The Borg Would Love National Child Care

by Karen Selick

Suppose you’re out for a stroll one evening. A scruffy-looking stranger approaches you and says, “Hand over all your valuables, and make it snappy.”

“Is this a stick-up?” you gasp, stupidly.

“Why, no,” says the stranger, “it’s merely the result of a cost-benefit analysis I just performed. I saw you come out of that nice-looking house over there, with the new car in the driveway. You’re pretty well dressed, and that’s a nice Rolex you’re wearing. By comparison, the rent’s overdue on my grungy apartment, my 12-year-old car needs its engine overhauled, my bank account’s overdrawn, and just look at these worn-out clothes I’m wearing. I estimate that the benefit to me of having your valuables outweighs the cost to you of losing them by at least two to one. So hand them over.”

If the robber’s logic wins any points with you, then I’ve got a new government program to sell you. It’s called national child care. Of course, it’s not really new, but with all the recent talk about the “fiscal dividend,” we can expect to see renewed hoopla over it in coming months.

An opening salvo was fired in March 1998 with the publication of a study entitled “The Benefits and Costs of Good Child Care” by the University of Toronto’s Centre for Urban & Community Studies. This study made national headlines because of its dazzling cost-benefit analysis. An expenditure of $5.3 billion on child care, it said, would generate benefits to children and parents of $10.6 billion—exactly double. Such a program should therefore be looked upon not as an expense, but rather as an “investment.”

Unfortunately, the authors of the study make the same argument as my fictitious robber. Some would argue that a cost-benefit analysis makes sense only when the costs are incurred and the benefits are received by the same person. According to this view, if costs are inflicted on one person while benefits are reaped by someone else, it is simply impossible to say whether the world has been made a better place. For the person receiving the benefits, things have improved. For the person bearing the costs, things have deteriorated. But there is no way to measure the absolute quantity of either person’s happiness. Individuals can rank their preferences (having more money usually ranks higher than having less), but they can’t quantify them. There are no units of satisfaction or contentment. Using dollars as proxy measuring sticks doesn’t help, because each additional dollar a person acquires adds less to his well-being than the previous dollars. You can’t measure something when the measuring stick itself continually alters in size.

If you can’t measure one person’s quantity of happiness, it’s even more obvious that you can’t compare quantities of happiness between different people.

This difficulty can only be circumvented if the benefits (to the users of this subsidized child care) are large enough to compensate taxpayers for their losses. It is not clear that such compensation is possible here. If note, it is as if we were the Borg of Star Trek fame, all controlled by a single communal brain, all willingly subordinating our individual personalities and goals to the will of the collective. We aren’t—at least, not yet. (One can’t help wondering, however, whether the push towards government control of the country’s children at ever younger ages reflects proponents’ desire to achieve a state of Borg-like submissiveness.)

The fact is, some people would be net beneficiaries of national child care— primarily families with young children in which both parents wish to work outside the home. Other people would be net payers—namely, childless taxpayers, families with older children, and families who prefer to have one parent provide care to pre-schoolers at home. The policy necessarily involves harming the second group in order to indulge the first.

The study contains a second fundamental flaw. In computing the cost side of the balance sheet, the authors fail to include any estimate of the advantages that would accrue if the same $5.3 billion were spent on something other than child care. Somewhere out there, toiling away in some laboratory, there is undoubtedly someone who could make a plausible case for “investing” $5.3 billion on his own pet project—perhaps a cold fusion machine. If he were successful in inventing such a device, the benefits to mankind would be incalculable —far more than the paltry $10.6 billion that child care would supposedly produce.

The point is, there are always competing uses for any resource. In deciding how to invest resources, you don’t look just at the potential returns from a single alternative. You compare the expected returns from many different alternatives.

We don’t know what alternative uses taxpayers would find for their money if we simply gave it back and let them invest it themselves, instead of spending it collectively. We can’t calculate the benefits their myriad individual projects would generate. We do know, however, that taxpayers would probably prefer this to all other alternatives. Otherwise, we wouldn’t have to force them to pay their taxes on pain of imprisonment.

There are another dozen good reasons for opposing national child care, but lack of space precludes me from discussing them here. However, if national child care is going to be as effectual as the public school system, let’s nip it in the bud.

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Last Modified: Wednesday, October 20, 1999.