Smart Ass

Very contraversial essay. I would have thought it awesome last year, but it feels just a tad old school this year, and now seems merely good.

Were you able to locate your AP European History essay–Guido the Wonder Chicken Wins the French Revolution? In my opinion, that may have been your first Great Work!

This was my freshman econ essay. How does it compare?

I. Introduction

In many feudal societies, it is a common practice to bequeath a father’s belongings to either his eldest child or the youngest one when the father passes away. These two practices are called primogeniture and ultimogeniture respectively. The former was the rule prevailing among rich people while the later existed only among the poor. In this note, a theory based on property rights and rent dissipation is utilized to examine the economic rationale behind these practices and the different adoptions between the two groups of people.

II. Assumption: selfish or not?

That human beings are self-interested is the most fundamental postulate that has long been adopted by economists since the inspiration of Adam Smith. In modern economics, the term self-interest is interpreted in a more scientific way: constrained maximization. Unfortunately, both these terms do not enable us to grasp what in fact are the agent’s objectives. The former tells us nothing about what the interest of the agent is. Neither does the later specify what the agent are trying to maximize. Even if someone argues that human beings maximize their utility, the assumption itself does not state what constitutes a person’s utility. A wide ranges of interpretations are thus open to us. Therefore, though altruistic it appears to be, an agent who tries to maximize the utility of other people can still be regarded as self-interested if we consider the utility of others to be included as another argument of the utility function of the agent in question.

In the theory put forward below, it is assumed that, among the values of his own belongings, the father is also attempting to maximize the living standard or the welfare of his family members. This assumption should bear no inconsistency to the postulate of self-maximization once we include the interests of other family members into the goals of his maximization. Therefore, in this theory, we can argue that it is the self-interested motive that forces the father into considering the welfare of his family members. Apart from this assumption on agent’s behavioral motive, it is also assumed that the would-be distribution of the bequest is publicly known among the family members before the death of the father.

III. Ultimogeniture and the Optimal Quantity of Children

Under the feudal system, it is not uncommon that a man has more than one wife no matter he is rich or poor and each wife may have children with his husband independently. In most cases, a mother can get share or at least be benefited if the bequest is entitled to one of her children. Therefore, there exists strong incentive among the wives to compete for the right to the bequest for their children. If the property rights of the bequest is exclusive to the eldest child, there will be no vigorous competition among the wives once the first child in the family was born. However, under the practice of ultimogeniture, despite the fact that the bequest is assigned to the youngest child, the right itself is non-exclusive until the birth of the last child of the family. Thus, all wives will compete for the bequest by having more and more children whenever hers is not the last and as long as her marginal private benefit of having one extra child (inflated by her expected benefit under ultimogeniture) exceeds her marginal private cost. Having children does benefit the family, but it is also subject to the diminishing law. Given the system of ultimogeniture, the equilibrium quantity of children will exceed the optimal level for the whole family. Resources spent in bearing and thus raising some marginal children do not generate net benefit to the family as a whole though it may increase the competitive edge of a particular wife. The resources spent in this situation with no claimant in the family and society constitute the dissipation of the value of the bequest. In fact, one should not even be surprised that many alleged children would appear under ultimogeniture. In consequence, additional costs has to be incurred to identify who is the “real” child and who is not. This identification is especially costly for the youngest child than for the eldest one.

Given the same amount of wealth, the living standard per member of the family would be higher if the family contains fewer members. Seen in this light, a father who tries to maximize the welfare of his family will try to maintain an optimal number of members in his family. If the bequest is to give the youngest child, redundant children will be born in the sense that they will not be so if the bequest system is different. Therefore, by restricting the practice to primogeniture, a father can prevent the living standard of his family from deteriorating as well as the value of his bequest from being dissipated.

IV. The Rich vs. The Poor

Nevertheless, the practice of ultimogeniture did exist in some feudal societies and prevailed uniquely among the poor. What’s wrong with our theory? Nothing in fact. The dissipation and the deteriorated living standard associated with utlimogeniture would not occur among the poor. For having more children means, to the poor, having more labor which in turn increase the productivity of the family. The increase in wealth resulted from this increase in productivity would probably outweighs the cost of bearing and raising the children, so the practice of ultimogeniture is justified in the sense that the benefit of practicing it is larger than the cost of doing so. It is in fact a mean to provide incentive to the wives to have more children with their husband. This incentive is especially important to the poor because a poor wife always incurs a higher cost in bearing a child owing to the fact that poor people generally cannot afford good medical service. This cost, which is directly born by the wives themselves, may be in the form of weaken health or even lose of their lives.

The resulting living standard of a family would not be lowered if the additional members of the family do contribute much to it. For many poor families, having more children often increases rather than lowers the living standard of their families because most of their children are sent to work in their early ages. Furthermore, as the bequest of the poor is not so valuable as the rich, alleged children would not appear among them. The reason that the rich cannot enjoy the effect of increase in productivity under ultimogeniture is that children from rich families are normally not required to work hard. They tend to consume rather then increase the wealth of the family. From the above, we can predict that the practice of primogeniture will lose its importance with the widespread of effective contraceptive measures which lower the cost of enforcing the optimal number of children.

V. Conclusion

In a regime of zero transaction costs in which one incurs no cost in enforcing the optimal number of his offspring, there will be no difference between the effects of primogeniture and ultimogeniture on the quantity of children in a family. However, we are living in a world with positive transaction costs. Therefore, the two practices can be viewed as two sorts of institutions invented to minimize the transaction costs in enforcing the optimal number of children under different situations.

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