Irreversible Decisions

A friend of mine with whom I had dinner last night at a restaurant in Colaba has an interesting job. As he puts it, he gets women pregnant and is paid handsomely for doing it. He is a doctor and runs an in vitro fertilization clinic. There are more than one way of making babies (18 ways, according to his website Malpani Infertility Clinic) and he knows them all.

He has been following this debate. Is it an irreversible decision, I asked? I was refering to Prashant Mullick’s objection which he raised in a comment to the entry The Market for Reproductive Rights.

Prashant told a story in which a poor slum dweller sells his half-child quota and later becomes rich and prosperous and regrets that he does not have a child and cannot have one. Thus, Prashant concluded that the buying and selling of reproductive rights cannot be a market since it differs from other markets where if you regret something, you can always reverse the decision.

Dr Malpani, of the 18 ways to make a baby fame, put paid to that misconception (pun intended.) When a guy gets surgically sterilized so that he can no longer produce babies, the procedure is not irreversible. So Prashant’s slum dweller who becomes rich can go back to the same market and buy many permits and father a whole host of children. Only this time around, he will not be fathering slum dwellers.

Prashant helps illustrate an interesting feature of the market for reproductive rights by his little story. Markets are where trades take place. We normally trade with other people at a specific time in a market, where one party is the buyer and the other party is the seller. But you could imagine a market where the same person is a buyer and a seller of the same thing but at different times (or intertemporal trade). That is, the trade is not between two people but just one person. The slum dweller is the seller of his reproductive right at a time when the money he receives from the sale is extremely valuable to him.

Imagine that he gets Rs 20,000 in cash, an amount that enables him to start his little business and which finally makes him rich in a few years. After becoming rich, now he goes back to the market and buys a permit an amount which he can afford and therefore in effect he traded with himself: his past self sold the permit to his future self. Absent this ability, the slum dweller would not have the Rs 20,000 to start his business, and instead would have an unlimited right to produce as many little slum dwellers as he wishes and these little slum dwellers would in turn produce many many more little slum dwellers in a few years. (In Mumbai you have had that process going on for a few generations and today we have an estimated 8 million–8,000,000–slum dwellers. Give another 25 years, and Mumbai will have 25 million people of which 12 million are expected to live in slums.)

Markets enable trade. Any trade undertaken voluntarily is welfare improving, both for the buyer as well as the seller. Both parties have to see value in the exchange, for otherwise the trade would not take place. The seller has to value the money received higher than the value of the good sold, and vice versa for the buyer. So the slum dweller has to value his reproductive right higher than the money he makes in selling his right. So as a seller he gains. Later, if it ever happens that he values having the right to have a child higher than the market value of a permit to have a child, as a buyer he again gains. Aggregate these sorts of gains over a large population, and the welfare gains are immense.

Selling one’s reproductive right is a reversible decision. Having millions of children without having the resources to feed, clothe, nurture, and educate them is irreversible. At the moment in India’s history, we don’t have the resources, the smarts, the political will, the fundamental ability to care for the millions that are being added every year to the population. We are taking irreversible decisions, one decision at a time. A no-regrets policy is what we need.

Douglas Adams, the author of The Hitchhiker’s Guide to the Galaxy, wrote a wonderful book called Last Chance to See. It is part travelogue, part humor, and deadly serious. It was about the disappearing flora and fauna of the planet. In the end of the book, he recounts a Sybilline tale. I found it so compelling that I copied the story down and if you care, here is Sifting Through the Embers.

It is a cautionary tale. There are problems which I call “the escalating variety”. First, it appears to be no problem at all. Therefore it is considered a pointless waste to consider paying even a modest amount to solve it. In the next stage, the problem becomes more manifest but now the cost of the solution has also mounted. So people say, yes, there is a problem but we can’t afford the solution now; perhaps later when we are wealthier, we will solve that problem. But time goes by and the problem continues to become more acute and the price of solving gets higher and higher. In the end, one pays an enormous amount to solve a problem which one could have solved with very little effort at an earlier stage. I have just explained in many words the wisdom contained in the saying a stitch in time, saves nine.

Please do read the story and when you do, pay special attention to what the old woman says at the end.

Author: Atanu Dey

Economist. View all posts by Atanu Dey