Sunday, January 4, 2009

The Economics of Reproduction

Consider this, if every woman on planet earth has two children, the human population will essentially flatten to a constant (it would decline very slowly). For the sake of this discussion, let us define human survival as "replenishing the current population" - neither increasing nor decreasing it. Survival is achieved exactly when the human population does not decrease. On this view, let's think of two children as a woman's "expected contribution" to human survival. Of course, this is a fantastical criterion, but note that our genes are obviously hardwired to maximize reproductive success to assure survival. If they were not so hardwired, we would not be here today.

For each woman who chooses not to contribute her two children, some other women must pick up this burden if the human population is to be replenished. If half of all women were to choose to have no children, the other reproductive half would have to have 4 children on average in order to ensure human survival. This is a significant additional burden to the women who pick up the reproductive duties because pregnancy and childbirth is incredibly difficult.

Because human reproduction is highly asymmetrical, with the male contributing very little effort and the female contributing a great deal of effort, the situation is not the same for men as it is for women. Let us start with an egalitarian distribution of reproductive "duty" for men - fathering two children is a man's "expected contribution" to human survival. But for each man who chooses not to give his expected contribution, the additional burden placed on the remaining men is very small, from a biological point of view. Let's say half of all men chose not to father children. The remaining men would be responsible for fathering an average of four children to ensure human survival. But fertilizing a woman four times is hardly more difficult than fertilizing her two times. There is essentially no additional cost to the other men (biologically, not economically).

Because of the massive cost differences between men and women in the process of reproduction, men are more "disposable" than women. That is, each woman's contribution to human survival is far more important than each man's contribution to human survival.

This disposability manifests itself in human history and male social roles. In general, it is men who fight wars, defend property, work high-risk jobs and so on. As Miller and Kanazawa explain in their fascinating book on evolutionary psychology, Why Beautiful People Have More Daughters, men have more to gain by taking risks and more to lose by not taking risks, and this is why they do. Some men who took risks (i.e. going to war or working a high-risk job) and succeeded achieved reproductive success and, while some men who took risks and failed did not achieve reproductive success. But men who did not take risks generally did not achieve reproductive success.

Women, on the other hand, do not face the same risk/reward curve. A risk-taking strategy has few benefits and many risks to female reproductive success. A man can be far more reproductively successful than a woman can (a woman can have at most tens of children, a man can have thousands of children). So, men who chose risky strategies to achieve greater reproductive success had more children than other men and passed on those risk-taking genes to their sons. Women who chose low-risk strategies that conserved the reproductive success they already had (i.e. kept their existing children alive) instead of following a high-risk strategy to have more children, were more likely to pass on their risk-averse genes to their daughters.

So, are men really more powerful than women? The biological reality is that men are far more disposable than women in terms of human survival because each woman contributes far more to the survival of the human species than does each man. I think once this is understood, the standard view of the relationship between the sexes that assigns a dominant, power relationship to the male in marriage is untenable.

The first and most important principle that Kanazawa and Miller discuss is that of female choice. Because females invest more effort into reproduction than do males, sex occurs when and where the female says it will occur, not the other way around. The second principle that Kanazawa and Miller discuss is the polygynous nature of human sexuality. This is the consequence of male competition for females. Because of the significant cost and risk of pregnancy and childbirth, reproductive opportunity can be seen as a scarce resource - wombs are a scarce resource with a price. The price is set by competition between males for access to that resource (buyers) and females who choose who gets access.

Now, this is all ignoring the costs of raising children and the (potential) costs of additional resource-consuming humans in the population. Steven Landsburg persuasively argues in this article that each new person born into the world, today, is a net benefit for everyone except their siblings (and I would add, their parents, since most parents have to accept a marginally decreasing standard of living for each additional child they choose to have). Landsburg's argument is persuasive but he does not speculate about why each new individual born today is a net benefit to the rest of us.

Let's look at other species to see the "state of nature" in which humanity originated. For each new caribou born, there is a marginal decrease in the available lichen and other food resources available to all other caribou. Each new caribou born is a net cost to all other caribou. As more caribou are born, feeding grows more scarce and malnourishment increases. The wolves that prey on caribou find more easy prey (as malnourishment increases) and the population of the caribou is brought back down. Similarly, each new wolf born marginally reduces the amount of food to go around with each kill but, unlike the caribou who cannot make more lichen grow, each new wolf born marginally increases the number of kills. When the wolf population is low, the marginal benefit of an additional wolf is high since each additional hunter is likely to contribute more to the pack (in terms of the marginal increase in kills) than he takes from the pack (in terms of marginal decrease in share per kill). When the wolf population is high, the inverse holds.

Pre-humans were omnivorous. As far as the herbivorous diet of pre-human species goes, each additional member born, like the caribou, was a net cost to the rest of the members. However, insomuch as pre-humans hunted other animals, each hunter could potentially contribute marginally more kills than he marginally reduced the share per kill. However, in the carnivorous respect of the pre-human diet, pre-humans were still population limited by the force of privation at the point where marginal kills of new members did not offset marginal decrease in the share per kill.

But when we come to modern humans, the human brain and technology fundamentally alter this equation since it is possible for modern humans to produce far more than they consume through technological means. Landsburg's argument shows that this must be the case today, at least for the last two centuries or so. As a rule, each new human that is born will produce far more than they will consume. The Malthusian view, which still holds sway with many people even where its formal shortcomings are acknowledged, that human population will run away and outstrip the growth of resources is not rigorous. Proponents of population control are obviously correct in pointing out that the exponentially growing productivity of humans cannot go on indefinitely in this physical universe where no exponential continues indefinitely. However, we have to take into account the ways in which humans make the choice to have more children or not and what drives this choice.

The Industrial Revolution is driven by a variety of technologies that have amplified the ability of the individual to produce food, clothing and other basic necessities. Economic history also shows the importance of specific innovations (indirect exchange via money, credit, double-entry bookkeeping, etc.) in dramatically increasing the division of labor which has further helped to amplify the gross productivity of the human population.

If we accept the Malthusian argument that population will always, inevitably outstrip productivity in the long run, then this means that the only real limits on human population growth are war and famine, as they have always been. Of course, few people alive today have seen either war or famine function as a meaningful limiter on population. The idea of living in a world where war and famine are the primary limiters of human population - as our pre-historic ancestors once did - is terrifying.

But if we apply marginal analysis to the productivity and resource-burden of humans, we can easily see that the Malthusian argument is simply incorrect. Take the internal combustion engine, for example. The internal combustion engine made possible the lowly farm tractor. The farm tractor has massively amplified the productivity of the individual farm laborer to the point that the United States has gone from a country where as much as 80% of the population worked in farming or in an industry directly related to farming to a country where only a couple percent of the population work in farming, yet feed far more people both within and outside the country.

Before the internal combustion engine, an individual could cultivate by hand or drafted plow. If he cultivated by hand, he may not be able to grow enough food to feed even himself and his family. If the average farmer cannot grow enough to feed himself, his having been born is a net cost to the rest of society because he will have to make up the shortfall in his productivity from either the environment, for example, by eating wild berries (reducing the amount of wild resources available to everyone else) or else by stealing from the productivity of others.

By contrast, each new individual who is born and manufactures or operates a tractor is marginally increasing the agricultural productivity of the earth by an amount far greater than the marginal increase in food consumption which he creates. We can see in this how the correct intuition underlying the environmentalist's angst about population increase (unsustainability of an exponential growth curve) can be salvaged while correcting the Malthusian argument. Human population will reach its carrying capacity when the marginal increase in human productivity for one more baby born is exactly offset by the marginal increase in human consumption. Beyond this point, additional population growth can only be controlled by war and famine, but it should be obvious that we are still some way off from reaching this point.

The question that remains whether there is any other alternative to controlling population by war or famine or - which is in no wise preferable to either of these - coercive population control via government policy. To answer this question, we have to look at the "market" for human reproduction, that is, the incentives facing baby producers.

There are two key components to human reproduction. Making babies and feeding them. The cost of making babies falls entirely onto the females - only females can gestate. The feeding of children can be accomplished by either males or females, though most often it has been males who have taken on the majority of this cost. I will not try to settle here the age-old debate over who contributes more, the breadwinner or the homemaker. Suffice it to say that this is becoming less of a gender debate since, as women have increasingly become able to fulfill the role of a breadwinner, there is less demand for them to fulfill the role of a homemaker.

Both making babies and feeding them are costs. Obviously, no one would reproduce if there were no benefits. While it can be argued there is economic benefit to parents when their children grow old enough to care for them or support them, this is a long-term benefit that is not likely to outweigh the very high short-term costs of pregnancy, childbirth and rearing. If this were the only benefit, very few people would have children. We have to look to genetics to find the benefits - they are primarily psychological. Those humans who were indisposed to have children because of the present costs were less likely to pass on their cost-counting genes. Those who derived psychological satisfaction from the joy of having a child and reckoned the costs of pregnancy, childbirth and rearing to be "worth it", passed on those liberal genes. We are descendants of people who thought the costs of child-rearing to be worth it. This is why people have children, despite the obvious economic costs.

However, remember that the human population is just replenished if each woman has two children. When reproduction reaches 2.0 children per female (actually, slightly more than this due to incurable disease and accidents), the human population plateaus. We have to consider the relative reproductivity of females. When the human population is nearing its carrying capacity, it becomes ever more costly to keep each additional child alive. This means that women who overestimate their ability to support children become less likely to pass on those optimistic genes as their overcrowded, underfunded children are more likely to starve. In this situation, overestimation can be as genetically unsuccessful as underestimation (due to a psychological or other disinclination to bear the present costs of child-rearing).

So, the rising costs of population growth are transmitted through the degree of joy of child-rearing that women pass on to their offspring. When the costs of new children were dwarfed by the productivity those children would eventually have, women with an indisposed attitude to child-bearing were less relatively reproductively successful than their more enthusiastic sisters. But when the costs rise, women who are indisposed to have very many children (maybe having just one or two) are not much less relatively reproductively successful than the more enthusiastic baby-makers. In this scenario, we would expect the female population to become significantly less disposed to reproducing more than a couple children, as a rule, because the less enthusiastic females become just as good at passing on their non-plussed genes as the more enthusiastic.

While this can occur through the hard limit of famine or actual starvation, to assume that women will not limit their reproduction as resources become more scarce is to deny that humans can make predictions, which is obviously false. While some women will have more children than they can support and they will starve (this happens even now), most women can be expected to predict that they will not be able to afford additional offspring and limit their own reproductivity, despite their enthusiasm for reproduction. The foreseeable starvation of their children is a massive psychological cost and should offset the present joy of having a child.

Birth-control technologies have made the human reproductive decision-making process 
more exact, but birth-control is largely negligible to the population analysis. Its primary benefit is to reduce the costs of recreational sex, especially for women. However, one reproductive technology with particularly important consequences to the economics of reproduction is surrogate motherhood. Limited to just our natural biological capacities, the most reproductively successful men have orders of magnitude more children than the most reproductively successful women. However, surrogate motherhood allows a woman to become almost as reproductively successful as a man can be. Of course, it is still more costly for a woman to be spectacularly reproductively successful than it is for a man, since surrogate mothers cost a great deal.

As surrogate motherhood becomes more common and normed, we should expect to see women engage in more risk-taking behavior. In particular, we should expect women to begin to take on more of the attributes that enable men as a class to be high-earners because there is the potential for greater reproductive success with the increased resources - an extremely wealthy woman might pay hundreds of surrogate mothers to propagate her genes far more than has ever been possible for a female in human history.

Technological innovations have reduced the need for physical strength in many occupations, enabling women to enter the workforce. Combined with the technology of surrogate motherhood, this fundamentally alters the dynamics of the question of who makes and feeds the babies.  In the past, men competed with one another for access to wombs - the most reproductively successful men were polygynous and passed on their polygynous genes, which is why humans, especially men, are promiscuous. Unlike the case with men, however, there is no reason to believe that surrogacy could affect female promiscuity - hiring a surrogate mother does not occur as a result of a sexual urge or impulse (so women who employ surrogates may be promiscuous or not and pass on those genes intact... surrogacy is indifferent to promiscuity).

With the option of surrogacy, a woman can use her own womb, or she (or the man or men she reproduces with) can purchase access to the wombs of other women. Men, on the other hand, through means of the sperm bank or other means, are competing with one another to fertilize the eggs, regardless of whose womb the fetus eventually develops in. In other words, surrogacy changes the old identity between womb and egg. A womb is not identical with an egg since eggs can be fertilized and implanted in wombs where they did not originate.

Men, now, are not competing for access to wombs, but access to eggs and couples are competing for access to wombs. This should dramatically increase the price of wombs since the number of reproductive couples is roughly the square of the number of reproductive men (assuming there are about as many reproductive women as reproductive men). This means there is a dramatic increase in the number of bidders for wombs, while the supply of wombs is the same as it was before. As a consequence, women should be able to demand much more in return for access to their womb.

Note that each woman who bears a child in surrogate is giving up access to her own womb to pass on her own genes. She bears a double loss, genetically, since she is forgoing the opportunity to pass on her genes for the duration of the surrogate pregnancy and she has expended a great deal of energy and time to pass on another woman's genes instead. Similarly, the woman who pays for surrogacy has a double win - not only has she passed on her own genes, she has prevented the surrogate mother from passing on her genes (during the duration of her pregnancy). In other words, she's "crowding out" the competition. In a sense, this is a bit like cuckoldry without the trickery - a man who is cuckolded by his wife is tricked into investing his time and effort into propagating the genes of another man. A surrogate mother is paid to invest a great deal of time and effort to pass on the genes of another woman.

We can expect that objective human beauty should increase as a consequence of this - a wealthy man can subsidize the surrogate motherhood of the most attractive women, amplifying their beautiful genes far more than would be possible without surrogacy. Conversely, the least attractive women can obtain far greater economic compensation for giving up their womb for use by more attractive, subsidized women than they could by using their womb for their own genes (since they will only be able to attract the least desirable men, that is, the poorest men).

The economics of surrogacy may also throw some light on the puzzle of why wealthy societies have become less reproductive than less wealthy societies. A poor woman can benefit by giving up the use of her own womb as a surrogate mother (she can use this money to, perhaps, feed and clothe her own children, thereby increasing their chances of reproductive success). A rich woman can buy access to the wombs of other women through surrogacy. As women in the West have become more wealthy, but surrogacy has remained stigmatized, the incentives for reproduction have decreased. That is, wealthy Western women have less economic incentive to use their own womb for reproduction, but since surrogacy is still stigmatized, they are not likely to have children through surrogacy, either. So, the reproductivity of the wealthy West has simply declined.

The technology of surrogacy itself does not create this situation but it will eventually solve it. Wealthy women will become less likely to use their own wombs to reproduce, pushing the burden of pregnancy and childbirth off onto less wealth women, while still attaining reproductive success. It would be instructive to know whether wealthy women have historically always been less likely to reproduce than poorer women. In any case, I think that the "price of the womb" is what is responsible for the decline in Western population growth - the economic incentives which a wealthy, Western woman must be offered to go through the pain of pregnancy and childbirth are much higher than those which women in less wealthy countries must be offered.

While the price of wombs should increase as a result of surrogacy, the price of eggs should actually go down. While eggs are still not nearly as biologically plentiful as sperm (ensuring that sperm will always be cheaper than eggs), they are much more plentiful than wombs. With natural reproduction, the majority of the cost is the womb (pregnancy, childbirth), not the egg. Once separated, the egg is relatively cheap - a man could father a child with any of many attractive mates using their eggs, just as a woman reproducing naturally may choose among many men with which to conceive, forcing them to compete and offer significant benefits to outbid one another for access to the womb. Women who are seeking to reproduce through surrogacy face competitive challenges similar to those men have always faced.

I have discussed the economics of reproduction in purely material terms, but this is not to deny the intangibles which factor into the calculation of reproduction. Women compete for access to the most desirable men, but wealth is not the only metric of desirability. Similarly, men compete for access to the most desirable women, but physical beauty is obviously not the only metric of desirability.

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