Honey, I picked up our new baby today
The hot topic of the day seems to be outsourcing pregnancies to India. As described in the article "Wombs for rent in India",
for a fee of $5000, a young healthy Indian woman agrees to carry and
gives birth to your baby, leaving the Western woman in better shape
with respect to both her body and career. This sounds like a voluntary
trade where both sides benefit, so naturally we can expect leftists to
oppose this, and indeed they do. As far as I can tell, their biggest
moral opposition to this arrangement is the fact that it costs "only"
$5,000, which the average American woman probably spends on Starbucks
each year but which would be a ten years salary for the average Indian
woman. This issue is worth a closer examination, since it reveals the
basic leftist errors of economic thinking so nicely.
As far as I have been able to decipher, leftists honestly seem to believe that each job has some kind of an inherent value that depends on how necessary and important it is for society. Therefore in a fair and just society, some central planning mechanism would determine everybody's salary based on this value of their work, plus of course what they need to live comfortably (to each according to their need, you know). Currently this doesn't happen, and we therefore get terrible unfairness so that a kindergarten teacher is paid much less than an engineer, even though the former does a lot more important work because children are our future. As a nice bonus for leftists, they often get to hitch their "women are oppressed" wagon to this, so that they can cry that "patriarchy" doesn't value women's work as much as men's work.
In reality, the price of work is determined in the free market based on supply and demand just like the price of every other service and product. The salary of a given job ultimately has nothing to do with the question of how "important" that job is, but it depends on how difficult it is to find somebody competent enough and willing enough to do it. If the prices of the seller and buyer meet, the job is created, otherwise it is not. Some jobs can be absolutely essential in the sense that the whole society would totally collapse if it wasn't done, but if there are a lot more people willing to do it than there are job openings, that job will not pay as much as some other job that is extremely difficult to do well enough and there is a scarcity of people who are able to do it.
If you try to legislate the price of something to be higher than it would be in the free market, the sellers won't be able to move the product for the lack of interested buyers, and will either have to move on to some other business or sell it for less in a black market. The job market is no different in this respect from any other market. If anybody disagrees with this, very well: since the society would collapse without garbage collectors, who have to do heavy and smelly work so that the others may live in clean homes, let us start paying these men an annual salary of $100,000, and hike the fees of garbage collection accordingly to cover the cost. Economics 101 will correctly predict what would happen, much to the dismay of leftists. And while we are at it, shouldn't the minimum wage be something like $100 or so?
A lot of opposition to pregnancy outsourcing seems to stand on the emotional appeal that says that every year, a hundred thousand Indian women die because of medical complications of pregnancy and childbirth, so it is wrong to pay some poor woman in India "only" $5,000 for risking her life that way. Well, I certainly hope that none of the people who oppose pregnancy outsourcing on this principle then use electricity that was generated with coal, eat Atlantic lobsters (or any ordinarily farmed wheat for that matter, since being an ordinary farmer is surprisingly risky work), since the jobs required for these purposes also require some people to risk their lives for compensation. A hundred thousand annuals deaths is a great soundbite, but we should remember that this is a nation of a billion people that is generally unimaginably poor and most women probably don't even get to see doctors. I am more than willing to bet that the pregnancy-related death rate among the healthy young women who are selected to work as pregrancy surrogates and get the appropriate health care for it is significantly lower than that of the whole nation. And even if it wasn't, any Indian woman can then use the $5,000 to lower her other, statistically more significant risks of death.
One could also ask why it is "wrong" to pay the Indian woman the local market rate $5,000 for surrogate pregnancy instead of the American market rate (perhaps $50,000 or so), when it is quite OK to pay local rates for everything else in India. When you go to India and take a taxi or eat at a restaurant, is it immoral to pay only whatever the local rate is (probably something like $1) instead of paying whatever these services would have cost in, say, New York? If the leftists were consistent, they would demand that all people who travel to India must still pay the same price for everything that it would have cost in their home countries, since if they pay only the local free market prices whenever they take a taxi or dine out, they are clearly exploiting the poor!
Of course, leftists understand how silly they would sound if they demanded this in general, so they restrict these demands only to situations where they can appeal to emotion and muddy the waters that way, as is the case with the surrogate pregnancies. If every free and voluntary trade in which one side is significantly wealthier and more powerful than the other is not really free and voluntary and thus immoral, then well, let's hope that Bill Gates enjoys doing all his cooking and cleaning himself, if he doesn't want to be immoral for exploiting other people.
This whole issue is also nicely related to the question of the essential difference between liberals and leftists: leftists are anti-wealth while liberals are anti-poverty. When well-paying jobs go to poor people instead of wealthy people selfishly keeping these jobs to themselves, we would expect the latter group to cheer and the former group to jeer. And lo and behold, this is also exactly what seems to be happening.
As far as I have been able to decipher, leftists honestly seem to believe that each job has some kind of an inherent value that depends on how necessary and important it is for society. Therefore in a fair and just society, some central planning mechanism would determine everybody's salary based on this value of their work, plus of course what they need to live comfortably (to each according to their need, you know). Currently this doesn't happen, and we therefore get terrible unfairness so that a kindergarten teacher is paid much less than an engineer, even though the former does a lot more important work because children are our future. As a nice bonus for leftists, they often get to hitch their "women are oppressed" wagon to this, so that they can cry that "patriarchy" doesn't value women's work as much as men's work.
In reality, the price of work is determined in the free market based on supply and demand just like the price of every other service and product. The salary of a given job ultimately has nothing to do with the question of how "important" that job is, but it depends on how difficult it is to find somebody competent enough and willing enough to do it. If the prices of the seller and buyer meet, the job is created, otherwise it is not. Some jobs can be absolutely essential in the sense that the whole society would totally collapse if it wasn't done, but if there are a lot more people willing to do it than there are job openings, that job will not pay as much as some other job that is extremely difficult to do well enough and there is a scarcity of people who are able to do it.
If you try to legislate the price of something to be higher than it would be in the free market, the sellers won't be able to move the product for the lack of interested buyers, and will either have to move on to some other business or sell it for less in a black market. The job market is no different in this respect from any other market. If anybody disagrees with this, very well: since the society would collapse without garbage collectors, who have to do heavy and smelly work so that the others may live in clean homes, let us start paying these men an annual salary of $100,000, and hike the fees of garbage collection accordingly to cover the cost. Economics 101 will correctly predict what would happen, much to the dismay of leftists. And while we are at it, shouldn't the minimum wage be something like $100 or so?
A lot of opposition to pregnancy outsourcing seems to stand on the emotional appeal that says that every year, a hundred thousand Indian women die because of medical complications of pregnancy and childbirth, so it is wrong to pay some poor woman in India "only" $5,000 for risking her life that way. Well, I certainly hope that none of the people who oppose pregnancy outsourcing on this principle then use electricity that was generated with coal, eat Atlantic lobsters (or any ordinarily farmed wheat for that matter, since being an ordinary farmer is surprisingly risky work), since the jobs required for these purposes also require some people to risk their lives for compensation. A hundred thousand annuals deaths is a great soundbite, but we should remember that this is a nation of a billion people that is generally unimaginably poor and most women probably don't even get to see doctors. I am more than willing to bet that the pregnancy-related death rate among the healthy young women who are selected to work as pregrancy surrogates and get the appropriate health care for it is significantly lower than that of the whole nation. And even if it wasn't, any Indian woman can then use the $5,000 to lower her other, statistically more significant risks of death.
One could also ask why it is "wrong" to pay the Indian woman the local market rate $5,000 for surrogate pregnancy instead of the American market rate (perhaps $50,000 or so), when it is quite OK to pay local rates for everything else in India. When you go to India and take a taxi or eat at a restaurant, is it immoral to pay only whatever the local rate is (probably something like $1) instead of paying whatever these services would have cost in, say, New York? If the leftists were consistent, they would demand that all people who travel to India must still pay the same price for everything that it would have cost in their home countries, since if they pay only the local free market prices whenever they take a taxi or dine out, they are clearly exploiting the poor!
Of course, leftists understand how silly they would sound if they demanded this in general, so they restrict these demands only to situations where they can appeal to emotion and muddy the waters that way, as is the case with the surrogate pregnancies. If every free and voluntary trade in which one side is significantly wealthier and more powerful than the other is not really free and voluntary and thus immoral, then well, let's hope that Bill Gates enjoys doing all his cooking and cleaning himself, if he doesn't want to be immoral for exploiting other people.
This whole issue is also nicely related to the question of the essential difference between liberals and leftists: leftists are anti-wealth while liberals are anti-poverty. When well-paying jobs go to poor people instead of wealthy people selfishly keeping these jobs to themselves, we would expect the latter group to cheer and the former group to jeer. And lo and behold, this is also exactly what seems to be happening.
Yes, that's just it: leftists traditionally believe in the labour theory of value, which, when they are confronted with the fact that some forms of labour are patently useless, boils down to the idea that each thing and job has its own inherent value.
If you've read anything about the happyface neo-Communist program called "Participatory Economics", you'll note that it calls explicitly for a shift from remuneration for results to remuneration for effort expended.
Posted by Otto Kerner | 11:47 AM
As you so ably demonstrate, the leftist charge of "exploitation" is poorly supported and inconsistently applied; however, some questions are not comprehensively explored using exclusively economic analyses. For instance, surrogate motherhood was a hot topic in the 1987-1988 time frame during the Mary Beth Whitehead case.
Mary Beth Whitehead contracted to be a surrogate mother for $10000, and then tried to back out of the deal. But the way the contract was written was that the $10000 was to be paid only on the production of a live baby. So it really wasn't "renting a womb." It was, in fact, selling a human being.
I can understand how supporters of surrogate motherhood might object to characterizing this transaction as slavery, given the word's connotations with America's antebellum past. Much can be said about this, but the point is that something can a free and voluntary exchange perfectly in line with capitalist principles and still be morally WRONG for reasons having nothing to do with economics.
Posted by Φ | 5:17 PM