WWMD: What Would Malthus Do?

An article in this week's Economist discusses recent history and current trends in world population.

If you'll recall the "Logistic Equation" from precalculus or calculus, you know that certain things, such as population growth and predator-prey relationships, can be shown with a nifty formula, involving an ugly thing called the natural number "e." When graphed, this renders an s-shaped curve, or what looks like a sideways graph of tangent.

Basically, it means that populations tend to grow slowly at first, then reach a critical number that sends the species population soaring through reproduction, until environmental effects (shortage of food, disease, predators, or crowding) force members of the population out, or dead. The curve levels out and maintains what would appear to be a long-term stable number, ceteris paribus.

Numbers are still growing; but recently—it is impossible to know exactly when—an inflection point seems to have been reached. The rate of population increase began to slow. In more and more countries, women started having fewer children than the number required to keep populations stable. Four out of nine people already live in countries in which the fertility rate has dipped below the replacement rate. Last year the United Nations said it thought the world's average fertility would fall below replacement by 2025. Demographers expect the global population to peak at around 10 billion (it is now 6.5 billion) by mid-century.

I would wager this recent inflection point has something to do with the signals we are receiving from our environment. Increased income, wealth, and abundance of materials has given rise to a shift in attitudes among young professionals, whom would rather use disposable income to enjoy themselves than save for a child's college, especially when costs are rising as rapidly as their are in the knowledge economy.

Think of twentysomethings as a single workforce, the best educated there is. In Japan (see article), that workforce will shrink by a fifth in the next decade—a considerable loss of knowledge and skills... In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

Well, hardly a poor use of resources if its a choice willingly made. But it begs the question: how much does the "labor" or "human capital" part of the production function really affect the makeup of an economy?

States should not be in the business of pushing people to have babies. If women decide to spend their 20s clubbing rather than child-rearing, and their cash on handbags rather than nappies, that's up to them.

Really? That's interesting, because an article from Medical News Today discusses some of the incentives Estonia is using to entice its young females to have multiple children. From that article:

Estonia provides employed women who have children with their monthly salary, up to $1,560 monthly, over a 15-month period and unemployed women with $200 monthly.

Whatever the measures, governments tend to protect their investments in capital and infrastructure and have been known to wage war, from time to time, over resources. So why not protect human capital as well?

more people + better education = economic growth

Rational Gay Union Policy

I'm not attempting to steal JurisNaturalist's thunder, but our recent discussion of the rationality of gay union is even more important to post because we're both fairly conservative Christian men.

JN sent me an e-mail this morning about a possible paper topic. A general outline of our discussion (he might contest it was one-sided pontificating) is below.

Assumptions:

1. Heterosexual unions (hereafter referred to as "marriages") are good for society. They promote procreation, family values, sexual and mental health, and general happiness.
2. Heterosexual couples choose to enter into marriage for these reasons, and according to individual sets of tastes and preferences (often, individuals are said to display a "vector" of preferences, tradition being one common example).
3. Marriage is a private contract and subject to analogs of common contract law. Divorces, alimony, custody and more have analogs in breech of contract, reparations, and property ownership, respectively (forgive the coldness).
4. Individuals enter into contracts only when it is beneficial to both parties.
5. It has not been widely shown by credible sources that homosexual unions (hereafter referred to as "gay unions") are not afforded the same quality of life improvements set forth in step 1.
   
6. It follows that all couples, regardless of sexuality, benefit from union (steps 1 and 4 with 5).
7. As long as individuals benefit, society's welfare increases.
8. It is in the best interest of governments to sanction unions for all couples.

Caveats:

1. Some members of society may receive disutility from the existence of gay unions. One might imagine an extreme conservative Christian to be extremely irked by his state's passage of such a law. In this case, social welfare decreases.
2. Some members of the gay community receive disutility from the ban or non-recognition of gay unions. One might imagine an extreme leftist progressive becoming irate over a state ban of gay marriage. In this case, social welfare also decreases.

We are left with no decision. Either banning or allowing gay union will decrease social welfare. We much measure the total welfare effect of each and compare three worlds:

1. Where gay union is allowed
2. Where gay union is banned
3. Where those receiving disutility from the permission of gay union do not exist

In the first two worlds, both containing the individual that receive disutility from permission, social welfare is not optimal. When that common factor is removed, in world 3, social welfare is optimized based on the above assumptions (thought process).

We see, then, that the market for gay union has a positive externality in that it increases total social welfare, but costs of offending idealogues are included in any individual policy decision. Following general theory of market failures and government intervention from any basic resource economics course, one sees that gay unions are underprovided. This is much in the same way that education is thought to be underprovided in Externalities in a Nutshell; however, in that article, higher than normal costs are borne by buyers but in gay unions, these costs are borne by other individuals.

It occurs to me that, by my last statement, this means the market for gay unions contains a negative externality, not a positive one. This means that the market over-provides the number of unions. However, I believe this discrepancy lies in whom one place initial rights (see Property Law or Google for some more information on "initial allocation". If anyone can find a hole in my logic, please leave a comment. If a negative externality is actually the case, the following analysis is perfectly incorrect.

The common solution, then, is that government intervene to create an environment conducive to more gay unions, either silencing or removal of the offended, or in some other way encouraging couples to enter this contract. If this means subsidizing the union, then I see potential laws being similar to current marriage laws, including tax breaks for the union, for raising children, etc.

It seems more likely, however, that the first step be allowing the unions to take place at all.