Recently I read a very peculiar news report. It said that the Spanish government has appointed what the media are calling a “Sex Tsar”. It is officially a “commissioner for the demographic challenge”, whose job is to persuade the people of Spain to have more sex, and by extension, more children. The Spanish are not alone. In 2016, the Italian government ran a “Fertility Day” campaign to get people to have more babies. The Swedish government has initiated a study into the sex lives of its citizens, to find ways to increase the amount of sex Swedes have.
If that was all there is to the story, we could chalk it up to politicians being their usual ridiculous selves and have a good laugh about it. But this nonsense has serious economic causes and potentially far reaching consequences.
The Welfare State
In each of the three cases, the main reason governments wanted more children was to save the welfare state. The welfare state is the biggest Ponzi scheme on Earth, as the great economist Milton Friedman explained.
As long as there are more tax payers (young, working people) than those who are receiving benefits of the welfare state, the whole operation runs fine.
The problem starts when people have fewer babies, as in Europe. This will result in a larger number of old people depending upon the government, which will have to tax a smaller and smaller working population to finance the benefits. Without new fools to con, the Ponzi scheme will collapse. Even Paul Krugman understands this elementary fact about welfare schemes like Social Security.
Immigrants could compensate for the shrinking population in Europe and increase the tax base for governments. But the governments have closed borders to refugees from Syria and other countries (due to political compulsions), making immigration more difficult precisely when they need more people. If they cannot get more taxpayers through migration, the only alternative is to get their citizens to have more children.
A Little History Lesson
In 1807, the United States Congress outlawed the import of slaves, akin to the immigration controls in modern Europe. Because slave masters could not get in more slaves from Africa, they established “breeding farms”, as Ned and Constance Sublette describe in their book titled “The American Slave Coast”.
On these breeding farms there were far more women and children than men. Slaves were encouraged to have stable family lives. As economic historian and Nobel laureate Robert Fogel explained in his book “Time on the Cross”, most slaves were sold with their entire families, or only when a slave wished to separate from his family. In fact, as distinguished economists Thomas Sowell and Walter Williams have pointed out so often, more black children were raised in two parent families during slavery, than are today.
Was this because slave owners had any love for their slaves? Not by any stretch of the imagination. The slave owners simply wanted to maximise profits by encouraging their slaves to have more children. They gave rewards to women for having children, similar to the tax benefits or payments offered by a welfare state. Just as politicians can stay in the welfare business only if citizens have more and more children, the slave owners could stay in business only if slaves had more and more children. They knew that, and acted purely in their selfish interests, just like politicians.
Next, Fogel pointed out that living standards for slaves in the South were comparable to those of free workers in industry. The master ensured the welfare of his slaves, just like the modern welfare state.
There is yet another striking parallel between the welfare state and slavery. People such as George Washington and Thomas Jefferson, who believed that slavery was a terrible thing. Jefferson called it a “great political and moral evil”. Yet they continued to hold slaves. They justified it by saying that slaves are not capable of taking care of themselves. In the event that they set the slaves free, they argued, the slaves would fall into destitution and suffering. In other words, slaves could not take care of themselves.
This argument made by Washington and Jefferson is exactly the same as that made by proponents of a welfare state. History is bound to repeat itself if people don’t pay attention the first time around.
People in countries that have a growing population, such as the US, or developing countries like India, should learn the lesson before it is too late, and take steps to roll back the welfare state while there is still time, or end up being slaves to the state.