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Wednesday, November 18, 2015

Odd Defenders of China’s One-Child Policy

The Objective Value of Subjectivism

“Before I had my first child, I was hoping for the relaxation of the one-child policy,” Chen Feng told the New York Times. But, she adds, “I changed my mind after I gave birth to my daughter.”

What changed her opinion of the Chinese government’s coercive family planning?

“It takes a lot of energy to take care of a child, and you want to make sure the child will have a good future,” she said. “So my husband and I have decided not to have a second child.”

Families are perfectly aware of the trade-offs involved when deciding to have additional children.

Does Feng believe, as the Times quotation seems to indicate, that the right “policy” for her family should be imposed on everybody else? If so, she fails to appreciate the beauty of freedom. If the government had no policy regarding family size, then couples who wanted multiple children could embark on that path, while those who only wanted one child could stop at one. Presumably, Feng and her husband are not the only parents to realize that the first kid can be exhausting.

Perhaps Feng can be forgiven for this blind spot. She has never known a system that respects individual choice or appreciates the practical benefits a community will enjoy from the diversity of choices its members freely pursue.

The average American can appreciate the horror of state-imposed family planning, but the “planning” mentality violates more than individual rights; it violates economic principles as well. But even professional economists can forget the importance of subjectivism when it comes to dry cost-benefit analyses. Just as the Communist Party officials measure their policies from a collectivist perspective, so, too, do many Western intellectuals.

Economist Tyler Cowen, for example, recently wrote,

As a leader I would never institute a one-child policy, which I consider to be an immoral restriction on personal liberty. But if we ask whether this policy had benefits for China, it absolutely did.

For instance the policy made China a more educated society more rapidly. It is simple economics that putting a lot of money into the education of each child is easier to do with a single child than with three or for that matter seven kids. The effects of the one-child policy are illustrated through a natural experiment of sorts. Chinese children who ended up born into twin pairs showed significantly slower rates of schooling progress, worse grades, lower chances of college enrollment, and worse health.

Even at face value, we could quibble with the “simple economics” of education that Cowen cites, especially since not everyone is concentrated in a city. With many Chinese peasants living in rural areas, it is entirely plausible that the way to maximize the average level of Chinese education in, say, three generations is to allow families to have multiple children.

The reason for this possibility is that traditional schooling involves tremendous economies of scale, at least for certain ranges of “output.” For example, if an area with 50 families builds a schoolhouse and hires a few teachers, the marginal costs hardly go up if the families each send two children rather than one. And yet this approach would yield twice as many educated adults in one generation.

It takes a special kind of non sequitur to describe China’s one-child policy as “having benefits.”

As is often the case in economics, we can illustrate the potential flaw in Cowen’s argument by exaggerating it. Suppose that in the late 1970s, the Chinese government announced that only one out of every 100 families could have one child, and that the other 99 families were forbidden to have any. What would the average education level of China be today had it implemented this alternative policy? According to Cowen’s logic, today’s Chinese would be at least as educated, and if anything far more educated (because childless aunts and uncles would have extra resources to contribute to the rare descendant’s education). In reality, it’s easy to see how such a policy might have crippled the entire schooling infrastructure.

Beyond the technical limitations of Cowen’s glib argument, however, there is a more serious problem: Cowen has overlooked the fact that families are perfectly aware of the trade-offs involved when deciding to have additional children.

For example, if the Fengs change their minds and decide to have a second child, they are taking into account the fact that they will have less money — at least early on — to devote to the schooling of their first child. But if they decide to have a second child anyway, it must be because they think the total benefits outweigh the total costs. (Of course, they might have a second child by accident, but that can happen under the government restriction as well.)

Thus, for any family that thought one (or zero) children was the best decision, all things considered — including schooling expenses — the Chinese government policy would be redundant. And for any family that decided two or more children was the best decision — taking schooling expenses into account — the Chinese government policy did more harm than good. It takes a special kind of non sequitur to describe such a policy as “having benefits.”

So yes, the Chinese government’s one-child policy had some beneficial results, but only in the sense that any government policy would. To suggest (as Cowen seems to) that there were material benefits that were swamped by an abstract “violation of liberty” is to misconstrue the nature of subjective value theory and individual choice.

The one-child policy was a horrible violation of liberty, and on that ground should be rejected, but it was also inefficient on cost-benefit grounds, if we use that metric appropriately.

  • Robert P. Murphy is senior economist at the Independent Energy Institute, a research assistant professor with the Free Market Institute at Texas Tech University, and a Research Fellow at the Independent Institute.