Sunday, June 18, 2006
(9:46 AM) | John Emerson:
Gary Becker's "Treatise on the Family"
(I've been cyber-sniping at economists for some time now, mostly here and at Crooked Timber. Computer death and travel interrupted my series, but I'm ready to start up again. This time I'm writing about an actual work by an actual economist.)
In 1992 Gary Becker received the quasi-Nobel Prize for economics: "Gary Becker's research contribution consists primarily of having extended the domain of economic theory to aspects of human behavior which had previously been dealt with - if at all - by other social science disciplines such as sociology, demography and criminology." The press release specifically mentions Becker's Treatise on the Family, published only 11 years earlier, summarizing it as follows: "A basic idea in Becker's analysis is that a household can be regarded as a "small factory" which produces what he calls basic goods, such as meals, a residence, entertainment, etc., using time and input of ordinary market goods, "semi-manufactures", which the household purchases on the market."
However, this is a bowdlerized version of what Becker actually said. In the section "Household Production Functions (pp.7-8), he writes
| "[T]ime and goods are inputs into the production of 'commodities' which directly provide utility. These commodities [i.e., those produced in the household -- J.E.] cannot be purchased in the marketplace but are produced as well as consumed by households using market purchases, own time, and various environmental inputs. These commodities include children, prestige and esteem, health, altruism, envy, and pleasures of the senses." |
In other words, the family is a small factory producing commodities, such as children. It's not hard to understand why the Bank of Sweden Nobel Committee cleaned up Becker's language a bit.
Now, taunting and throwing down snark are important tools in the economist's rhetorical kit. If you can get the layman huffy and indignant (for example, by defining children as commodities, or talking about "child-markets"), he'll be softened up for the second punch in the combination: a lot of math which the poor sucker is unable to understand. The economist then looks coolly at the hapless, innumerate, sputtering fool with his conventional, sentimental, Luddite ideas about children, explains how important it is to "learn to think like an economist", and proceeds with his exposition while the preppy audience applauds uproariously.
The Bank of Sweden people probably thought that Becker went a little too far here, so they subsumed the child-commodities under the harmless catchall "etc." But this is more than a rhetorical bug to be remedied with a simple patch. The supposed child-commodity marks a major problem with Becker's theory.
Imagine someone raising goats, which are in fact commodities. You put money and time into your goats, and with luck you can sell them for a profit. Or you can kill or eat them. Or if they become a nuisance, you can give them away or have them put to sleep. Commodities don't really cause a big nuisance. Children, on the other hand, are strictly money down the drain. You can never sell them, and you can't eat them or get rid of them. They impose major legal obligations, because you are both responsible for their care and for their behavior -- yet once they become adults, they no longer have any obligation to you.
If children are commodities, they're the worst commodity imaginable, more comparable to losing lottery tickets than to anything else (except that you have no legal obligations toward lottery tickets). At one point (p. 194) Becker puts in a patch explaining that parents get "psychic income" from kids, but that's a risky move: if you let me allege "psychic income", I will be able to claim that Albania is the richest nation in the world. There are good reasons to think that childraising is irrational.....
[snip]
A question Becker does not ask is "Why would any rational modern individual choose to raise children?" Children are tremendously expensive, especially in opportunity cost, and at age 18 they're lost to you. "Psychic income" is a rather feeble kludge, and it isn't really income anyway, because it isn't any more fungible than children themselves are. There are many good non-economic explanations of why people have children -- religious duty, family duty, community spirit, love, etc -- but Becker is trying to replace non-economic explanations of this kind, sentimental and Luddite as they are, with rational economic explanations. Furthermore, most non-economic motives for having children involve group membership rather than individual rationality, and except when speaking of child-raising, economists always strongly favor individualist motives and forms of organization.
This is not a trivial question. On the one hand, theoretically it has to do with the origins of human capital (what used to be called labor). The production of human capital is presently entrusted to an archaic, anti-individualist, sentimental, irrational Luddite form of organization: the family. This would seem to be both a defect of analysis (one which Becker has failed to correct) and a vulnerability of the system. And on the other hand, in fact, in the developed world there is a real problem with fertility, which has fallen below replacement in many countries. It seems that, if people are free either to have children or not, they will have fewer of them. (By "people" I mostly mean women, of course -- though childraising is costly to fathers too).
Becker distinguishes his "economic analysis" of the family from the more conventional analysis of "economic aspects" of the family. This leads to a peculiar dilemma. Economics can be normative or descriptive -- either explaining the best way to do things, or else analyzing what people actually do in terms of rational choice. In economics' areas of strength -- the description of the world of industry, business, and finance -- a critical version of the normative mode is dominant, and economists are not shy to say that actual institutions are irrational and should be changed.....
[snip]
But when Becker tries to extend the scope of economics to the family, which has not previously been treated in terms of rational choice, he avoids normative criticism entirely. He consistently looks at the recent-traditional American family and finds economist's explanations why it is already rational -- i.e., he rationalizes it, in the bad sense. It's rational and fair to favor the boys over the girls, it's rational and fair to favor the elder son over the others, and it's rational and fair for the wife to stay at home. (In asides, he also explains that the American class system and the system of international trade are also rational and fair.)
It didn't really work very well. Becker's theory is pretty shoddy. And that's why we see Becker's political allies, Pat Robertson and James Dobson, riding to the rescue. If childraising is, in fact, economically irrational, then we need some other way to convince women to produce units of human capital. And Robertson and Dobson and their allies can do this -- if they're allowed to rewrite a few laws.....
[snip]
The world would be a better place if economists themselves would sort out their field and share the actually-valuable part of the field with the rest of us, separating it from the crap, but even the nice ones seldom do this. The field elicits loyalty from its members, and for good reason. Economics is the king of the social sciences, and looks down on the humanities with scorn. Economists always have jobs, and only the densest of political leaders dare ignore them (e.g. Dubya). If I were writing in 1450 I'd be writing against scholasticism and canon law, but this is the twenty-first century, and it's the economists who are in command now.
Frankly, it bothers me that Becker is as well-respected in a field as powerful as economics, and even got a Nobel Prize of sorts primarily for this snarky, rather deranged book.....
[snip].
(Complete text at Idiocentrism)
