Economic theories (39)

It is in your genes interest for you to have children. Furthermore, most parents find their children a source of pleasure, so worth the cost.

Apart from affection towards their parents, it is in childrens' interest to look after elderly parents because it establishes social and familial practices that mean the children too are likely to be looked after when they become old.

International man of mystery
Keep calm dear, its only a web post

In your above example, Firm A can presumably pay its workers less than Firm B can. Whether or not B out-competes A would depend upon how much less A can pay its workers and how high the costs of allowing your workers to have children are.

Possibly the wages of the 2 sets of workers adjust until the goods produced by the 2 firms are equal in price.

(I think, haven't done economics in a long time)

Da Vinci was a well known sexual deviant. You know that sketch of the naked man in the wheel? Blueprints for a rape machine.
~~~
snowboarding FTW

I actually worked for an organisation once where the Head of a Dept (of about 400 staff) was of the view that the best staff to have in senior positions were men who were married but didn't have children and preferable had a stay-at-home wife. Women and parents tend to be too humane and not tough enough. Married men were better than unmarried ones as they tended to be more stable, had emotional support at home and tended to have fewer days of sickness.

It was a bit chilling. Soon after he took over, various women who had climbed the ranks seemed to leave for various reasons.

Quite agree - from a purely economic perspective (which is a very perverted and one-dimensional one), it's better not to have your own children but to get the benefit of oter's children, e.g. keeping an economy going, providing affordable goods and services and paying taxes when you're retired.

(A bit like immunisation; the best situation for a selfish person is for everyone else to be immunised so diseases can't spread, but to opt out yourself because you'd rather be earning money than taking time out to be immunised).

Ubi caritas et amor, Deus ibi est. http://www.informedconsent.co.uk/posts/226772/

*nods* I went in that direction myself.

The person who I was replying to was pointing out how silly economics is when it's used as a theory to predict people's behaviour. I was trying to illustrate that point by applying it to childcare. Effectively, what it means is that I made one extra assumption in addition to the free market ones: that only material goods make people happy. By pointing out that other things make people happy and therefore change their behaviour, you have identified that flaw and that extra assumption.

There is a way to fix it again so that the free market works as a predictor of human populations, which requires understanding that something like the affection you mention is property owned by people. Then that affection becomes managed by the free market as well, and a person's happiness is a sum of their material wealth and their social wealth. Once more, the free market solution is the socially optimum solution. Although, personally, I think affection is probably more treated by a free cooperative than a free market. Still, the principle is the same.

(Admitting that other forms of wealth exists and therefore other types of markets was the second assumption I made to model the Credit Crunch.)

In a true free market where one floats or sinks according to individual or family effort I suggest it is in your ECONOMIC interest to have children. Lots of 'em.

Edited 21 Mar 10, 9:56 AM by gaynor_payne

No, I did not assume a UK-like economy. I built my assumptions from the ground up completely unfettered by reality. Using three free market assumptions (property rights, price controls and competition) and one extra assumption (that people's happiness is directly proportional their material wealth), I have showed that having children isn't in your economic interest.

I'm interested in you backing up your statement with evidence. It would be helpful if you could derive your free market from the ground up (this would highlight any problems in our respective definitions of free markets, I freely acknowledge there are different formulations) or point out the flaw in my chain of reasoning that renders it unusable. I hope that I have made my reasoning simple enough to make it easy to do so.

and

and

Edited 21 Mar 10, 11:18 PM by gaynor_payne

On the contrary. It's amazing how far you can get when you strip away a load of stuff, assume a few simple things and find out that it relates to reality in such and such a way and not in such and such a way.

Meh, that was me trying to be concise (I was summarising them in brackets after all). I didn't mean price controls as in government controls on price, but price controlling supply in response to demand. Having said that, I'm fairly sure that's what my economics books summarises them as.

Yes, we all know its true, but someone should tell the economists that. Besides, if you don't make that assumption, then you can't assume that the free market makes people happiest and then you can't remove regulation, government and various things that people wanted gone when times were good.

You still haven't pointed out a flaw in my argument, or given a counter-argument.

To be mathematically clear, I have argued that the material cost to make a good is

p_m = m + /eta_{ms} s

In words, the price is equal to the material cost to make something (m) plus the externality of transferring resources from production to childcare /eta_{ms} (I think of childcare as a social activity, so I lump it in the social economy, that's why there's an s) times the amount of childcare happening.

I think that /eta_{ms} is a positive number (that is, childcare costs materials that could otherwise be used making a good, which is obvious as children needs food, clothing etc.). Therefore, any childcare (s>0) incurs a cost and makes p_m greater. Therefore, by the third assumption of the free market (competition), I conclude that the lowest priced good can be made only if s=0. Therefore, childcare is economically bad. I didn't even have to assume that only material goods make people happy to show that. Hmm, I probably needed the happiness assumption for another point I made elsewhere.

If s = 0 and you cant produce for some reason what happens then ? Especially as old age approaches you !

If your particular production runs into dificulties , say over supply because of competition, then it should be easier to diversify when s is not = 0.

Having s = to a large number, ie a family enterprise means that many more goods may be produced. The increased sales/barter capability would be much greater than the propensity of the children to consume.ie the costs of the children to that business.

It is true that in infancy children represent a cost but with a large nuclear family other 'maturish' children would easily offset that cost.

You also assume that children do no more than contribute to one particualr business activity. In a harsh free market they would have to do lots of things that improve the quality of life of the family. Take dogs out hunting. Collecting firewood. Helping build things.

Dont get me wrong many children are a complete waste of space behaviourily but that may be attributed to the excesses of a welfare state.lol In a real free market things would change, radically.

Which raises another point. Children could help in defense matters which would contribute economically.