Tuesday, August 11, 2009

Children Cause Poverty

I've said it before, and I'll say it again children are the primary cause of poverty TODAY (I will not authorize comments about how back in 1820 "children were a blessing as they were extra labor!" simply because it's 2000 and-freaking-9)


You will never be able to convince me that the denominator in GDP per CAPITA doesn't at least have a 50% say in the matter.

9 comments:

Robert Miller said...

I remember a joke an Economics professor told us:

"Poor people have more children, on average, than rich people. Since the number of children decreases with income, children are therefore an inferior good."

We laughed.

Of course, it doesn't work that way. You can't make interpersonal comparisons of utility, wealthy people have greater opportunity costs of their time, the rich don't need children as a retirement plan, and poor people have nothing better to do than F around all day.

But now the joke is completely ruined. Income went down and births went down. Children are now a normal good, and possibly even a luxury good. What's the world coming to?!

Ah, but we have to take into account a nine month effect lag, don't we?

Ryan Fuller said...

I see a lot of areas with terrible economic conditions showing up as dark red. Meanwhile, the green areas are coming off relatively light.

Not that this proves anything, but if the chart actually were a valid argument, it would be undermining your claim rather than supporting it.

Anyway, if the total human population at any given time were never above 10,000 people for all of human history, do you think we'd have figured out industrialization by now? More people means greater potential for innovation, and one person figuring out something useful can increase the productivity of all of us. The last few hundred years have seen a population spike unrivaled in human history, and technological advances have accelerated as well. In my opinion a few key discoveries in industrialization, sanitation and agriculture have enabled the population boom, and the population boom enabled an avalanche of other advances, but that's just a my impression.

Children are stupid, expensive and produce basically nothing, true enough. But eventually they turn into adults, and adults can be pretty useful.

geoih said...

As civilization advances, the costs of raising children to continue living at the ever advancing standard of living goes up. Consequently, people have fewer children. Progress is a natural birth control.

Bike Bubba said...

Actually, the better correlation is not # of children and poverty, but rather marital status and poverty. Having children does not cause poverty, per se, but having children out of wedlock certainly does. Walter Williams points out that two minimum wage earners with two children do not fall below the poverty line. Yes, it's not filet mignon for dinner every night, but it is quite liveable.

W. T. said...

So based on what the Major said, with a 9 month lag most people stopped planning children for the future about the time Obama got elected. Nice...

Anonymous said...

It's because people have families they must provide for that much of the transactions that make up the economy--and which gave us DVDs and toothpaste and Ferraris and bean dip--exist.

adam van den Hoven said...

This is a worse that stupid observation.

adam van den Hoven said...

Normally I like the Cap'n's observations but this is the single most absurd and short sighted observation he's made. I'm not even sure its good economics. Its certainly

I will grant that if I earn $65,000 per annum and I support 4 people on that salary (a reasonable 1 income family with 2 parents and 2 kids) then I have significantly less money to spend on myself than if I were single. While that leads to less available money to spend on self serving things like martinis, vacations and fast cars, I'm not sure how that leads to poverty.

The idea assumes, falsely, that supporting one person is as efficient as supporting 4. Take any durable good, like a washing machine. Four households of one individual require 4 washing machines, where as my family of 4 uses only one. Given that the cost of a washing machine is the same regardless of the number of people who use it, my family is far more efficient than your 4 single people. Since I use my machine roughly 4 times as frequently as any single individual does, I get significantly more production for the same capital cost. This is true for any durable good. Many operating expenses are similarly more efficiently used by groups than individuals, which is why many people get room mates.

Regardless, this idea is a progressive one, not a conservative one. The logical conclusion, would be to actively discourage people, particularly people without the means to support a family, from having children. This is Eugenics 101.

Let's assume that everyone in the world clues into the Cap'n philosophy and everyone stops having children (not a big jump from today as a large number of "Western" countries have birth rates at or below 2.1). This situation will lead to the collapse of the economy as the labour pool reduces until it reaches a point where there are no longer enough people to produce anything. Further, the value of your assets will decrease as the market for them get smaller.

The only way that this works in REAL terms is if the Cap'n can convince enough other people to impoverish themselves so that the economy sustains itself sufficiently for him to live up to the standard he desires. How is this philosophically different from the self serving attitude that lead people into borrowing themselves to destruction as the Cap'n has been keen to point out? Both come from a radically self-serving, I deserve what ever I want attitude.

This idea has more in common with the no-growth/steady state economics that underlies the Obama Administration policies than capitalism.

Anonymous said...

In our situation this would be correct. We make enough to make ends meet. Even if I sold my car and gave up my mobile phone (w/internet), we still could not pay all the bills.