Based Camp - Robin Hanson's Novel Solution to Low Fertility Rates

00:00:00.000 Hello, everyone. We are so excited today. A little bit fanboying and girling out because

00:00:05.160 we are joined by the fantastic, brilliant, and super fun Robin Hanson. He, in addition to being

00:00:12.280 a professor of economics at George Mason University, has written some of my favorite

00:00:16.200 books, including The Elephant of the Brain, which is just mind-blowing, and The Age of M.

00:00:20.960 He talks about prediction markets, grabby aliens, signaling...

00:00:23.800 Well, Simone didn't know that he had invented the term grabby aliens. I didn't know he had

00:00:27.940 invented the term great filter. This is in regards to the Fermi paradox. So genuinely,

00:00:32.800 like a huge figure in terms of, and being at the, we go to these events where it's all

00:00:38.540 like young, like up and coming, like supposed to be all the smartest hip young people. And he's

00:00:43.360 always at these events because he is considered like the one person not in our generation who is

00:00:49.580 seminal to these communities. He's so with it. He's so with it.

00:00:53.320 So what we're going to talk about on this one is we were giving a lecture at one of these that

00:00:58.720 have been called Manifest about pronatalism. And he just dropped this idea about how it could be

00:01:05.540 solved that we had never heard before and was really interesting. And we want to go into it.

00:01:10.960 Would you like to know more?

00:01:11.820 All right. So let's first acknowledge that any solution requires some policy people to do some

00:01:20.060 things. And if they don't do certain things, it doesn't happen. And I'm honestly not that optimistic

00:01:25.580 the right people would do the right thing here. And we could talk a bit about that. So the fundamental

00:01:31.320 problem is a lot of things in our culture are oriented toward low fertility. And a lot of people

00:01:38.200 really like those things. That is, they're really deeply attached to intensive parenting,

00:01:43.140 long years of schooling, delayed mating, gender equality, and there's a whole bunch more. And

00:01:50.120 any solution that induces high fertility is going to cut into some of those things. And so even if we

00:01:56.860 could get people to adopt a solution we're about to tell you, and they try it for a while, there's a

00:02:01.340 risk that they'll see that in fact it cuts into those things. They'll go, oh no, oh no, we can't have

00:02:06.000 that. And then they would turn it off because they'd rather have declining population and low

00:02:11.280 fertility than to have some of those things. That I think is a fundamental risk. That is just a

00:02:17.540 fundamental cultural conflict. And a lot of, maybe even the majority of elites really prefer the package

00:02:23.560 that leads to declining population, even when they understand that they could do otherwise, but doing

00:02:30.500 otherwise will change some of these key parts of their culture that they're really attached to. So

00:02:34.020 that's my fundamental warning. But given that, if you're willing to prioritize

00:02:39.460 fertility high enough, i.e. doing what it takes to raise fertility, I think there is in fact a simple

00:02:46.240 solution. So first of all, there's a lot of studies on how incentives to increase fertility and their

00:02:55.140 effects. And so there are definitely a lot of studies that show small incentives have pretty small

00:02:59.120 effects. And then there's some studies that show modest incentives have modest effects. And as an

00:03:05.260 economist, I feel really confident huge incentives should have big effects. There's just no question, right?

00:03:12.360 If you gave people a million dollars per baby, there's going to be a lot of babies, okay? That's just going to

00:03:18.640 happen, right?

00:03:19.100 And businesses would be started around that, you know?

00:03:21.360 Exactly, right? Now, if I say that, then people will say, how could we possibly afford that,

00:03:26.700 right? Because now you're imagining we're going to have to tax everybody else to pay for this,

00:03:31.020 and that's going to be a huge tax, and we're not going to like it, right? So the key observation is

00:03:36.880 that we don't have to pay for it. We can make investors pay for it. So here's the trick. So at

00:03:45.200 the moment, in say the US, we have roughly $100 trillion in debt. That's not just the explicit bonds

00:03:53.920 we've sold, but also the promises we made, like Medicare and Social Security, that we haven't set up

00:03:59.820 a way to pay for it, which is debt. We owe it, okay? And if you divide that by 300 million people,

00:04:06.540 that's $300,000 a person. And there are some other estimates of unfunded promises that are even

00:04:14.160 higher, say $700,000 a person. Even the literal debt per person in terms of bonds is $100,000 a

00:04:22.060 person. So we're talking somewhere between $100,000, $700,000 a person that's owed at the moment in

00:04:28.680 the US in debt. Okay, so here's the key observation. The way we've decided to pay taxes, it may not be

00:04:34.440 just or right, but how we do it. Every time a new baby is born, we saddle them with their fraction of

00:04:40.620 that debt. They're just on the hook to pay one out of 300 million fraction of that debt. That's how we

00:04:48.680 do it. We basically take all citizens alive and we say, you all owe this debt. So every new baby

00:04:54.340 literally owes $100,000 to $700,000 of debt and is expected to pay it in terms of bondholders are

00:05:02.580 buying these bonds because they expect them to actually get repaid. So if we go with sort of the

00:05:08.600 bondholders perspective on debt, then they're expecting every new baby to pay another, say,

00:05:14.520 $300,000 of the debt. And so that means it's worth it up to $300,000 to create a new baby

00:05:22.760 because they're unhooked to pay that part of the debt. So if we paid a parent, say, $200,000

00:05:29.200 to make a baby, and then they're going to pay us $300,000 in present value, this isn't just future

00:05:35.280 pay, this is the present value of all that stuff, then we're making $100,000 profit.

00:05:39.960 Yeah, so let's talk about this functionally because I think when we talk about it in terms

00:05:43.960 of dividing up the debt, it can sort of confuse people because they're like, well, this is negative

00:05:47.600 value, but it's not exactly negative value because you can buy and sell debt, and this debt might not

00:05:51.880 be paid back as is. So we could almost think of this as, and tell me if I'm explaining this wrong,

00:05:58.280 but I'm trying to explain it in simpler terms. When a person has a kid, companies can sort of buy

00:06:05.940 parts of that kid's future earnings. So when that kid is paying taxes, a portion of those taxes might go

00:06:13.000 directly to the government, but then a portion of those taxes would go to paying off this debt,

00:06:17.220 which is owed on this kid.

00:06:19.600 Right, so you're jumping ahead. I didn't say how we would hand the money out.

00:06:23.880 Oh, okay.

00:06:24.260 Now you're talking about how to hand it out, which I agree is an important thing. But I'm just trying

00:06:28.180 to first say, on average, a random kid, we should be willing to pay not $300,000, but we should also

00:06:34.500 be willing to issue more bonds to cover it. That is, we don't actually need to pay up the money

00:06:40.940 among ourselves. We could just issue more debt, say $300,000 of new debt for every kid,

00:06:45.960 pay their parents $300,000 to have that kid, and then we're all better off.

00:06:51.200 And it's a net neutral, at least with that.

00:06:53.040 But that's on average. You want to talk about, well, how exactly do we pay, and how maybe do we

00:06:58.960 pay some people more than others? And that was the subtlety you were about to get to, I think.

00:07:02.880 Yeah, so I mean, the really brilliant thing about this, and I've heard some other mechanisms

00:07:07.040 that try to solve the problem the same way, is one of the big problems with pronatalism is you

00:07:11.260 just say every human life is worth X same amount. Well, that money isn't worth the same amount to

00:07:17.680 all citizens. And it is going to be disproportionately of highest utility to the lowest productivity

00:07:24.000 cultural groups in our society, because they have less money. And so they will be motivated to have

00:07:30.340 more kids, which leads to negative social effects. But this accounts for that and gives additional

00:07:39.400 money to groups that regularly, and there's many ways these groups could be. It could be cultural

00:07:45.000 groups. It could be some sort of factor of where you live. It could be where they go to school. It

00:07:48.040 could be where the parents went to school. But there are going to be correlating factors with families

00:07:52.540 that raise kids who earn lots of money and are productive citizens, and they will be rewarded for that.

00:07:58.480 But what's really interesting is they're rewarded for it at a narcissistic level. So today, I, as a

00:08:05.020 parent, do not get rewarded in any way by society for doing things for my kids, which are likely to

00:08:12.200 make that kid an active and positive contributor to society. But to him, this would be an active way

00:08:17.940 to earn more money. So suppose like we're Mormons, right? And our local Mormon church could be like,

00:08:23.600 oh shit, like this is a good way to earn more money. Like it's a little scam or like Jehovah's 1.00

00:08:26.800 Witnesses or something. Cause you know, Jehovah's Witnesses, they don't send their kids to college. 1.00

00:08:29.220 So they would get almost no money from a system like this because they'd be considered very bad

00:08:32.500 bets. But they could be like, oh shit, like I just found out how we scan the system. What if we make 0.98

00:08:37.040 all our kids like really successful and like high contributors? And yeah, continue.

00:08:40.680 So let's walk through the mechanism. So I'm afraid we might be losing our audience here.

00:08:44.100 So first of all, we get you to agree on average, people are valuable. And in fact,

00:08:49.340 the nation would just make a profit on average by paying parents to have more kids.

00:08:53.840 And that money could come from investors. So it doesn't have to come out of taxes,

00:08:58.320 at least current taxes. And I can convince you then that the first step, hey, we ought to be just

00:09:03.760 paying a lot for kids. But you might say, if we pay the same amount for any kid, we've got this

00:09:08.100 problem. They're going to dish up the less valuable kids and a lot more of those. And there's not an

00:09:13.820 incentive to make the more valuable kids, right? So now under this scenario, the reason why we want to

00:09:18.740 make kids is that they'll pay taxes in the future, right? So then a simple thing is, well,

00:09:23.460 what we want to do is pay the parents in proportion to how much taxes these kids will pay. 1.00

00:09:29.140 And you might think, well, how can we figure out that? How do we take a kid and figure out how

00:09:32.320 much taxes they'll pay? And the answer is simple. You just make an asset, which is a fraction of

00:09:36.820 their taxes paid. That is, every year, somebody pays taxes to the government. That's a stream of

00:09:43.560 money that goes to the government. That stream of money can be turned into an asset. Somebody can own

00:09:48.680 that stream of money and you can chop off fractions of it. So you could say, chop off 20% or 25% of

00:09:55.240 the money this kid is going to pay to the government in taxes and turn that into an asset and basically

00:10:00.600 give that asset to the parents. This is what you own as a result of making this kid. And you can either

00:10:08.940 hold onto it for its future returns, or you can sell it off to investors at whatever price you pick.

00:10:13.740 But now we've given you the parent an incentive to make that asset worth more. The more you can convince

00:10:19.220 investors that this kid will pay more taxes in the future, the more they'll be willing to pay for that

00:10:22.920 asset, and the more you will get compensated as a parent for having this kid.

00:10:26.860 So this would happen only after your child becomes an adult then. So, right?

00:10:31.680 Right. But you could sell the asset initially. That's the whole magic of investments. Like a company

00:10:36.900 might have a product that isn't going to make money for 20 years, but you can sell the stock right now.

00:10:42.640 Yeah.

00:10:43.280 People and get the money up front.

00:10:44.940 So yeah, parents would have the ability to sell it right away. And if people believed the parents

00:10:49.520 would raise a kid that would make a lot of money, then... Do you know, just from the numbers,

00:10:56.920 do you know if there's a high correlation between the tax revenue across families, across generations?

00:11:03.580 There's a substantial correlation, but it's not 1.0.

00:11:06.420 Okay.

00:11:06.860 There's a regression of the mean.

00:11:08.020 So there's a few really important notes of this that I think wouldn't immediately be

00:11:12.820 intuitive to people. One, I want to talk about two industries this would create. And two,

00:11:16.200 I want to talk about something that people think would be common, but would actually be 0.87

00:11:19.000 a pretty dumb move. I think a lot of people would immediately think that wealthy families

00:11:23.240 would buy off their own kids' debt things, or keep them in the family, basically, so that

00:11:29.600 the kid would never have to pay this portion of their taxes. This would actually be a pretty

00:11:35.120 bad move. And the reason why it would be a bad move is whoever owns your debt or certificate or

00:11:43.660 whatever you want to call it has a huge incentive to ensure you do well in life. And so you would

00:11:50.700 disproportionately want to sell these to groups that are going to promote your kid. So suppose

00:11:57.960 it's owned by a major financial firm. Now that financial firm has a reason to hire your kid.

00:12:01.780 Suppose it's owned by Google. Now Google has a reason to ensure that your kid is created in

00:12:05.820 coding and hire them and pay them. But what's really fascinating is it allows for middling

00:12:11.740 cultural institutions to come into existence that don't exist now. So you could have something that's

00:12:16.800 like a private school, right? That basically acts as a daycare for the kid, teaches the kid

00:12:22.640 middle school, teaches the kid high school, maybe even gives them college. And these institutions

00:12:28.100 would essentially buy at a discounted price, kids from families whose economic circumstances

00:12:36.280 prevent that kid from reaching their potential full potential. And then those institutions could

00:12:42.320 then make money on the arbitrage there. By low, so high.

00:12:46.400 Through the way that they play a role in raising the kid, increase the kid's lifetime value.

00:12:53.500 It's like human private equity. Right. Yeah. So let's distinguish two things here because they

00:12:59.320 can get kind of mixed up. One is the idea of taking the stream of payments you send to the

00:13:05.440 government and creating an asset out of that, that then whose value can be increased by moving that

00:13:10.740 asset into the hands of people who can better act on it. I called this a tax career agent, but that's

00:13:16.420 the idea you were talking about. So we can do that with anybody, even today. It's somewhat

00:13:20.540 independent of giving part of it to parents. So my proposal here for fertility is once you have

00:13:26.240 these assets that represent the ability to, you know, the future taxes, you should give a fraction

00:13:32.380 of that asset to the parent as an incentive for them to be a parent, to create a kid. And that's a

00:13:39.420 good solution to the fertility problem. Right. But we don't necessarily want to give the entire 1.00

00:13:45.040 tax career agent asset to the parents, maybe a third of it or a quarter or something, but the

00:13:50.640 rest of it is available there still to be sold to create these other valuable agents. Somebody who

00:13:56.960 owns your future taxes or a fraction of them has an interest to advise and promote you. Yeah. And

00:14:02.040 that's a valuable role in the world. At the moment, the thing is the government is already in this role

00:14:06.460 and they're doing a terrible job. You already have a career agent in the form of the government who gets

00:14:11.340 20% of your income and therefore should be trying to advise and promote you. They just don't do it.

00:14:16.640 If we switch their role to somebody else, we transfer that asset to someone else. Somebody else

00:14:21.080 holding that asset could do better to improve that asset. That would be valuable for everybody.

00:14:26.180 The government gets more out of that. You get more out of it. They get more. It's a win for everyone.

00:14:30.040 Well, and it also seems like it's uniquely a win for lower middle classes because like trust fund kids,

00:14:35.320 from my understanding, are not very good at generating tax revenue. I mean, one, they have all these tax

00:14:39.160 shelters for their financial instruments, but two, they're also typically not generating that much

00:14:43.260 money themselves. So this looks, I mean, I feel like politically it's not so terrible, but you

00:14:47.680 were sort of saying in the beginning of the podcast that you have your doubts that people would get

00:14:52.040 their act together. Policymakers would get their act together, even like broach a subject like this.

00:14:56.160 Right. So there's the two ideas here. So one is the general idea of a tax career agent. The idea of

00:15:01.840 taking the stream of money that goes to the government and turning that into an asset that we sell to other

00:15:05.320 people. That's one idea. And the other idea is just giving part of that to parents as an incentive

00:15:10.840 for parents. So it's that second idea I was initially being worried about. That is, if we do

00:15:16.860 that, if we give parents $300,000 a person on average or something, then they will change behavior.

00:15:22.760 People will go to school less. They'll be less intensive parenting. They will mate earlier in life.

00:15:27.600 They may have more gender inequality. Those things would happen. And then people looking at the

00:15:33.320 consequences might blanch and say, I don't like this. That's the thing I was worried about.

00:15:40.120 Here's the really interesting thing that would be a consequence of this, which is it could

00:15:45.160 essentially end if it turns out that there are not persistent genetic differences between ethnic

00:15:52.820 groups. And if it turns out that a person's social class isn't in any way genetically heritable,

00:15:57.920 it would eradicate those barriers within just a few generations. It could essentially end racism

00:16:04.100 because that would always be a smart arbitrage play in terms of investing money, ensuring that these

00:16:09.860 people are contributing more to society. The problem is, and it would also do this with sexism to some

00:16:15.400 extent. The problem is that if it turns out that any of those things are genetic and any of those

00:16:19.380 differences are genetic, then it would compound them. Yeah. Yeah. Yeah. I wouldn't want to focus

00:16:26.140 people's attention on those promises because as you indicate, they probably won't be realized, but

00:16:30.540 I might focus your attention on who today is making the worst choices of schooling and career.

00:16:37.080 Right. And I think most people presume it's lower class people who are in fact making bad choices

00:16:42.800 there. And these career agents would be very incentivized to help those people make better

00:16:47.960 choices. So then they would get, if you might say, you know, children of the rich probably get,

00:16:51.980 already get pretty good career advice, pretty good school advice. They aren't lacking for good

00:16:57.720 contacts to tell them what jobs to take or what schools to go to. It's lower class people who don't 1.00

00:17:03.000 really get the system and know what the best way to set up their career is. They would then be getting

00:17:08.400 this expert advice from people who really care a lot and they would have the biggest benefits

00:17:13.040 percentage-wise. Yeah. That's fascinating. Well, I mean, the, the, the biggest negative incentive of

00:17:18.560 this would be if it turns out that there are like persistent genetic heretical differences between

00:17:24.160 individuals within the easiest way to quote unquote scam this system, but in a way that ultimately would

00:17:29.760 help society. I always love when systems end up is you just sort of get genetics that you would

00:17:35.580 consider a high likelihood to end up in a high productivity individual. And you just sort of

00:17:41.140 mass produce them. Like you as a company pay for surrogates and then you, you know, have lots of

00:17:46.100 kids and then you handle their education and then you would have sort of corporate families, which I

00:17:51.480 suspect we're going to see systems like this. Yeah. Let's not use the term corporate family. Cause

00:17:56.380 that's like industrial family, industrial parenting, industrial parent. Yes. Yes. Basically

00:18:01.520 scale economies of parenting, large organized systematic structures of parenting. Kind of a little,

00:18:06.800 a little brave new worldy, a little brave new worldy. And I think that would happen and that would

00:18:10.660 freak some people out that that's exactly the sort of thing that would might make some people back off

00:18:14.980 and say, Oh, I don't like this. Yeah. I mean, I also, I also worry about people selecting

00:18:19.700 disproportionately for males because men are higher earners and especially in a world in which women 0.93

00:18:24.260 would be incentivized to probably take more time out of the workforce for reproduction. 1.00

00:18:29.780 That is lower earning. But in this world, that's paid well. That's highly compensated.

00:18:34.600 Yeah. But is that, is that, is that money taxed? I mean, a surrogate I'm sure would be paid well,

00:18:39.140 but when a mother who chooses to, you know, take time off. 0.77

00:18:43.380 Yes. If she was raising successful kids and keep in mind in this world, because one of the greatest

00:18:48.680 signs that a kid is going to be a high productivity individual is going to be that the mother's a high

00:18:52.740 productivity individual, that these women who want to be mothers are actually incentivized

00:18:58.280 to work. Yeah. Because basically their, their, their kids will sell for a higher price or their

00:19:02.600 kids tax tax revenue will sell for a higher price if they themselves are high earners. Correct.

00:19:08.680 Yeah. Or at least look like they could do hiring. So they just have to show a promising young career

00:19:13.360 and then abandon it for, for kids, but then show that they could have continued and they look very

00:19:18.280 promising. Or not abandon it at all. But I mean, I feel like this could also,

00:19:21.800 if it turns out the good way, it would, it would also encourage a lot of, we'll say,

00:19:27.560 so a big problem, for example, like in, in, in Sweden, amazing childcare, like basically they've

00:19:32.040 set up a pronatalist policy set, not dialed up enough, I guess for, to make a difference,

00:19:36.960 but you know, their, their whole hypothesis is, okay, well let's let women have kids and work. 1.00

00:19:41.440 So like great childcare, great education, you know, whatever you need so that women can continue 1.00

00:19:45.540 to stay in the workforce. And if we had something like that, where it was like, okay, great support

00:19:49.180 and you keep working, then that could even encourage women to be both higher career achievers 0.99

00:19:54.540 and even more leaned in mothers.

00:19:57.100 But this system would create incentives for companies to provide that, Simone.

00:20:00.880 Yeah. Yeah, that's true. That's true.

00:20:02.300 As an economist, I have to point out that often people are looking at a problem that's trying to

00:20:07.840 figure out intuitively through their own reasoning, what would be the most cost-effective solution

00:20:11.820 to things? And the economist often says, well, we don't want to take your guess of a most

00:20:17.040 effective solution and make policies that require that. What we want to do is just create the

00:20:21.440 incentive to do the best job and let people figure out what does best. So if we just pay per kid,

00:20:27.480 according to their future tax revenue, that lets the system be open for trying all these different

00:20:32.700 things. Maybe the Sweden approach will work better. Maybe the Hungarian, maybe the Israeli.

00:20:37.160 We shouldn't presume to know. We should just set up the incentive so they can compete. All those

00:20:42.640 different approaches would try to get people to recruit into their thing and they would set up

00:20:47.440 investors to try their approach and then they would try it. And 20 years later, they'd see what

00:20:52.160 sort of kids they had. Yeah. Yeah. Makes sense.

00:20:54.620 I think trying to predict phenomenon you're going to see in the system. Another one that I think would

00:20:58.440 be pretty interesting is I suspect that many religious communities would sort of demand the

00:21:03.240 tithing of a portion of a kid's debt to the religious institution, but then they would become more

00:21:08.860 more motivated to ensure that the kids were successful, which would lead to some really

00:21:13.800 interesting behavior patterns for these institutions, which I'd be interested to see.

00:21:19.040 But I think it would only lead to a lot of net benefit stuff for society. If you consider a good

00:21:24.360 society, a society where a lot of kids are raised productive and happy, but it could be a net negative

00:21:29.720 if you consider a good society, one that is closer to a traditional society.

00:21:32.940 Right. So plausibly say religious communities would gain more from these subsidies. Yeah. They

00:21:39.260 would more eagerly take advantage of them. They'd be more set up to take advantage of them. And then

00:21:43.300 the larger world would see, oh, this is subsidizing religion. And the people who don't like religion,

00:21:47.540 they go, well, that's bad. We don't like that. And that's, again, the danger here. If it works,

00:21:53.500 it'll work probably by changing some substantial things and leaning in some directions. And that'll just

00:21:59.240 put people off who don't like those directions. Yeah, no, you're absolutely right. Well, and I

00:22:03.940 think one thing to remember if you talk about the political viability of all this is how common

00:22:08.600 antinatalism is as an ethical stance among the far left at this point. Yeah. It's really common,

00:22:16.300 not just far left, middle left, even center left. And I've seen it and they consider you can get

00:22:23.300 canceled. I remember when one professor at Harvard was like, well, I'm a fan of your guys, but I can't be

00:22:27.280 known as a pro natalist because I've heard some people have even accused me of potentially being

00:22:31.280 a pro natalist. And I'm like, how is that, that negative a thing? But apparently it's like a

00:22:35.380 cancelable offense. I mean, I think people perceive and guess that in fact, stronger pro natalism

00:22:42.900 policies would change gender equality. That is, it'll induce differences in the gender's life patterns 1.00

00:22:49.900 and what they do. And they don't like that. And I think they think advocating for that makes you an

00:22:56.520 evil person. Gender equality depends on pro natalism because if you don't have feminist people having 1.00

00:23:01.580 kids and passing on that culture, there will be no feminist. But they are within their lifetime, 1.00

00:23:05.780 Simone. They don't care about future people. And they think of it as a percentage thing,

00:23:09.860 you know, just what percentage of the world is doing different things. The absolute size of the

00:23:13.640 world is not really part of feminism in most people's minds. Yeah. Well, this is fascinating. 1.00

00:23:20.860 Would you have any other thoughts about, so if you were going to implement this,

00:23:23.760 like realistically, well, I mean, we are looking at doing that charter city saying,

00:23:27.200 Timon, we could work this into the way the tax card works. Oh my gosh. Yeah. That's a good idea.

00:23:31.080 Yeah. Now notice that the reason that this tax, you know, thing works is because we have a lot

00:23:36.920 of debt, say in the United States. So it's an especially easy to make the argument for nations

00:23:42.220 that already have a lot of debt. If you're starting a new nation with very little debt, great for you.

00:23:46.900 Good job. But then I've got the problem while I don't actually have, you know, the same argument

00:23:53.400 to give about why you should be issuing more debt. Yeah. Well, what we would do is we would just do

00:23:59.780 it to say that a portion of a kid's taxes go to just get split off to go to a private corporation,

00:24:04.920 basically. And, and the, by default, parents can buy and can, can not sell these and keep these.

00:24:12.340 And then the kids don't have to worry about it. Now, a lot of people would be freaked out that

00:24:15.200 parents were trading a part of a kid's future to a company. And so you'd want some portion of the

00:24:19.580 kids, some parents, basically all you're doing. And I think you really clear. Essentially I could

00:24:27.560 go and make this agreement with someone in our society today, but because it's so hard for

00:24:32.800 corporations to collect on my income right now, it functionally wouldn't work. There's not good

00:24:38.260 mechanisms for doing this at scale. However, if you used existing tax systems to do it, you could do it

00:24:43.980 at scale, which would allow for these economic patterns to emerge. You don't actually need the

00:24:49.720 debt argument. You just say, okay, half of a person's taxes are basically paid. Right. So

00:24:53.720 actually a few years ago, I said the generic solution to the fertility problem is just to

00:24:59.040 allow parents to endow kids with debt or equity, because then the parents, you know, are investing

00:25:04.660 in this kid. Now, the problem there is most people see parents endowing kids with debt or equity

00:25:10.000 as some kind of slavery. And they go, oh, that's terrible. The parents are owning part of the kids,

00:25:14.800 but apparently they don't mind that when nations do that. Nations endowing kids with debt. That's

00:25:20.040 fine. That's not slavery. So it's only slavery when individuals do it, but not when nations do it. So

00:25:24.960 that's why, you know, there's an attractive option to having the nations pay for kids because

00:25:30.620 they're allowed to endow people with debt and equity.

00:25:34.160 Well, a really interesting thing you could do if you did this is make it sort of legally mandatory

00:25:39.980 that this is the only way that the university system can collect money through improving kids'

00:25:46.560 net value to society. And that way you wouldn't have them putting, you know, just, just charging

00:25:52.120 kids an arm and a leg for nothing.

00:25:54.720 You could certainly try to make universities have a bigger stake in their students, which would be by

00:26:00.840 saying you can only, tuition can only be in the form of, of these sorts of tax shares.

00:26:05.880 Yeah.

00:26:06.300 But of course they would presumably just sell them as soon as they could. So now you have to require

00:26:10.800 that they hold them for a long time. And now you've got a lot of budgeting problems there.

00:26:14.500 Yeah. That creates issues.

00:26:15.840 Yeah.

00:26:16.240 Very interesting.

00:26:17.160 Do you think that there's a particular nation, one that presumably has a lot of debt already,

00:26:20.900 aside from the United States that could possibly be convinced to consider this? Or do you think

00:26:25.780 the United States is the most likely, likely nation here?

00:26:29.280 So, so the nation, the developed nation that most has the highest fertility is Israel.

00:26:35.120 But there's a problem in the sense that if you think you have a cultural solution to the

00:26:39.880 fertility problem, then you're less eager for this financial solution. 0.97

00:26:43.360 Right.

00:26:44.240 Yeah.

00:26:44.500 But you might want to double down and do both. So then the problem is like, you go for some other,

00:26:48.700 like the United States is financially well set up because we have a big debt,

00:26:51.640 but then we're not culturally as inclined to do it.

00:26:54.240 Right.

00:26:54.680 So part of the problem here is if you are inclined to adopt this proposal, it's because

00:26:58.780 culture is in the direction of promoting fertility, in which case you less need the solution.

00:27:03.720 The solution is most needed by the ones least likely to adopt it. And that's true for a lot 0.99

00:27:08.560 of problems in the world, unfortunately.

00:27:10.600 Well, here is a potential answer to that. This could be implemented through a religious organization.

00:27:17.700 So, for example, the Church of Mormon could essentially do this for all of their members

00:27:21.920 and that the fractional shares would come from tithing revenue from these individuals where a

00:27:28.920 portion of the tithe would go to the company or whoever owns the shares. Now, this would be relevant

00:27:35.240 because the church then would be explicitly motivating people to raise people in a way where

00:27:40.700 they didn't deconvert from the church, which is also in their best interest.

00:27:44.840 Although they don't like to advertise such an explicit motivation. So, for example, the most

00:27:51.840 successful group like this in the US is the Amish. They are very successful at a 93% retention rate

00:27:58.580 and they are doubling every 20 years. And so they have maintaining a high fertility and a high

00:28:03.520 retention rate. But I think they go out of their way to kick teenagers out and say, go see the world

00:28:10.000 and to say, look, it really is your choice. We're not pressuring you to come back. And that's part of

00:28:15.780 the reason why kids might come back and be persuaded. They might look worse if they said, sure, you can go,

00:28:22.860 but look, we've got all this debt tied into you and we'll lose money to leave. That might not sell so

00:28:27.960 well, right?

00:28:28.600 Yeah.

00:28:29.000 Yeah.

00:28:29.680 Yeah.

00:28:29.880 Yeah. Fascinating. Fascinating.

00:28:32.060 Yeah. This is still the, what bothers me most about financial incentives on the prenatalist front

00:28:37.700 is that there are a lot of people out there who are just like, no, no, no. We need more money. Give

00:28:42.100 parents more money. No one has an answer. And what I love about this is you're like, nope, here's exactly

00:28:47.560 how it can be done. This is why it would be done. This is why it's practical.

00:28:50.580 Well, it's worth repeating then. Yes. We're going to give a lot of assets to each parent. It's going

00:28:56.200 to be worth, say on average, $300,000 or more, but we're going to give it in the form of an asset

00:29:02.820 that represents future tax revenue first, so that it's not just giving everybody the same amount of

00:29:06.600 money. And secondly, we're going to pay for that by issuing more debt. Because in fact, the investors

00:29:11.600 will say, yeah, you can cover that. So say if you have a house, if you just are spending more than

00:29:16.900 you earn and want to take out a loan in your house, investors should go, oh, I need to make

00:29:21.320 sure you can cover that with the house because you might not be able to pay. If you build an

00:29:26.080 addition to the house and you want to take out a loan for that, investors will go, oh, yeah, sure.

00:29:30.940 I'm happy to back your bigger loan on the house if you have a bigger house because you're going to be

00:29:37.140 able to pay that back. So that's what we're talking about here. When you have another kid,

00:29:40.300 you're adding on to the house, you're making it a bigger, more valuable thing, and it's perfectly

00:29:45.160 reasonable to have a bigger debt on it. Yeah. So this talk has been fantastic. I've really enjoyed

00:29:52.280 it. We'd love to have you back on. And thank you so much for your time. I love this solution because

00:29:57.900 I do think it's one of the few financial solutions that I think is very realistic and viable, just

00:30:03.000 very difficult to get past at the level of a nation state until they begin to panic.

00:30:06.640 Keep in mind, one, they are going to panic, and two, all of the antinatalists are going to die 0.78

00:30:11.580 and not have kids. So maybe the future. Eventually. Yeah. You know, give it time.

00:30:15.640 Give it time. All right. Thank you so much. So this is, we're ending, we're ending, Simone.

00:30:22.100 Yes. Ending the episode. So we're going to do the next episode. I'm going to go use the restroom, 0.96

00:30:26.560 go get a beer. I'll be right back and get ready to introduce him for the next time. I would have

00:30:31.040 brought a beer. This is, this is our, this is our happy hour. This is our, yeah, we, we like basically

00:30:36.560 live on UK times. It's like eating for Malcolm gets up every day to start working at 2 30 AM.

00:30:43.000 So yeah, where do you physically live in California? We're on East coast. We're, we're like right by

00:30:47.580 New York, but yeah, Malcolm just likes working when no one else is conscious. So you don't get

00:30:51.920 interrupted that way. It's really nice. Not going to lie. Yeah. And then later on, when you have

00:30:56.500 meetings in the day, you can be kind of tired, but people don't care that much if you're tired in the

00:30:59.640 meeting. Yeah, no, they don't notice. They don't notice at all. So it's totally fine.

00:31:03.540 Yeah. I, I, I still really love this. I think that there's, there's a way in our lifetime to

00:31:09.360 get people seriously talking about this. There will be some serious panics about it. I guess

00:31:13.260 what I worry about is that politicians are never really incentivized to look at anything beyond

00:31:17.300 their term. So, you know, if you're interested in what projects could be done, it would be possible

00:31:21.940 to fund a trial of the tax career agent trial. What you just do is take a bunch of people and you'd

00:31:29.200 make tax agents for them by creating an asset that pays as much as they'll pay in taxes, but it

00:31:34.780 doesn't come from the government. So you don't have to get the government involved in a trial.

00:31:38.060 Right. You just create a trial where you say, basically when we give people these tax career

00:31:42.700 agents, does that help? We just do a trial of seeing whether those people with this agent who

00:31:47.620 gives them advice and promotion, whether they actually make more money. Yeah. You could do a trial

00:31:52.340 of that. And I've done some blog posts on roughly how much that would cost, but there's some clever

00:31:56.160 ways to make it cheaper, but still that would seem a kind of thing that would then launch the idea of

00:32:01.960 selling tax assets as a thing by showing that in fact, there's value there. That's somewhat separate

00:32:09.100 of the fertility part. Yeah. But it would still, I mean, that, you know, if we can make that small

00:32:13.540 case, then we can make a bigger case that can actually affect the numbers. So that would be huge.

Based Camp - October 24, 2023

Robin Hanson's Novel Solution to Low Fertility Rates

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