more posner fun

Michael Perelman michael at ecst.csuchico.edu
Thu Dec 2 10:07:50 PST 1999


Posner, Richard A. 1977. Economic Analysis of Law (Boston: Little Brown). 113: "[The baby] shortage appears to be an artifact of government regulation, in particular the uniform state policy forbidding the sale of babies. That there are many people who are capable of bearing children but who do not want to raise them, and many other people who cannot produce their own children but want to raise children in their homes, suggests the possibility of a thriving market in babies, especially since the costs of production by the natural parents are typically much lower than the value that many childless people attach to the possession of children. There is, in fact, a black market in babies, with prices as high as $25,000 reported recently, but its necessarily clandestine mode of operation imposes heavy information costs on the market participants, as well as significant expected punishment costs on the middlemen (typically lawyers and obstetricians). The result is higher prices and smaller quantities sold than would be likely in a legal market." 114: "The objections to permitting babies to be sold are, first, that there is no assurance that the adoptive parents who are willing to pay the most money for a child will provide it with the best home. But willingness to pay is a generally reliable, although not infallible, index of value, and the parents who value a child the most are likely to give it the most care." 115-6:"Opponents of the market approach also argue that the rich would end up with all the babies, or at least all the good babies .... Such a result might of course be in the children's best interest --but is unlikely to materialize. Because people with high incomes tend to have high opportunity costs of time, the wealthy usually have smaller families than the poor, and permitting babies to be sold would not change this situation. Moreover, the total demand for children on the part of wealthy childless couples must be very small in relation to the supply of children, even high-quality children, that would be generated in a system where there were economic incentives to produce children for purchase by childless couples." 116: "A final objection to baby selling is that it involves the spectacle of 'trafficking' in human lives. This objection, the basis of which is unclear, may have been undermined by the recent changes in public policy concerning abortion. Is paying a pregnant woman to carry the child to term so offensive an alternative to the abortion of the foetus?"

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Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901



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