Dear valued client,
Happy Canada Day!
Markets meandered up and down this week without any definite direction. Headlines centered on more political developments, especially the topic of abortion. More on that later.
G7 leaders met this week to reinforce their support for Ukraine in its struggle against Russia. Their continued alliance and economic pressure on Russia are paying dividends. Russia defaulted on its foreign-currency sovereign debt this month. As I mentioned 4 weeks ago, this is the first time Russia defaults on its bonds since the Bolshevik Revolution in 1918 (have you still not read Animal Farm!?). This commitment to not become complacent by Western democracies is an encouraging sign.
Most eyes were focused on the fact that the United States Supreme Court has overturned Roe v. Wade, the federal ruling that gave women the right to abortion. Now, those rights are dictated at the state level. I’d like to step away from the strictly political or moral argument and shed light on a different perspective of looking at the issue.
These insights come from Steven Levitt and Stephen Dubner’s book Freakonomics, more specifically their chapter called ‘Where Have All The Criminals Gone?’
Levitt and Dubner argue that legalized abortion had a significant effect on reducing crime rates.
They write, “Perhaps the most dramatic effect of legalized abortion, however, and one that would take many years to reveal itself, was its impact on crime. In the early 1990s, just as the first cohort of children born after Roe v. Wade was hitting its late teens – the years during which young men enter their criminal prime – the rate of crime began to fall. What this cohort was missing, of course, were the children who stood the greatest chance of becoming criminals.”
They continue to explain, “One study has shown that the typical child who went unborn in the earliest years of legalized abortion would have been 50 percent more likely than average to live in poverty; he would have also been 60 percent more likely to grow up with just one parent. These two factors – childhood poverty and a single-parent household – are among the strongest predictors that a child will have a criminal future.”
The authors go on to explain this link between legalized abortion and reduced crime rates is not only correlation, but causal as well.
“How, then, can we tell if the abortion-crime link is a case of causality rather than simply correlation? One way to test the effect of abortion on crime would be to measure crime data in the five states where abortion was made legal before the Supreme Court extended abortion rights to the rest of the country. In New York, California, Washington, Alaska, and Hawaii, a woman had been able to obtain a legal abortion for at least two years before Roe v. Wade. And indeed, those early-legalizing states saw crime begin to fall earlier than the other forty-five states and the District of Columbia. Between 1988 and 1994, violent crime in the early-legalizing states fell 13 percent compared to the other states; between 1994 and 1997, their murder rates fell 23 percent more than those of the other states.”
They go on with additional evidence to bolster their argument.
Regardless of your opinion on abortion, or any other contentious issue for that matter, it’s important to keep in mind the possibility (and often certainty) of unknown unknowns – the factors we didn’t even know existed having a blind impact on issues we feel like we wholly comprehend. The world is a complicated place. The only way we have a chance of navigating through it competently is through genuine and open-minded conversations.
Have a terrific weekend,
PW
“Thinking is difficult. That’s why most people judge.” – Carl Jung
