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I once attended a brilliant speech by Steven Landsburg [2] in which he suggested that one of the most plausible real-world examples of market failure in modern market economies involves child-bearing decisions.
I’m working from memory here – Landsburg’s talk was five or six years ago – but I believe that I recall his main points accurately enough. Landsburg argued that decisions to have children in market economies generally produce positive externalities. That is, the net benefits enjoyed by each set of parents of having and raising children are so low relative to the benefits that each raised-to-adulthood person bestows on society that parents have ‘too few’ children.
(Addendum: McKay Curtis kindly found for me the Slate column in which Landsburg spells out his ideas on this matter. Here it is [3] — well worth a careful read.)
Landsburg’s talk was Simon-esque (as in Julian Simon). It was inspired by the insight that the free human mind is the ultimate resource. More people in a free society mean more creativity, more discovery, more problem-solving, more effort, and a deeper and more productive division of labor. In short, more people in a free society mean more resources and higher living standards.
Yet the value that Suzy adds to this productive engine is only poorly captured by her parents. This fact is regrettable because Suzy’s parents bear almost all of the costs of raising her to responsible adulthood. The proximate result: too few Suzys and Bobbys and other people created and raised in market societies. The paramount result: too few resources created.
(Fortunately, market economies have so many other strengths that they can survive this ‘market failure.’ For this reason, among others, I emphatically reject – as I suspect Landsburg rejects – any government intervention aimed at remedying this ‘failure.’)
So I was very happy to learn from this new study [4] released by the xenophobic Center for Immigration Studies [5] (CIS) that immigrants to America are having lots of babies on these shores. Indeed, immigrants are having babies in America at a higher rate than are non-immigrants in America. CIS regards these immigrant children as regrettable; I regard them as a boon.
Speaking as someone who knowingly behaves selfishly – I have only one child and plan to have no more – I offer special thanks and praise to immigrants who not only work especially hard here in America but who also are creating and rearing ‘ultimate resources’ that will benefits us all enormously when they reach adulthood.