Comparing the fixed
quota system with a tradable procreation permit, I would argue that the latter
is more questionable than the former. Even though a tradable procreation permit
would be efficient whereas a fixed quota system would not, its impact in terms
of eroding people’s perception of how fair their community is offsets
efficiency gains. People’s expectations about one another affect their behavior
towards the group, a position underpinned by a large body of recent academic
evidence that rejects the idea of the utility maximizer representative agent.
It is rather the case that emotion and moral codes play a major role in human
decisions. In this vein, one’s attitude toward his or her group, including
whether one cooperates or not and to what degree, depends fundamentally
on the person's expectations about the rest of the group. Hence, the fairness
of public policy fosters cooperation among agents. The design of public policy
and institutions must account for this behavioral effect, taking the discussion
beyond efficiency concerns.
Specifically as regards
the options at hand, a fixed quota system is problematic in a highly unequal
world. Imposing a significant fine on the poor for an extra child limits their
freedom regarding family decisions, whereas for the rich the cost of having
more than one child dissipates in their mammoth budget. A fixed quota system,
however, can be socially acceptable by letting the fine on extra child be
proportional to income. On the other hand, when there is a market for the right
to have a child, such as a tradable procreation permit, the nature of having
children changes drastically. When kids are goods, having a child implies an
opportunity cost absent under a fixed quota system. Kids would most likely
become luxury goods under such conditions; rich families would be notable for
having five kids. For the average guy, having a child would imply not earning a
lot of money, as the right to have kids would presumably be quite expensive. A
young couple would thus be faced with the awkward decision of having a kid or
selling the right to do so and travelling around the world, buying a car or an
apartment and so forth. Who knows what the price of life would be? For poor
people, having a child would be a burden; selling their fundamental right to
have a family would be a matter of making ends meet. A market for children
introduces an opportunity cost, its corollary is to create a fallacious
equivalence between money and life, as if they were interchangeable.
Most economists would
argue it’s a paradox that one system can be more efficient yet less preferable
than other. Mainstream economics isolates moral concerns from its analyses
claiming everything can be understood as goods. Economic models and its
restrictive hypothesis, however useful, must operate within its boundaries.
Most relevant economic questions lie beyond orthodox framework, and, in such
cases, dialoguing with other fields of science is paramount.
PS: I'd like to thank the old salt Pedro Mendes Loureiro for very helpful comments on a draft of this post, thank ye matey!
