Calculating with kids

By Hans D. Barbier

We shouldn't degrade children as production factors? No, of course not. But this warning shouldn't be directed at economists. It's the talk show participants who speak of kids as cost factors, pension guarantors and key figures of a family policy that is dealing with the social profitability of redistribution programs to secure future gross domestic products.

A society with a future has to be able to reckon with kids - but not in terms of extrapolations telling us that if the reproduction rate doesn't rise, pension payouts will have to drop.

Can we find no other response to the problem of an aging society than child benefit, full-day schooling and penalties for pensioners? How about old-age provisions unrelated to the pay-as-you-go system, even if its historic baggage is immense? Of course the young have to produce what the old consume. But does everything have to be produced by Germans on German soil? Would the formation of fungible capital in a global currency not render aging consumers more independent of the number of domestic producers?

The size of populations matters, but exaggerated concern over the fate of an aging society does not foster a love of children. People should stop calculating output potentials on the basis of the number of people rather than the number of working hours. Future-oriented conception? Yes, why not. Longer working lives to acquire pension rights should also be considered.

A society with a future will and may reckon with children. And it may worry about their education. A good education is a type of capital formation that renders future provisions less dependent on the number of working hands. Education is human capital.

But neither young people nor society as a whole benefit from lower graduation requirements and higher student numbers. Quality counts.

Politicians shouldn't worry about many key figures for 2050 anyway. They should allow citizens to look after themselves - and their children, because whether there are enough of them is nobody else's business.

The author is chairman of the Ludwig Erhard Foundation.
This article first appeared in the Frankfurter Allgemeine Zeitung.