(1) A lot people don’t understand that free-rider is a term of art within economics. Its a technical term, not a pejorative. Free riding is an economic effect, not a choice. In this context, there are many people who are eager to assume the burdens of child rearing but for a variety of reasons cannot. Morally they are not free-riders but economically they are. Every working person contributes to the economy to the benefit of everyone, but a free-rider problem occurs when a subset of the population shoulders the cost of a resource that is communally shared. I argue that is what has happened with child rearing.
(2) Like the tragedy of the commons, free riding feeds on itself. In the tragedy of the commons, each individual tries to consume as much of the common resource as quickly as possible because they presume that everyone else will do the same. Anyone showing restraint will lose out. Free riding is the exact same phenomenon, except that instead of consuming a resource, people try to avoid expending a resource. Each person has a motive avoid paying because they presume that others are also avoiding paying. Anyone who does pay loses out. Over time people choose the free ride even if everyone knows, intellectually, that every one will be worse off for doing so. As the childless grow richer and parents grow poorer more people will choose to be childless.
(3) For purposes of this discussion, we should think of economically productive adults as being a commodity or resource which the economy must continue to produce in order to survive. Think of them as robots instead of human beings. The free-rider problem occurs because people who do not spend the resources to create the robots get to benefit from the robots’ output just as much as do the people who built them. In this case, where is the incentive to build robots?
(4) You can identify a free-rider situation by asking, “what would happen if everyone took the suspected free-ride?” If everyone maximized their own short-term economic self-interest and avoided the cost of child rearing, the economy would collapse. Conversely, if everyone contributed equally to the cost of child rearing it wouldn’t. Clearly, avoiding the cost of child rearing offloads an economic burden onto someone else.
(5) Many childless commentators think they should get credit for paying taxes to help raise children other than their own. However, paying taxes for other people’s children doesn’t have any effect on the free-rider problem unless the taxes completely flatten the differential between people of the same income potential who have children and those who don’t. To prevent the free-rider problem from occurring an individual would have to incur the same cost whether they had children or not.
Most childless commentators are seriously delusional about the amount of taxes they pay versus parents. They seem unaware that parents pay all the property and sales taxes they do and receive only trivial breaks on income taxes. The federal child-tax credit is a whopping $1000/year. The USDA estimates that it costs a middle-class family $170,460 to raise a child to age 18. So, even paying an extra grand a year in taxes, a childless couple would still come out $152,460 ahead.
If the childless couple invested the money that they saved every year by not having a child they could clear $215,396 after 18 years at a 4% return. So, parents come out $152,460 in the hole and the childless come out $215,396 ahead. Does anyone think that a delta of $367,856 won’t affect the choices that middle-class people make? That is not even counting the non-monetary losses in time and freedom.
(6) I am surprised at the number of commentators whose default view of children is highly negative. They seem to see nothing in children but criminals just waiting to put on enough mass to go on a real rampage.
(7) Even though about half of the negative commentators were screamingly hysterical that I was recommending that they all be marched off to the breeding centers, I made no policy recommendations. I am not even sure that any need to be made. I certainly have no interest in forcing people who do not wish to be parents to do so. I am concerned, however, that we are making parenting increasingly undesirable because it is so expensive.
If I had to recommend policy I would say that since we can’t really make children’s future income a form of property, the only solution is to reduce the cost of raising children, and I think the major costs these days come from collectivism. Socialist Europe and blue-zone America are the most child-hostile regions and they are also the most collectivist. Collectivism makes everything more expensive and more time-consuming to get, which drives the cost of child rearing that much higher.
Collectivism erodes the cultural underpinnings of successful parenting. Collectivism encourages individuals to think of themselves as consumers instead of producers. Collectivism encourages a play today, let somebody else pay tomorrow, mentality. Collectivism encourages people to think of life in terms of material rewards. None of these traits is conducive to the mindset of a successful parent.
(8) We all need to remember that economically productive adults don’t just happen. Parents invest a great deal of time and money to create them. However, in the modern era, parents do not receive any significant economic return. Parents benefit economically from the productivity of their adult children at about the same level as do total strangers who shared little in the cost of raising them. This creates a classic free-rider problem
The existence of the free-rider problem in child rearing should be a flashing warning signal to everyone that a potential problem does loom. We have a situation here where the production of the single most important resource of all (indeed arguably the only true resource), human minds, is being increasingly economically penalized. If we found a similar free-rider effect in any other economic arena we would definitely be extremely concerned.
[Update 2006-03-06 16:55:42: Just another attempt to clarify. The free-rider problem does not arise because of a conflict between subgroups within the population, in this case parents versus the childless, but rather between two CHOICES that INDIVIDUALS make, in this case to-have-children or not-have-children.
The free-rider problem arises when the ECONOMIC input of each choice differs but the ECONOMIC output is the same. In this case, the ECONOMIC input of the choice to-have-children is much higher than the choice not-to-have-children, even though the ECONOMIC output of both choices are identical.
An INDIVIDUAL, seeking to maximize their ECONOMIC wealth in the future should make the choice not-to-have-children. They are technically free-riders because they will receive the same ECONOMIC benefit from the next generation of children as an OTHERWISE IDENTICAL INDIVIDUAL who made the choice to-have-children.
The argument that parents derive great NON-ECONOMIC utility from their children and that this compensates them for their ECONOMIC losses in a MORAL sense is undoubtedly true to a great extent. It also completely irrelevant because the free-rider problem doesn’t deal with non-ECONOMIC utility.
The free-rider problem isn’t a statement about morality, politics or philosophy. It is a statement about how ECONOMIC inputs and outputs of different choices in certain specific ECONOMIC conditions effect human ECONOMIC behavior. ]