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My involvement in the childcare issue has made me interested also in what goes on in that field in the world around me (outside Sweden), including what is being said out there about my country and its parental leave and day-care arrangements. That is, whether our solutions are held up as good or bad examples. As you dear reader may suspect, I find, to my dismay, that the momentum towards out-of-home child care out there is strong and that Sweden's solutions are referred to as models.

The arguments in favour are all too familiar to us Northerners, pioneers in industrial-scale childcare as we are: better cognitive and social child development, and mothers freed to work for money away from home on par with their men. But why are the disadvantages played down to the extent they are: strong emotional separation anxiety the first few months, weaker child-parent bonding, a faster-paced rat-race, greater risk of delinquency - even social problems or criminality in later years as a result of that poorer bonding, etc., etc.?

I think it has to do with day-care advocates seeing taxfunded parental leave and collective child care as generously provided options which parents can either utilize or turn down at their discretion, i.e. as options lacking drawbacks. They don’t seem to realize that undue economic/political reward/punishment and shrinking financial resources will practically force parents to utilize the services offered, whether they like them or not.

Why government-offered leave and day-care services create economic coercion should be self-evident but why they also reduce affluence may not be as obvious. It has to do with those services costing more than they are worth and that the opposite relationship is a prerequisite for them to contribute to overall prosperity and greater personal freedom. (Let's face it: some measure of financial resources is necessary for the concept of personal freedom to gain meaning.) That both services cost more than they are worth can be seen by imagining that they were offered via the market at cost prices. For instance, full-time day care in my country costs, on average, US$2,000 a child, a month, to produce. How many would buy at that price? Not many. (1)

So, to sweeten the bid, governments cover a larger or lesser portion of that cost with tax subsidies to make them look more attractive than they are. But since that trick doesn’t solve the basic problem (of cost exceeding value), it results not only in large-scale self-delusion but also in increased losses since more people will now undoubtedly buy. I have said it before and say it again: No person, company or nation has ever got rich by spending her/its resources on products whose values to patrons do not measure up - and never will!

One can but wonder why so many out there so firmly believe that government-sponsored parental leave and child care are exceptions to laws of economics affecting every other commodity and why world economists are keeping as quiet as they do about this popular misperception? (2)

If governments allowed families to keep the money they need to subsist before taxing them, public expenditure burdens would fall and finance ministers end up with much more money on hand for helping those who really need it. For good measure, overall prosperity and personal freedom would also improve. But the trouble is that "my" solution takes years, from change implementation to measurable effect, whilst an offer of “free” childcare buys votes tomorrow.

Footnotes:
1. This built-in check (that value exceeds cost) is the main
reason why the market inevitably beats central planning at
delivering prosperity. In Adam Smith's (1723-1790) words:
"As if guided by an invisible hand…" it will 'auto-gravitate'
towards maximum efficiency and prosperity.
2. Some economists defend government-provided parental
leave and child care on the grounds that parents don't
know what is best, neither for themselves nor for their children
and hence must be overridden on these issues by those
who know better. But isn't that tantamount to advocating
that representative democracy be overturned in favour of
totalitarianism and expertocracy?

Bo C. Pettersson is Director
of Barnensratt, The Swedish
Association of Children’s
Right to their Parents