Saturday, 3 November 2007

Asian Gender Imbalance Not a Problem


The guys at Bloomberg are claiming that the surplus males in India and China will have terrible effects on the economy. Normally there are more females than males because men tend to die off. This is what we see in most countries like America and Australia. However, in India and China, for whatever cultural reasons, parents prefer males over females, and so it is estimated that in China alone there soon may be 20 million men who won't be able to find a wife.

This all assumes that women will only have one husband, which may be a reasonable assumption. The article also assumes that these Chinese men who are likely to be very rich in the future, won't be able to find wifes overseas. China, after all, is right next to Russia, where many mail-order brides are. Chinese men could find wifes or girlfriends from Japan, Thailand, Australia, or anywhere.

Some might argue that Chinese men will not want non-Chinese women because of cultural differences. But all individuals have different ways of behavior and unless you marry your sister your girlfriend or wife is not going to be very similar to you. But there's nothing wrong with differences. In fact, most people like differences. Nobody wants to marry their sister (almost nobody).

If there is a scarcity of females then the price of females will go up to reflect this scarcity. If we are to apply libertarian policies to address this issue, we should simply allow the marriage market to freely operate and to make it more dynamic and competitive the Chinese government should open its borders and allow for free immigration and emigration, which will correct any excess supply or excess demand of women around the world. Females will move from one country to another to arbitrage their sexual and non-sexual services.

The Bloomberg article claims that sexual frustration from Chinese males will harm the economy. I disagree. If anything, I believe it will improve the economy. Why? Most people (most men at least) work and make money only for the sake of sex. Men make money so they can invest in status symbols like luxury cars or imported watches. With status symbols the men signal to females their reproductive fitness. Suppose females are scarce. This scarcity means they will demand a higher price. Instead of each Chinese female demanding her man drive a Ford, she may want a man who drives a Mercedes. This increases competition among men, which means more work, which means more economic growth.

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