06 May 2015

The Market for Parenthood

Economics, Shameless Self-Promotion 28 Comments

I wrote a FEE piece responding to Abigail Hall’s argument for allowing cash payments in the adoption market, and I tackle Gene Callahan’s objection. An excerpt:

Right now, some human beings have the legal status of parenthood vis-à-vis other human beings. Right now, it is perfectly legal to transfer that status to another willing party. Right now, it is even legal to accept financial compensation to effect such a transfer, so long as it is limited to the expenses of undergoing a healthy pregnancy and birth. Right now, it is also common for adoptive parents to pay tens of thousands of dollars to private-sector brokers and government bureaucrats to facilitate all of the above.

The only thing right now that is illegal is to make a pure side payment (i.e., not tied to out-of-pocket expenses) to the party giving up the parenthood. This is the point on which the critics put all of their moral weight, arguing that it is here that “slavery” begins.

28 Responses to “The Market for Parenthood”

  1. GabbyD says:

    “To be truly consistent, the critics should prohibit not merely side payments; they should also prohibit compensation for pregnancy and labor expenses, because those too run into a slippery slope of yuckiness where it starts to seem as if a birth mother is being paid to produce a commodity for a client.”

    I dont understand this. you pay for the direct labor expenses only, not the (full) opportunity cost of having a baby.

    this ensures that you dont get pregnant for the purpose of profiting from it, because the full opp cost varies greatly depending on the opportunities you actually have.

    i.e. if ur actual opp cost is x and the prevailing/customary price is y>x, you will profit from it. is this incomplete?

    • Bob Murphy says:

      GabbyD let’s say there’s a woman who just found out she’s pregnant, and she works at a job she hates that allows her to just barely get by in a miserable apartment with no health insurance. She also was raised Catholic and thinks abortion is arguably murder, but she just doesn’t see how she can afford to have a pregnancy.

      Then she realizes right now it’s perfectly legal (in some states at least–check the link at my article) for an adoptive couple to pay for her health care for 9 months, and even her groceries and rent. (You can’t have a healthy pregnancy without good medical care, food, and a clean place to live.) With that option, she decides to quit her job and let the adoptive couple pay for her living for the next 9 months.

      That is halfway on the road to producing a baby for financial reasons.

      • GabbyD says:

        “That is halfway on the road to producing a baby for financial reasons”

        I dont get it. you start your scenario by ASSUMING she is pregnant.

        never in your story did she decide to be pregnant to sell her child.

        the point, i guess, is that you cannot be “half way” pregnant. its either you decide to get pregnant for money (with the intention of selling it), or you dont.

        to repeat: i dont see where the slippery slope is here. the key is that the true opp cost is greater than the financial cost of having a baby.

        the rule is trying to avoid making money the “tipping point” in the decision to have a baby.

        the only time this is not an issue is pure destitution by the mother, in which case, we should be alarmed that a person is willing to have a baby just to get any kind of money and medical care. we would have bigger problems which “selling of babys” would only mask.

        we should help that person get a better life right?


        • R. George says:

          GabbyD: the condition of pregnancy doesn’t effect the outcome of the example. Suppose all the conditions listed by Dr. Murphy existed, except instead of the woman already being pregnant, she is motivated to become pregnant to reap the benefits listed above.
          Your argument, in a nutshell, is about the individuals opportunity cost. If the actors conditions are so dire that strictly the incentives deemd ‘moral’ are effective in overcome the opportunity cost, then somehow the act is ethically indemnified? The act of providing additonal payments to the mother is merely raising the price to the market clearing price. That is the only economic difference.

  2. E. Harding says:

    This sounds like it could be easily turned into a front for child prostitution and pornography.

    • Keshav Srinivasan says:

      Good point. I’m curious how age of consent issues are dealt with in libertarian philosophy.

      • Harold says:

        As I understand it, Rothbard believed a parent may make any rules regarding a child that is living with them. “As long as you are under my roof you will do such and such.” However, that parent may not restrain the child from leaving to seek a better settlement for themselves. By acting to leave, the child has demonstrated that they have the necessary ability to make that choice.

        I presume that no-one could then interfere with choices freely made by that child. No-one could physically restrain the child, but would be permitted to offer incentives for the child to engage in certain activities. Possibly the offer of sweets, or the viewing of puppies would be appropriate.

      • Gil says:

        Libertarians wouldn’t set an age. It’d be like the olden days where children drank and smoked if they could afford it.

        • Scott D says:

          It is perfectly legal for children to drink and smoke now, in most states. What is illegal, at the national level, is for stores to sell them alcohol and cigarettes. That makes it more difficult for minors to get access to them, but we know how effective that is for a kid that is determined to drink or smoke. So I don’t see how the current system does more than offer token resistance. It is parents who (successfully or not) police underage drinking and smoking.

          The idea of age of consent is only a bit harder to unravel,. Coercion through force or deception is obviously flat-out wrong. If the person does not possess the mental faculties and social awareness to give consent for sexual contact, then this would be regarded as an assault. What happens in other cases is a source of debate, and different communities would likely approach the issue differently.

          For example, in one community, each case might be evaluated individually. If there was no deception and the individual in question displayed the knowledge and mental maturity to consent, that would be that. In another community, it might be ruled that consent is impossible below a certain age, but beyond that, an evaluation as above might be called for. In yet another community, anyone recognized as an adult by virtue of being economically and socially independent would also be recognized as being capable of consenting to sex, but someone still under the care of parents might be regarded as unable to give that consent, at least to another adult.

    • Tel says:

      Much easier to do it this way, directly under the watchful eye of local authorities. Don’t worry about fantasy maybe crime when so much real crime is happening:


    • Major.Freedom says:

      And nuclear war, don’t forget that.

    • Gil says:

      I suppose it’ll be deemed out in the open where it can be regulated since there’s an underground market for it anyway..

  3. Major.Freedom says:

    Slippery slope and spoiling the well fallacies abound in the criticisms against pure side payments.

    Good, honest philanthropic adults and their children are made to suffer because of fears that some other people who are not so good.

    It is sickening.

  4. Daniel Kuehn says:

    As I said on fb, I like this a lot.

    The one thing I don’t agree with is the line about how slave trade – given the existence of slavery – arguably improves that lot of slaves. I’d think quite the opposite is true (ever heard of “selling down river?”). The institution of slavery poisons the well because people who demand slaves are demanding the opportunity to exploit other humans. If you have a higher demand for slaves it’s likely to mean you have more scope to benefit from exploitation than the prior owners do.

    Thankfully, the institution of parenthood does not poison the well in the way that the institution of slavery does, so I think it’s still a weak point from Gene.

    And certainly I would add to this (though you may not agree) that proper regulation of this market to guarantee that parental arrangements don’t become more like slavery is a very good idea.

  5. Harold says:

    I don’t agree that to be consistent expenses could not be paid. There is a distinction between paying expenses and paying a financial reward. The issue is a practical one – we cannot readily measure the actual expenses, so in some cases the payments may be too high, and thus provide a financial incentive. This is a bug in the system, whereas if we allow reward payments it is a feature of the system. There is a distinction, so consistency does not demand the one if we allow the other.

  6. Harold says:

    Gene’s description of the end-point of the parent market seems accurate, but what is wrong with it? This reminds me of the Haifa day-care case. You are probably familiar with it from Freakonomics. Haifa nurseries closed at 4pm. Sometimes parents were late, of course, so someone had to stay behind. A an experiment, six out of ten centres introduced a late fine of about 2/3 of 1 hour babysitiing fee. Since people respond to incentives, and they would now have to pay for late collection that they had previously got for free, that would presumably provide a greater incentive to be on time. However, they found that late collections rose significantly. They did not fall once fines were removed.

    This overlaps with the discussion on the previous post about non-money valuations. One explanation is that people tried to get there on time out of regard for the workers at the nursery – they were not thinking in money terms but in terms of a social contract. As soon as a fee was introduced, it became a commodity to be purchased at a rate you desire. Also, “once a commodity, always a commodity” seemed to apply, so removal of the fine meant the commodity was offered for free, to be consumed as much as desired.

    The authors conclude that “the effect of a change in a clause of the contract may produce effects different from what might be expected from the assumption that ‘‘everything else is left unchanged””


    The question is, are we better off keeping some things outside the realm of money? Mises apparently thought so. The effects of the change in the “contract” between parents and children will be different from those that would follow if everything else is left unchanged. If we allow the market in parenting (or babies) our attitude to children may be irrevocably changed to view children as more “commodity like.”

  7. Harold says:

    Related to the slavery issue is the effect on supply. A market for slaves would increase the supply of slaves – which we generally agree is a bad thing. A market for babies (or parenting rights) would increase the supply of babies, which we may or may not think is a good thing. Adoption today places babies that the parents for whatever reason do not or are not able to look after with parents that want a child but cannot have one. The market would mean babies were created that otherwise would not have been created at all. This is not necessarily a bad thing, but we should think about it.

    From the original “modest proposal” from Boudreaux:
    “Fourth, I assume that the law prohibits resales of parental rights by adoptive parents. Once a final decree of adoption Is Issued for a particular child, that chIld’s adoptive parents may not resell their parental rights In this child.”
    How essential is that, and why should we assume this?

    Boudreaux is not for removing all regulation “Courts
    will still have to sign off on each adoption, allowing Judges to ensure
    the suitability of adoptive parents. Indeed, all prospective adoptive
    parents could be required (as they are now) to pass home studies
    before being eligible to contract with birth mothers.”

  8. rob says:

    Gene returns to the subject in his latest post – the flavor of which is captured in these quotes:

    “I happened upon this piece as I was contemplating the central lie upon which libertarianism is founded: that we are autonomous individuals. ”

    “beginning one’s reasoning with a lie cripples all of it, leaving libertarians flummoxed as to what could possibly be wrong with allowing a free market in human children.”

    I note that;

    He now apparently believes that libertarianism is not merely based on poor reasoning , or misinterpretations of the facts – but is plain based on a lie.

    He doesn’t explain why we are not autonomous individuals – just asserts it.

    And based on the assertion that libertarianism is based on the lie of us being autonomous individuals, he is able to further assert that any libertarian argument that there may be merit in a free market in the right to bring up children must be “crippled” and so presumably does not need to be addressed in a rational way.

    I’m starting to wonder if Gene’s posts are actually inspired by visions he gets from God during migraine attacks.

    • Grane Peer says:

      I wonder who is controlling Gene? If I had to Guess… SATAN!

    • Major.Freedom says:

      Callahan just asserting stuff?

      He’s so confused that he believes the concept of “lie” has meaning in a world where we don’t have autonomy.

      I can’t be wrong and I cannot lie if everything I think and do is past causally determined.

      Callahan is lying to himself.

      Evolution? There is nothing in evolution that says autonomous animals cannot evolve from previously non-autonomous animals. Callahan is just chaining his thoughts to the past and holding them as absolute, totally ignoring his present self.

    • Harold says:

      “He doesn’t explain why we are not autonomous individuals – just asserts it.”

      Some evidence is here:

      “That is, just as it is hard to reduce biology to the behavior of molecules, it is hard to reduce group behavior to individual psychology; in the words of Anderson (1972), ‘‘more is different.’’… However, it does suggest that models of collective behavior that are based solely on the behavior of a ‘‘representative agent’’ are seriously deficient (Kirman, 1992).”

      It sort of depends what we mean by “autonomous” We are clearly affected by those around us – no man is an island. If we view the behaviour of every individual as totally autonomous we get answers that are seriously deficient.

      Libertarianism has no way to account for these feedback interactions. Whilst in principle all interactions could be described as individual behavior, we lack that ability to do so. Similarly biology could be described as the behavior of molecules, but we lack the ability to do so. So if your prescription focusses on the individual only, you will fail to account for much behavior, and the outcomes will be different from expected.

      I would say that the idea we are autonomous individuals is not so much a lie as misleading given our current state of knowledge.

      • rob says:

        If that is what Gene means by autonomous then I do not think many Libertarians would deny that is true. They would however claim that they have a perfectly valid way of dealing with the “feedback loops” you describe – so its hard to see how this can be the “lie libertarianism is based upon”

        If people could act totally independently of each other there would be little need for libertarianism or any other political philosophy. We live in a world of scarcity and one where our actions have a direct impact on others. Libertarianism simply tries to show how co-operation rather than coercion is the way to optimize outcomes in such a world.

        • Harold says:

          If we assume society is made up of only individuals we get the wrong answers. I think the lie that he refers to is that the individual is all there is. It denies any emergent effects of groups of people. The above paper demonstrates that these effects exist.

          • rob says:

            If “the lie that he refers to is that the individual is all there is” then he is slandering the integrity of libertarianism based on a misapprehension of its framework (which is weird given own his background).

            Left libertarians in particular are very focused on the group and not just the individual. And the whole basis of libertarian ethics is surely about how conflicts are resolved within groups.

          • Major.Freedom says:


            “If we assume society is made up of only individuals we get the wrong answers.”

            No, we get the right answers, they just become more difficult to discern and require more reasoning than the easy “Society made me do it” excuse.

            The behavior that you deem as “emergent” in a social setting is not in any way impossible to describe correctly, by methodological individualism. In fact, even those who are most prone to denying individualism, end up depending on it anyway.

            • Harold says:

              “is not in any way impossible to describe correctly, by methodological individualism.” Do you mean impossible in theory or in practice?
              It is not possible at the moment, just as it is not possible to explain ecology by reference to molecules. All ecologists end up depending on the molecular theory of matter.

      • Major.Freedom says:

        That is not evicence for or against autonomy.

        Rejecting the denial of autonomy does not require us to think in some abstract term of “representative agent”.

        I can be autonomous, and unique.

        There is no failure to account for ANY activity in methodological individualism. Indeed, the whole approach is structured on the conviction that any and all human behavior is fully and completely described by what is going on in the minds and bodies of individuals.

        There is no human behavior that is not determined by individual activities and behaviors. No activity is ” failed” to be understood or described by individualism.

        Our current state of knowledge is not that we are autonomous. That very statement of “our” knowledge is spawned from the a priori theory that you are not autonomous.

        • Harold says:

          “Indeed, the whole approach is structured on the conviction that any and all human behavior is fully and completely described by what is going on in the minds and bodies of individuals.”

          Lets say I am convinced that the behaviour of all animals can be described by what is going on with the molecules that make up their bodies. I also choose to use ecology as an way to study and explain animals’ interactions. These are not incompatible. How could it possibly be said that the movement of the lion could *not* be fully described by the movement of every molecule in the lion’s body? They are the same thing. I can choose to study muscle fibres, and can find out the conditions of molecules required to make the fibre contract, and explain the contraction in molecular terms. I can make it do so in a dish. Yet somehow, study of the system as an entity, rather than as a collection of molecules, allows me to explain things that cannot be explained at the moment by reference to the molecules.

          Collections of people may behave in ways that I cannot explain by reference to them as individuals. That does not in any way deny that they are individuals any more than ecology denies that lions are made of molecules.

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