. But often people argue that the foreign goods are not perfect substitutes for domestic goods; for example, the US Constitution discriminates against foreigners for purposes of selecting a chief executive. Would optimal public policy discriminate in a similar fashion?
Or is there really any market failure at all? Perhaps parents/potential parents make socially optimal decisions given that child production is a capital-intensive business with high barriers to exit. After all, today there are 14 million Americans that may be bringing joy and prosperity to someone, but who are failing to report gainful employment to the US Bureau of Labor Statistics. If Landsburg favors parents producing an extra kid to meet society’s demand, does Landsburg favor society paying to maintain the kid when that demand fails to materialize in a monetizable form?
I think there is a minimum requirement for each child to be a positive contributor, in terms of education, healthcare etc. I fear there are parts of the world where extra children are not providing their potential benefits for the rest of us, maybe because they die at an early age, or have insufficient education or resources to invent anything or make investments.
The world population may well be too small, given the resources available. Since the resources are very unequally distributed, it is likely that local populations are too high in some locations.
Cultures with large families and low investment in education can be stable. So can those with small families and high investment in education. The world may be able to support the former, but generally the small family model is considered preferable. Government policies which promote this are often used, such as child labor laws. Perhaps, once societies have reached a stable “small family, high education” model, policies which encourage larger families are necessary to redress the shortage of children.
Modern western societies pretend that men and women are equal, but nearly all the child care is provided by women. This makes it impossible for women to compete in the labor market and also have children. Women are choosing to have fewer or no children in order to compete. We all pay the price because there are too few children born. This could be remedied by equal opportunity laws, recognising the sterling work women are doing for society by rearing children. This may have some cost, because it will require employers to take on a woman with slightly less direct work experience than a man. The level of regulation needs to be set to balance the societal cost of too few children with the cost of slightly less experienced workers. This seems to me to be a very strong argument in favor of equal opportunities legislation, and one perhaps not widely acknowledged.
A large component of the external cost/benefit of another child falls on the child herself/himself. So, what’s the average amount people value their lives, as evidenced by the spending on healthcare, gym membership, safer cars, home security, etc?
Mike H: Roughly $10 million.
“Mike H: Roughly $10 million.”
US centric. Since we are talking about the world population, it should be noted that Steve’s answer is correct for the United States, but not for countries with lower incomes. In Africa, I doubt that it is $100K using the same methodology by which the $10 million figure is calculated.
Doesn’t this positive externality mean that new parents in the US should receive millions of dollars in subsidies? Or that the government should legislate to indebt kids to their parents for as long as they live? ;-)
@Jonathan : I get about 2.33. And there’s only about a 43% chance that the 7 billionth child is unique. See my latest blog post for details (Either click on my name, or it’s in the list of PingBacks at the end of this comments thread)
To what extent should we subsidize kids? And, specifically, how?
[Regarding the cost of health care, b]oth the subsidy for our [middle-class] son and the expenditure for our [foster] daughter expand the scope of the federal government, and both impact the deficit in the same way. Yet when the time came to strike a deal over taxes and spending in order to increase the debt ceiling in August, the expenditures that support the children of the poor were on the table while the expenditures that support the children of the middle class and wealthy, thanks to the unwavering insistence of Republican lawmakers, were not.
As the “super committee” goes to work, the same story is set to be repeated. The White House successfully insulated Medicaid from the “trigger” mechanism that will produce automatic cuts should the committee fail to reach an agreement. But in that scenario every other program for poor children will get hammered, from WIC to early childhood development assessment. At the same time, plummeting federal aid to the states will tempt state-level lawmakers to cut into their half of the Medicaid spending formula. Either way, the interests of poor children—and the tools that make modern foster parenting possible—are coming to a dangerous pass.
* * *
Foster parenting teaches us how to live as so many low-income families already live—check to check, coupon to coupon, appointment to appointment. The difference is that most foster parents hold middle-class passports, and they can cut short their sojourn among WIC recipients and Medicaid administrators at any time. No one knows what exactly will happen to Sophia and the nearly half-million kids in her situation if they exercise that privilege. If Republican lawmakers have their way, we may well find out.
@Mark:
“Wouldn’t a reasonable analysis include both the social costs and benefits?”
Steve wrote “As you go through life, you will almost assuredly contribute to the world’s stock of ideas, diversity and love …” Sounds like an assertion the benefits will probably outweigh the costs to me. Why doesn’t it sound that way to you?
Ken B: SL may believe that benefits outweigh the costs, but an assertion is not an analysis. I can just as easily assert the opposite: as you go through life you will add to the worlds pollution, congestion and overcrowding and consume scarce resources. Since parents do not care about the costs you will impose on others, they will produce too many children.
Unless you can demonstrate that the benefits outweight the costs you cannot conclude that there are too few children.
Personally, I agree with SL that in the developed world the benefits outweigh the costs. I am not sure this is true everywhere.
“As an example, just think if the parents of the “hot” chick at school had even more girls.”
The neo-malthusians are not bed-wetting (so to say) about future hot chicks but about dark skinned ones. All the contrived sustainability and carrying capacity BS to excuse their bogus overpopulation hysteria are just that, excuses.
Steve and no one else will address this point, but I will repeat. it has nothing to do with whether benefits exceed costs in total, it has to do with whether benefits exceed costs *at the margin*. Benefits exceed costs–that is why there is consumer surplus. But consumer surplus does not imply externality. There is externality only if benefits exceed costs at the margin.
Neil:
There is externality only if benefits exceed costs at the margin.
This is of course absolutely correct. But if every child, over the course of his/her life, can be expected to generate a few valuable idea for people outside his/her family to copy, then there is in fact a positive externality (which might or might not, of course, be balanced out by some negative externality).
We can agree that activities that add to knowledge have a positive externality (if the one who adds to knowledge cannot fully appropriate the benefits.) I disagree that this translates into more people more knowledge.
Look around the world and you will see an inverse relation between fertility and knowledge creation. People do not spring to life ready to add to knowledge. To add to knowledge, one first must be brought up to speed on the knowledge that already exists, and as the knowledge stock gets larger and larger this requires greater and greater investment (education).
In simple agrarian societies, people can get by with 6 or less years of education, while in complex knowledge driven societies we must invest 16 or more years. A very expensive proposition per child.
It is the old parental quantity versus quality trade-off in children that we are talking about here. At the level of a society, do we want to subsidize more education and knowledge, or subsidize more people? The former addresses the externality, not the latter.
The guy whose sole desire is to surf, dive and climb Everest alone has no use whatsoever for all the breeding, which will only serve to detract from his pleasure. He should not be forced to subsidize the breeding.
Still, I await the birth of the child who figures out a cheap way to spread contraception through the world’s waters. In the meantime, we are being overrun by feral cats.
I think this is him;
http://canadianfoodforchildren.org/homepage-pic-starving-baby.jpg
He is starving and has HIV but yeah Happy Birthday!
Hopefully he or she will have food and water left after all these people waste and restrict precious resources in fearing the cooperative efforts of their fellow man and seeking to undermine possible cooperation with selfish attempts to strike personal claims and/or social claims to centrally plan who or who should not live.
Julian Simon has a similar letter: http://manuelalvarezlopez.blogspot.com/2011/04/earth-day-spiritually-uplifting.html