The Economics of the Baby Shortage

Richard Posner and Elisabeth Landes wrote this excellent paper in 1978, but I’m only now seeing it. It speaks of the terrible inefficiencies — pervasive shortages and surpluses — that come with state adoption agencies and their price controlled system of allocating the right to raise children. They address all the usual objections to a market for children and generally provide enough evidence to lower the temperature of the debate and introduce some rational thinking here.

In passing, they point out that a real market for child-rearing rights would probably end the practice of abortion or perhaps seriously curtail it.

Wow. When was the last time this point has been made an a debate on abortion? I’ve been thinking through it for years but never actually seen it discussed before. But it is really a no brainer. Why are value resources being tossed away when there are plenty of people out there who clearly want to use them? There is an intervention in the market process, and that intervention concerns the market for child-rearing rights. If we had an open market that allowed for payments to expecting mothers, the decision to abort would carry a heavy opportunity cost. Right now, all the cost is associated with carrying the baby to term.

This is the kind of libertarian research that could make a huge difference in the world. This paper came out in 1978. I see it as compatible with Murray Rothbard’s views on child rights. Don Boudreaux wrote along the same lines. If anyone knows of other work in this area, I would love to see it. It seems that more work needs to be done in this area.

I once asked an anti-abortion activist whether he would favor a market for children if permitting one could reduce the number of abortions by half. He quick answer was no. I asked him to clarify: are you saying that it is better to be dead than traded? Yes was his answer.

That’s interesting to me because the current adoption market is already rooted in the cash nexus and trade. The problem is that it is seriously hampered by monopolization, regulations, and price controls.

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  • This is a topic I’ve never thought about, but should have, asthis subject relates to me at least indirectly. My mother was a “black market” baby. She was sold a few months after her birth. If not for the “illegal” actions of her biological mother and her adopted parents, she would have been put in an orphanage I and my brothers and sisters wouldn’t exist.

  • As a “black market” baby myself I am extremely pleased this debate is taking place. Keep the state out of people’s lives – yes or no?

  • Good gracious, this is a fascinating topic. The premise explored here–that a free market for unwanted babies would result in more of them finding parents versus being aborted–is something I too have never considered. I suppose one could, in a knee-jerk fashion, be taken aback by the thought of a “market for babies” but the truth of the matter is this: We already have one. Attempted control of that market results in both seen and unseen consequences. Abortions are an unseen, i.e., not obvious, consequence of controls on the market for babies? Wow. Freakonomics, anyone?