The Economics of the Baby Shortage

Richard Posner and Elisabeth Landes wrote this excellent paper in 1978, but I’m only now seeing it. It speaks of the terrible inefficiencies — pervasive shortages and surpluses — that come with state adoption agencies and their price controlled system of allocating the right to raise children. They address all the usual objections to a market for children and generally provide enough evidence to lower the temperature of the debate and introduce some rational thinking here.

In passing, they point out that a real market for child-rearing rights would probably end the practice of abortion or perhaps seriously curtail it.


When was the last time this point has been made an a debate on abortion? I’ve been thinking through it for years but never actually seen it discussed before. But it is really a no brainer. Why are valuable resources being tossed away when there are plenty of people out there who clearly want to use them? Why should abortion be considered the best-possible economic choice given that there is such a wide-spread demand for children? People speak about a woman’s right to choose but what about her right to give birth and personally benefit from marketing parental rights?

That all of this is illegal amounts to an intervention in the market process, and that intervention concerns the market for child-rearing rights. If we had an open market that allowed for payments to expecting mothers, the decision to abort would carry a heavy opportunity cost. Right now, all the cost is associated with carrying the baby to term. It cannot really be a mystery as to why so many choose to abort. This is what happens when the law mandates a price ceiling on any resource. No one wants to sell at a loss.

This is the kind of libertarian research that could make a huge difference in the world. This paper came out in 1978. I see it as compatible with Murray Rothbard’s views on child rights. Don Boudreaux wrote along the same lines. If anyone knows of other work in this area, I would love to see it. It seems that more work needs to be done in this area.

I once asked an anti-abortion activist whether he would favor a market for children if permitting one could reduce the number of abortions by half. He quick answer was no. I asked him to clarify: are you saying that it is better to be dead than traded? Yes was his answer.

That’s interesting to me because the current adoption market is already rooted in the cash nexus and trade. The problem is that it is seriously hampered by monopolization, regulations, and price controls. It is not the mother who makes the money but the agencies and lawyers. The law specifically forbids women from making a profit from a hugely valuable asset of their own biology. Women’s wombs have been forcibly de-monetized by the state.

Many people consider abortion to be a violation of human rights. Leaving aside that issue, it is surely a clear case of a violation of human rights for the law to prohibit women from the remunerative employment of their wombs in the service of life and human happiness. This is a serious case of state overreach.

Why are so few people willing to discuss this? It’s time we changed that.

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Free the People publishes opinion-based articles from contributing writers. The opinions and ideas expressed do not always reflect the opinions and ideas that Free the People endorses. We believe in free speech, and in providing a platform for open dialog. Feel free to leave a comment!

Jeffrey A. Tucker

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

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  • I agree that more discussion of this topic is needed. I’m a firm believer that having a free market for child-rearing rights would make it much more likely that children would end up in a household that truly wants and values them.

  • “are you saying that it is better to be dead than traded? Yes was his answer.”

    We live in the dark ages. This sick notion that profit is bad literally kills millions (billions…?) in thousands of ways like this. Clear thinking about the actual value of things is not allowed. I hope our ability to communicate faster and better than ever before starts opening up these kinds of discussions. Thanks so much for finding this and bringing it to our attention, Jeffrey!

  • I detect a potential bridge between libertarians and feminists here…

    After all, a woman’s right to control her own body should extend to the right to sell her newborn to an adoptive family, and it’s so gloriously obvious, after reading your article, that the opportunity cost of not making that money would deter the vast majority of abortions without ever having to coerce a woman’s freedom to choose. Simply marvellous. And all that has to happen is for an artificial human monolith to STOP doing something. Sigh.

    • Matthew John Hayden, I agree. I’m a libertarian and a feminist, and I view them as entirely compatible – feminism being merely an extension of absolute individualism to people of all genders. If you don’t already follow Wendy McElroy, you definitely should!

      The practice of surrogate motherhood, unfortunately controversial in the US, is the other side of this coin. Would-be parents who can’t conceive or can’t carry a child essentially rent another’s uterus until their baby is born. There’s a thriving market for it in India.

  • I wonder if the individual even understood the question? They may have even taken it to mean human trafficking. Surely, if a woman is going to carry a baby term would that not mean she would want the best for the baby and to make sure the baby is in good hands? There are a lot of sick people in this world and I can see both sides of the issue. However, the state facilitates human trafficking every single day. It is call CPS. They get more funding for a bigger case load and therefore, they want to traffic as much as possible.

  • I guess the first question that people are going to ask is: “how do you insure that babies will not be sold to people who do not intend to love them, but use them for various purposes -such as medical experimentation, or to sell their organs one by one- or to trade them at a higher price in a richer part of the world. Will we have babies traders?
    After all, babies rights are usually guarantied by the parents, because they are loving parents. Once in the hands of people who do not love them, babies may see their rights ignored, and there would be no one to complain on their behalf.

    How do we insure that babies’ rights are respected if babies can be sold to anyone who want to buy them, without any supervision nor investigation about the intention of the buyer?

      • Well, the minute social workers are involved, it is all over. If social workers can have a say on who can buy the baby and who cannot, things will evolve exactly as they have without the payment. Social workers will write lists of qualities that the buyer must have, according to them, and eliminate a whole range of potential buyers.
        Only black people will be able to purchase black children, intended parents will be eliminated as soon as they are a little successful (as they are today), or a little older than the average parent, and the only acceptable candidates according to the so called social workers will be parents who look very much like a social worker.
        Prices will go down as a result.
        So for this to work, there can be no social worker.

        There could be a popular jury. An assembly of neighbours, who know the buyer, or live near by. That would allow for diversity of intended parents and also for an understanding of local customs and of the neighbourhood. Something that social workers do not necessarily have.

  • Lots of parallels with the (non)market for transplant organs. Similar motivations for those who want to prohibit, similar market structure in that the donor is the only one who doesn’t get paid, similar distorted market outcomes.

    • I think that it is a much more difficult issue than the organ market, because with organ donations/sales, one responsible adult sells its organs.

      With babies donations/sales, one responsible adult sells another human being, who is not yet able to protect himself nor to have any say in the matter.

      The question therefore is: How do you protect babies’ rights?

    • I think that it is a much more difficult issue than the organ market, because with organ donations/sales, one responsible adult sells its organs.

      With babies donations/sales, one responsible adult sells another human being, who is not yet able to protect himself nor to have any say in the matter.
      Once the baby is sold, how do we guaranty that the rights of this small human being are protected?

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