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The Economics of Marriage : How to Manage A Natural Monopoly

Sanjeev

Sanjeev

Economists are debating the institution of marriage, which guarantees a monopoly in the relationship. Converting the ‘bilateral monopoly’ into a monopsony (single buyer with multiple sellers) as the Muslims do, has not improved the quality of life on both sides. Importantly, Muslim men are no happier with 4 wives than Western men are with one. ‘More is not necessarily merrier’, it would seem, in this small corner of human endeavor.

Declaimer: This article written was originally in November 2015, and some of the data points may be outdated.

The new objective of Economics

The new objective of Economics is the ‘maximizing of happiness’ rather than the maximizing of ‘utility’. The difference is that utility could be maximized to infinity, but happiness has a built-in ‘optimization’ function….i.e., you maximize wealth up to a point, then you shift focus to relationships, then community, in a zigzag manner that economists are still trying to figure out. Your choices are optimizing your options rather than maximizing anything, which makes life complicated, too complicated for the economist to ever figure out with a simple linear equation. It is a good world that the economist cannot figure out, otherwise, how would ordinary mortals ever have a chance to live happy lives?

So if marriage is a place to exchange happiness, how does it compare with friendship, which seems to do a far better job? If a couple can be friends, we know it leads to happiness, but if they can’t, is there an ‘economic model’ that can mitigate the resultant unhappiness?!

The British Govt is sponsoring research into ‘alternate models’ that can replace marriage and child-sharing agreements, and ‘open marriages’ have been considered. But until economists can answer the question: ‘How do you bring “efficiency” and “customer service” into a monopolistic arrangement?…the search for an ‘alternate model’ will continue.

At the heart of this question, are some big sociological trends: 20% of children are single-parent children, 55% of first marriages under 30 end in divorce, more than half of London is single, and the happiness co-efficient has never been lower. This is the loneliest city on Earth, despite being, in GDP per capita terms, one of the highest. Depending on how you set economic objectives, this is either the most successful city on the planet or the unhappiest, who is to say?!!!

That the institution of marriage is breaking down, is no longer in doubt. With rising freedom of choice, especially for women, it is impossible to keep a monopolistic relationship viable. The evolving character of a new society is difficult to guess, and the implications for child-rearing are impossible to accept. But economists have taken it upon themselves to try and evolve a new structure that is better than the old one. A mix of sociology and economics is needed, and in developed countries at least, this is driving Govt policy.

One area is the acceptance of Gay Rights and the acceptability of homosexuality in sexual choice. A century back, this was treated as a crime on par with pedophilia, perhaps worse. Today, it is seen as an orientation, almost accepted as normal. Legal systems have started to accept this, and a big source of criminality has been removed from society.

Child-rearing has 3 distinct areas: toddlers, single parents with small children, and teenage upkeep. Marketplaces are emerging for some areas, like crèches for children and how employers are stepping in to fund infrastructure. Generous maternity leave, child support, crèches, and special employment terms all make up the elements of a childcare program that supports the hapless parent.

One place where there seems to be a serious gap is in the care of the children of divorced parents. Courts are sympathetic to those parents who have to bear the costs of bringing up children, but they need to get teeth to extract more from the recalcitrant ‘other’ parent who is going free. Child support settlements are getting ever more generous, but it is patchy. And since the ability to pay is suspect, the marketplace is unable to step in. Like in the case of the ‘poor man’s disease, philanthropists have to step in to put money where the customer cannot…..the State needs to find foster homes for children who are left without viable parenting

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