It probably not wise for someone whose expertise is valuation and investing to venture into to political economics. But what I call the “human investment decision” is so important I could not resist. In this blog, I have focused on investing in securities, but the most important investment people make is in the own offspring. Therefore, I ask you to consider what follows.
Human Investment Decision
Humanity faces a number of fundamental socio-economic problems: widespread poverty, climate change and the related ability to provide key resources such as sufficient energy and clean water to all people, terrorism and political unrest, massive migration, and unsustainable population growth in poor parts of the world. While each of these problems can be attacked individually with palliative measures, the argument here is that their ultimate solution requires addressing one key issue – the human investment decision. By that I mean the decision whether or not to have a child and if the decision is made to create a human being how much to invest in the child. This investment decision becomes increasingly critical as technology advances because producing a human being that can become a successful participant in an increasing complex world requires ever more investment. While society can help support that investment through vehicles such as public education, there is no substitute for the nearly the two-decade parental effort required to produce a successful human being who can take advantage of the opportunities offered by a technological society.
With regard to the human investment decision there are two critical facts. First, the decision is made largely by women. Second, when women have sufficient education, social opportunities, control over their reproductive decisions, and legal protections from exploitation by men, they make the right decisions. Scandinavia is an example. Women are highly educated, legally protected and afforded all the opportunities that men have. The result is societies that face none of the problems listed above. When women are poorly educated, have few social opportunities, and when their reproductive decisions are beyond their control, or worse dominated by men, the result generally is the production of children in which scant investment is made. Consequently, those children are unable to participate (with the exception of a few highly publicized cases) as fully productive members of a technological society. Instead they end up perpetuating poverty and participating in bad human investment decisions. For boys in particular, there is a tendency to drift into gangs, crime and violent religious and political zealotry. This, in turn, affects their attitude toward and their treatment of women – perpetuating the production of children in which there will be inadequate investment.
There is a demographic aspect of the human investment decision as well. In societies where women have the full panoply of opportunities available to them, they choose, on average, to have fewer children, with carefully chosen partners, and to make sure that there is sufficient investment in the limited number of offspring. The result is stabilization of population at a high level of income. Conversely, when women are unable control of their reproductive decisions, either because of ignorance, domination by men and male sexual whims, or religious and social impediments, the result is more children with little investment in each. As a result, population growth is fastest in those parts of the world where the aforementioned problems are the most severe. It is not surprising, therefore, that the more energetic people born into those parts of the world, and with knowledge via social media of what is available elsewhere, want to move to places like Scandinavia not afflicted with the problems. However, attempting to migrate much of the Middle East or Africa to Denmark is clearly not an equilibrium outcome. The only viable solution is to make Damascus and Lagos more like Copenhagen. And there is only one path to that solution – massive investment in the opportunities for women worldwide. To be clear this is not a “feminist issue” though feminists may support some of what I say. Sufficient education of and opportunities for women is the critical issue for adapting our societies and our planet to the massive changes brought by technology. As such, it goes far beyond “equal rights for women.” Adaption requires unprecedented attention to human investment decision. That decision can only be made by educated women to whom all the options of an advanced society are available and who have complete discretion over their reproductive decisions.