Bryan Caplan  

Democratic Fundamentalism and The Baby Business; or, Debate? We Don't Need No Stinkin' Debate!

Northian Pessimism in FP2P<... Market Failure and Government ...
Deborah Spar's The Baby Business is, by far, the best overview of the cutting-edge technology and sociology of having babies.  If you want to learn about in vitro fertilization, surrogacy, cloning, and international adoption, Spar's book is a one-stop shop.  Unfortunately, she is also a caricature of a democratic fundamentalist.  Although she describes many horrifying and tragic results of government regulation of reproductive technology and adoption, she repeatedly demands more regulation.  What kind of regulation?  Whatever kind of regulation emerges from a vigorous public debate.

In the preface of The Baby Business, Spar initially pretends to neutrality: "The Baby Business does not try to resolve these moral issues.  On the contrary, it argues that the moral issues surrounding birth and babies will never be resolved."  But three pages later, she puts her cards on the table:
Bluntly put, the book suggests that governments need to play a more active role in regulating the baby trade.  This doesn't mean that governments should control the industry or ban it... If there is demand for babies, there will be supply.

Such a market-based relationship, however, doesn't preclude the kind of government intervention that exists in a wide range of other industry sectors: in education, in health care, in drugs.  Indeed, governments are active players in most advanced capitalist economies, setting the rules that allow economies to function and, theoretically at least, keeping an eye toward the common good.
When Spar actually looks at the baby trade, however, we find that many governments are already heavily involved, and doing great harm.  She rarely comes right out and says it, but it's easy to see.  A few examples:

1.  Since "Danish sperm is subject to rigorous standards and guaranteed by the government to remain anonymous, a Danish sperm bank has been able to corner much of the global market for exported sperm."  Translation: A Danish firm is the market leader because its government has credibly committed not to abrogate anonymity contracts. 

2.  Since many governments around the world regulate the price of eggs, "the high end of the global egg trade has gravitated toward the United States."  Translation: Thanks to regulation, rich foreigners who want eggs endure needless expense and inconvenience, and rest are basically out of luck.

3. The same goes for surrogacy contracts.  Some governments don't allow them at all; others allow them only for "suitable" parents.  So the rich endure needless expense and inconvenience, and everyone else has to do without:
Some couples traveled abroad to avail themselves of high-priced services that simply were not available or legal at home: gay Britons, for example, could not easily adopt in the United Kingdom; infertile Australians (or Taiwanese or Kuwaitis) could not legally employ surrogates at home.  So they ventured instead to the United States, paying around $75,000 for a child to bring back home.
4. Some countries, like Germany, ban embryonic screening, even to detect awful congenital diseases like cystic fibrosis and Tay-Sachs.  The result, again, is that richer parents go abroad at great expensive and inconvenience, and everyone else either remains childless or throws the dice that give them a severely ill child with 25% probability.

5. Virtually all countries heavily regulate adoption.  The result: No good deed goes unpunished.  If you want to rescue a child from severe poverty or an orphanage, you usually have to pay thousands for the privilege.   A "healthy white Russian infant" goes for about $35k.  A black Ethiopian goes for $6,700 to $8,000.  Regulators desperately try to make sure that the biological family of the child doesn't get a dime.  Instead, these thousands go to facilitators, brokers, and adoption agencies whose main service is helping people navigate their way through the adoption regulations of two countries.

6. While the out-of-pocket cost of adopting foster children is zero, government regulation forces aspiring parents to suffer for their generosity.  Out of 534,000 in the U.S. foster care system, only 126,000 were eligible for adoption.  The hitch:
Because these children are legally wards of the state, only state agencies can handle their adoptive placements.  And the process is typically exasperating: parental rights must be legally terminated, extended relatives contacted, and frequently, racial considerations weighed.
Translation: Regulation forbids an adult and a child to consensually form a permanent family. What for?  To protect the "rights" of abandoned minors' abusive and neglectful blood relatives - plus random bigots.

Spar isn't a dogmatic opponent of the baby market.  When she looks at the real world, she sees much of good that markets do, and much of the the evil that governments do.  Still, no matter how much harm regulation does, her solution is more regulation.  What kind of regulation?  It doesn't matter!  Spar is a pitch-perfect democratic fundamentalist who blesses any result of democratic deliberation:
Usually, this is the point in any provocative book where the author lays out a road map for reform... But the author is not going to do that... Because if markets are political, and if the market for babies is particularly intimate and controversial and complicated, then any single road map for reform - and indeed any top-down strategy of reform - is certain to fail.
Wait, is this a plea for laissez-faire?  Not on your life!  She immediately continues:
What the market needs, instead, is a politically determined strategy, one that emerges from a dedicated and explicit political debate.  This debate will not be cordial.  Depending on the climate of U.S. politics, it could well move to forestall or eliminate certain aspects of high-tech baby-making.  Yet the debate itself is vital.  Without it, the baby business will either disintegrate into chaos or fall prey to the narrow interests of particular groups.

As a society, therefore, we need to engage the politics of assisted reproduction.  We need to decide what pieces of this emerging technology are acceptable, and for whom...
She concludes:
Instead of recommending a specific set of policies, therefore, this book advocates a process of political debate...
My objection is simple: Almost all of the regulatory evils I've listed are ultimately caused by "political debate."  The public irrationally opposes technological innovation and mutually advantageous exchange in the baby market.  But as long as this market stays below the public's radar, it remains unregulated and progresses rapidly.  Whenever voters notice what's going on, in contrast, they cry out for restrictions, bans, and a bunch of arbitrary "safeguards," and their leaders oblige them.  The result - sometimes intended, sometimes unintended - of these policies is to impede two great goods: creating and adopting children.

Under the circumstances, only two strategies merit our attention.  One is education: To clearly explain why popular complaints about the baby market reflect economic illiteracy, if not sheer malevolence.   The other is stealth: To help the baby industry keep a low profile so it can survive, thrive, and gradually triumph as a fait accompli.  If Spar managed to inspire a grand political debate, in contrast, the probable result would be heavier regulation of what exists, and an outright ban on much of the progress we would otherwise see.  Debate?  We don't need no stinkin' debate!

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CATEGORIES: Regulation
Twitter: Bryan Caplan @bryan_caplan

COMMENTS (14 to date)
SydB writes:

"Debate? We don't need no stinkin' debate!"

Then why did you spend so much time writing this post debating her ideas and book?

anonymous writes:

[Comment removed for supplying false email address. Email the to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Doc Merlin writes:

He isn't saying there shouldn't be debate, but rather that, it shouldn't be a question for regulation.
He is also laughing at the author for decrying specific regulation, but calling for more democratic involvement (and hence regulation) in reproductive technologies.

GabbyD writes:

what is your opinion about the production of babies for profit?

i.e. the only reason the baby brought to term was to sell it?

darjen writes:

Excellent discussion, thanks for posting. Wife and I are considering adoption after our 2nd is born. But after reading all this, I'm not sure I have the stomach for dealing with all this un-necessary regulation, expense, and inconvenience.

Patri Friedman writes:

Your imagination lacks ambition, as you forgot a third option - creating political processes more optimal than democracy.

You may say I'm a dreamer - but I'm not the only one!

Marc writes:

While I don't know if this information is routinely given to people seeking reproductive help (my cousin did not receive it - though that was about 10 years ago, when this information was first coming to light), there are higher risks associated with these treatments.$=activity

I could see one use of the government as an information clearing house rather than to control the market, much like I would like the FDA run. But I would suspect that like FDA, this would turn into information control - because ordinary people can't handle this information.

Douglass Holmes writes:

My take from the Baby M case is that even if you attempt to keep new reproductive techniques under the radar, a single lawsuit can put the issue into the courts which have the power to legislate without having to face the electorate. Some people trust the courts more than they trust the legislatures. I don't.

These issues are incredibly complex and I tend to trust the markets to sort them out. But, if the government is going to get involved, I would prefer that the debate be a public one that involves the legislature rather than one that involves only judges.

Thomas Sewell writes:

Spar appears to be calling for Mencius Moldbug's Cathedral to hurry up and make some decisions about baby trading so they can start to be enforced by the government bureacracy arm of things.

After all, once the elite gets together and has a good discussion on it, a few papers get published in the right journals, some groups and the media start pushing for those preferred policies, she'll know what to think and the regulators will know what they're supposed to be trying to accomplish.

Spar decries the current status of the markets working around the obstacles put up by current regulators, while really badly wanting to condemn the market, not the regulators.

Zac Gochenour writes:

Fantastic post, truly. Thanks for this.

Josh W. writes:

Gabby wrote,

"what is your opinion about the production of babies for profit?

i.e. the only reason the baby brought to term was to sell it?"

I think mutually beneficial exchange creates only winners. The seller (poorer person) is a winner because she reaps the economic profit. The buyer (richer person) is a winner because she gets the opportunity to be a mother. The baby is a winner because it wouldn't have been conceived otherwise (if the only reason the baby was brought to term was for this market exchange).

We get 3 winners instead of only 2!

I recommend reading the section on a market for babies in David D. Friedman's law book that is available online.

GabbyD writes:

you are convinced by friedman's dismissal of the commodification argument?

regarding selling sex for money, he writes: "I find the argument ingenious but unconvincing. Even where prostitution is common, very few people—prostitutes, customers, or others—regard it as a model for what sex is supposed to be."

really? so male domination, gender discrimination, sexual abuse that routinely happens in many countries where women are bought and sold like goods is "not a model" for those men? hhmm...

there is another danger -- overproduction. one suspects that when poor women now have an easier option to sell, their opportunity costs of moving to a more productive industry will rise. overproduction is an issue now, especially for 'lower quality' babies. with a monetary incentive, this will only grow.

Josh W. writes:


I'm never convinced by one argument. I try and weigh the relative pro's and con's of both sides. That being said, yes I think market exchange for babies is superior than the alternative. I think the commodification argument ignores or at least undervalues the real gains of the situation.

You write,

"really? so male domination, gender discrimination, sexual abuse that routinely happens in many countries where women are bought and sold like goods is "not a model" for those men? hhmm..."

All that stuff happens whether or not a male or female can legally purchase a good or service. I don't think being allowed to make a consensual market transaction increases those negative aspects. In fact, the more you do stuff out in the open the safer it usually is (less abuse).

You write,

"there is another danger -- overproduction"

There's no danger of overproduction as long as there is a market clearing price. In equilibrium, supply is equal to demand. That's the beauty of the information conveyed through prices.

Right now there is an artificial shortage of a babies which prevents those 3 parties from entering a deal that benefits everyone.

GabbyD writes:


"All that stuff happens whether or not a male or female can legally purchase a good or service. I don't think being allowed to make a consensual market transaction increases those negative aspects. In fact, the more you do stuff out in the open the safer it usually is (less abuse)."

all that stuff (sexual abuse, lack of educ for women, etc) happens more in societies that dont have the same respect for women and children, as say the US does.

i dont deny the static efficiency properties of free trade. commodification is a dynamic argument, whose most egregious effects are felt in developing countries. in these places legitimizing this transaction will only perpetuate the abuse that is already happening. THIS is the reason why commodification is truly bad.

about overproduction, i meant that there is already alot of women who are producing kids they cannot care for even without the alternative to sell the child. instead of encouraging a more productive use of their time, giving these women incentive to produce more.

now, ur equilibrium argument assumes that the 'right' price will mean all babies produced will be adopted. this cannot be the case, because of the quality argument. in addition, there is a time element coz there is a small window for which babies are valuable, after which the demand for him declines.

in goods, unsold inventory is sold according to its scrap value. for babies, what does this mean? these babies will have no one to care for them, and will know that the reason they were born was not because of love, but because they being sold in an anonymous market for babies. life for these babies would be difficult, and i dont think we'd be doing these babies a favor if we allowed them to be conceived in this environment.

i would be amenable to this if there were regulated exchanges, such as the market for kidneys, and i'm not too hot about monetary compensation for kids (or organ donation for that matter...)

there are other issues as well about having prices clear these kinds of markets. in theory, the cost of having a baby from the developing world should include ALL costs. from examples in organ market, the only thing being paid for are the direct surgeries, but not pre or post -op care. the reason is the lack of bargaining power in these societies.

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