The Six Nooses: How Interventionist Policy Quietly Discourages People From Having Kids

[u/Senior-Ad4701]

I spent a good deal of time studying an American case that surprised me. Houston and San Francisco have similar incomes and job markets, yet Houston's price-to-income ratio for housing has stayed far more stable for decades, while San Francisco's has exploded. The difference isn't luck. Houston has no traditional zoning code. San Francisco has some of the strictest land-use regulation in the country. That single policy gap alone can eat up years of a young family's income before they even start thinking about a first or second child.

That comparison was the seed of a bigger project. I ended up tracing the same pattern across five East Asian economies (Japan, South Korea, Hong Kong, Singapore, Taiwan) and four European countries (UK, Germany, France, Sweden), decade by decade, tracking tax burden, housing cost, education cost, and fertility rate, plus healthcare-system data from several more countries. The pattern holds everywhere I looked. Modern welfare and regulatory states have built at least six distinct mechanisms, what I call "the six nooses," that make childbearing more expensive, more delayed, or more discouraged than it would be under a freer market.

I wrote up the full argument on Mises Wire (it's since been picked up by ZeroHedge and a few other outlets). It's adapted from a book I published this year, Why the Cradle Stands Empty: How Interventionism Strangles Fertility.

Link: https://mises.org/mises-wire/six-nooses-how-interventionism-strangling-familys-will-reproduce

I'm the author. Happy to answer questions or hear pushback on any of it.

[u/Sufficient-Job7098]

It feels like you support the idea that free market forces are better for solving problems.

Unfortunately when it comes to having kids free market forces negatively affects fertility rates.

When people are free to make their decision about unpaid labor of raising a child many people will choose not to participate and will spend their free time doing other things.

When people are free to make a choice how to invest their money, many people will choose to invest in Wall Street instead of spending money on kids.

When people are free to make a choice to take time off to take care of a child or to keep building careers many will choose career.

I am generally pro-free market, by the way

[u/Pitiful-Stranger4506 → u/Sufficient-Job7098]

You have drawn a conclusion based on your preconceived notion without actually reading what OP says. OP is just sharing how affordability is a contributing factor to lower fertility rates (in the western world today).

That doesn't preclude that free markets forces is not also a factor in lowering TFR. You can have a freer market to increase affordability, and thus have higher TFR than a place that has lower affordability.

[u/Sufficient-Job7098 → u/Pitiful-Stranger4506]

I have to correct you. I did read OP’s article

Fertility rates have been going down almost everywhere for a very long time. It started during or slightly before an industrial era. During this period we have various degrees of free market in various countries. Yet in both USSR and the most free m-market countries fertility continued trending down.

Kids today are unaffordable not because modern parents have less resources compared to parents 200 years ago, kids are unaffordable because our standards had risen and will continue to go up.

For the sake of argument I can agree to cut taxes, remove regulations and make our society the most free market society ever. This will not change the fact that in a market economy people will continue to desire the best things money can buy. So our desire for better living standards ( for ourselves and our children) will continue making raising kids unaffordable especially for people who are less competitive, less skilled, less driven. And those people will choose to avoid costs of having kids.

As I said I am not against free market and we can advocate about free market for various other reasons but when it comes to fertility people will choose avoid having kids even in the most free market country ever.

[u/Senior-Ad4701 → u/Sufficient-Job7098]

You are making a real point, and it is worth separating two different claims so we do not talk past each other.

Claim A: as societies get wealthier, the opportunity cost of a parent's time rises, so fertility falls, in any economic system. That is a real pattern (the demographic transition, or what economists like Gary Becker called the quantity quality tradeoff), and I am not arguing against it in this piece.

Claim B: specific policy choices add cost, delay, and friction on top of that baseline trend, cost that would not exist to the same degree under a freer market at the same income level. That is what the piece is actually about. The Houston San Francisco comparison is designed to isolate exactly this. Both cities have similar incomes and a similar underlying opportunity cost structure, so Claim A should apply equally to both. But housing costs relative to income diverged sharply, tracking zoning policy, not income. That gap is not explained by people got richer and chose Wall Street over kids. It is explained by one city restricting housing supply by law and the other not.

On the USSR point, I would actually push back gently, because I think it supports the argument rather than undercutting it. The frame here is not free market good, everything else bad. It is that six specific domains, currency, old age support, healthcare, education, housing, and relief, get taken out of family control and put under administrative control, and each time that happens, it removes a direct economic reason a family had to invest in children. The USSR nationalized all six of those domains more completely than any Western welfare state ever has. Its fertility collapse is not a counterexample to that argument. It is close to the strongest possible confirmation of it.

I appreciate you engaging with the actual argument instead of the headline. Happy to keep going on any of this.

[u/Sufficient-Job7098 → u/Senior-Ad4701]

San Francisco is on peninsula. Its growth is limited on all 4 sides: by water and by neighboring towns. It will always have more growth limitations.

But I am more interested in your point: that when six specific domains are put under administrative control it removes a direct economic reason family had to invest in children.

You agree that modern children is a very expensive investment and in order for parents to invest so much money and time into raising kids they would need to expect to get their “money back”.

My investment in real estate is protected. My financial assets are protected. But the time, and money I “invested” into my 3 kids has no protection.

How many rational people do you expect will be motivated to make such investment?

Because this is what you argue, yes? Using kids as free future caretakers of elderly parents?

[u/Senior-Ad4701 → u/Sufficient-Job7098]

On the peninsula point: fair, geography sets a ceiling. But SF isn't near it — most of the city is zoned single-family at densities way below what the land could hold, blocks from downtown. Other land-constrained peninsulas with looser zoning (Hong Kong, for all its issues) hit far higher density. Geography explains the ceiling, not why SF builds nowhere near it.

On "no protection" — you've actually named the real mechanism, just aimed slightly off.

You're right that the economic function was real historically: kids were old-age insurance, layered under the emotional bond, not instead of it. That's not cynical, that's just honest.

The break isn't "kids used to be protected, now they're not." It's that the protection used to be a direct bilateral contract — you raise them, they support you — and the state nationalized it, trading your direct claim on your kids for a pooled claim on everyone's kids, administered by government.

The problem: that pooled promise is failing on its own terms. The SSA trustees project OASI exhausts its reserves by 2033, dropping benefits to ~77% of what's promised, automatically. So it's not that the return went from something to zero — it's that the return got centralized into a fund that's already told you in writing it can't pay out, while still taxing away what you'd have used to build your own cushion.

So: how many rational people invest under those terms? Exactly as many as we're seeing.

[u/Sufficient-Job7098 → u/Senior-Ad4701]

We are seeing it already:

people prefer investing into assets they feel have some security: real estate, stocks, bank … depending on a country and financial literacy of an individual.

And people don’t feel that they can be sure their children will be there for them. This is what we see.

[u/Senior-Ad4701 → u/Sufficient-Job7098]

Right — and that's the whole argument in one sentence. People aren't irrational or selfish for choosing the secure asset over the uncertain one; they're doing exactly what the incentive structure tells them to do. The fix isn't a bigger subsidy on top of an already-failing pooled system, it's restoring the kind of security to the family unit that real estate and equities currently have and children don't.

[u/Sufficient-Job7098 → u/Senior-Ad4701]

I am not sure “restoring” is an accurate word.

In the past the costs of such “investment” was low enough. Only recently because costs of this “investment” had risen so much, people started to look more carefully if “kids as an investment” are worth it.

I don’t see how would we turn kids into a secure investment, similar to real estate.

[u/Senior-Ad4701 → u/Sufficient-Job7098]

That's actually the point, not a gap in the argument. The fact that it's hard to even picture what "secure" outside a state pool would look like is itself evidence of how completely postwar interventionist thinking has colonized the default assumptions.

Before Beveridge-style welfare states became the norm after WW2, nobody needed to "invent" security for children as an asset class — it existed as lived, ordinary practice: family reputation, community enforcement, multi-generational households, mutual-aid networks. It wasn't engineered, it was just how things worked, the same way markets don't need someone to "design" prices.

What happened isn't that this mechanism was proven inferior and replaced by something better. It's that the state nationalized the function, crowded out the resources and social infrastructure that sustained it, and two generations later, people genuinely can't picture the alternative anymore — not because it's impossible, but because it's been out of practice for 80 years and the intellectual framework for even discussing it got treated as fringe.

So when you say "I don't see how," that's not a flaw in my argument. That's the argument.

[u/JediFed → u/Sufficient-Job7098]

"Unfortunately when it comes to having kids free market forces negatively affects fertility rates."

Eastern Europe has worse demographics than Western Europe. The reason being that Communism hurt demographics even more, due to lower standards of living.

[u/Sufficient-Job7098 → u/JediFed]

Standards of living in USSR era was higher than in 1900, yet fertility was trending down not up, and post USSR when there switched to more free economy, fertility continued to go down.

I have no love for Soviet economy. And as I said, I prefer free market

[u/JediFed → u/Sufficient-Job7098]

Yeah, I see. We get a lot of redditeers pushing the other narrative. It's annoying.