Monday, 9 July 2007

Becker's Economics of the Family

Nobel-prize winning economist Gary Becker explains the family as a consequence of economic forces. Couples form a family as an economic exchange of services. When members of the family specialize, e.g. the traditional role of the male focusing on market work and the female focusing on housework, the family is exploiting efficiency gains from the division of labor. The formation of the family is analogous to the formation of firms.

As Gary Becker says, "[T]ime and goods are inputs into the production of 'commodities' which directly provide utility. These commodities cannot be purchased in the marketplace but are produced as well as consumed by households using market purchases, own time, and various environmental inputs. These commodities include children, prestige and esteem, health, altruism, envy, and pleasures of the senses."

Because of this equivalence between family and firms in economics, Becker sees benefits in polygamy. In the same way that employing multiple accountants or multiple secretaries can be beneficial for a firm so too a person who employs multiple spouses can lead to greater economic gain.

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