Tilman Tacke and I are quite cautious in this paper which does not support my pet theory described in this paper. The stylized fact (which has returned after a brief absence from the data) is that, given the income of poorer quintiles, where the rich are richer more babies die. My pet theory is that this is due to “distortion of consumption” where the poor imitate the consumption of the rich (which is more costly the richer the rich are) and this foolish spending causes infant mortality.
It turns out that this bold idea wasn’t totally new after all. I just found it in
The Wealth of Nations by Adam Smith first published in 1776.
I explain after the jump.
The idea appears really really appears on page 1103 (Book 5 Chapter 2 article 4 section 2 “taxes on consumable commodities”) of my copy of The Wealth of Nations by Adam Smith published in 1776.
“Consumable commodities are either luxuries or necessaries,
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day lobourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, no body can well fall into without extreme bad conduct.”
He argues that, therefore taxes on necessaries will drive up wages in the long run.
To understand you have to know Smith’s theory of wages which is that the steady state wage is such that population neither grows nor shrinks and at a lower wage population will shrink due to increased mortality due to poverty. So his claim is that taxing necessaries, including linen shirts in Europe in 1776, would cause the population to decline due to increased mortality. This only makes sense if he believes that, in order to wear a linen shirt, Europeans of his day would skimp on food to an extent which increased the mortality of their children.
This is made very clear when, in contrast, Smith argues that a tax on luxuries consumed by the poor will not affect wages in the long run
“The different taxes which have in the course of the present century been imposed on spirituous liquors, are not supposed to have had any effect on the wages of labour. …
The high price of such commodities does not necessarily diminish the ability of the inferior ranks of people to bring up families.”
That is a high price of linen shirts will necessarily diminish the ability of the inferior ranks of people to bring up families … by causing their children to die.
Smith definitely did not consider any form of contraception including abstinence. He is quite clear on the idea that steady state wages are determined by infant and child mortality in book 1 chapter 8.
To get to causation rich are richer so more babies die one just needs to add that average standards of living affect what goods “the custom of the country renders it indecent for creditable people, to be without.”
So I guess I wasn’t the first to come up with the idea. However, I was only 216 years late.
The most flaky far out interpretation of the stylized fact (destroyed by including pubhealth anyway) is clearly stated in The Wealth of Nations. Wow.