more posner fun

[Michael Perelman]

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