I believe it was Alva Myrdal who once commented that the two great sociological interests of the last two centuries have been the nation-state and the individual.
Why? Because they were two new social realities that differentiate modernity from earlier periods. As a consequence, the family was seriously neglected in social analysis for several generations. Myrdal wrote Nation and Family to begin redressing that deficiency—and for its American edition (1968), Daniel Patrick Moynihan wrote the introduction, in the hope that American scholars might regain knowledge of the important role of the family between the nation and the individual.
In fact, in To Empower People, an important little book published almost a decade later (1977), Peter L. Berger and Richard John Neuhaus launched an entire intellectual movement around the idea of “mediating structures,” including the family, intending by that name those crucial social institutions that stand between the vulnerable individual, and the huge, almost omnipotent (although less than fully competent) nation-state. Their implicit challenge to America’s political parties was that the social treasures on which the future would be founded lay in this neglected territory of mediating institutions. The party that would get there first would dominate the future, as the New Deal had dominated the past half-century. The expectation of many—including myself—was that the Democrats would do so. In the event, by about 1992 the Democrats seemed to have chosen to become conservative, to protect their gains during the New Deal. Meanwhile, conservatives (or at least the neoconservatives) seemed to have become the social radicals, trying to imagine new and better ways to help the poor, by way of helping families.
Between the 1930s and the 1970s, faced with an undeniable social crisis, the Republican response—roughly speaking—was to seek a solution by turning to the individual. Republicans liked the image of “the rugged individual”: the Marlboro man. Ronald Reagan in a checked woolen shirt splitting wood or riding horseback. By contrast, faced with the same social problem, Democrats sought the solution by proposing a new government program. Democrats loved the image of the fighting district attorney, coat jacket over his shoulder, striding up the steps of City Hall. Mayors who “give a damn.” Their motto seemed to be: The city, the state, the nation is here to help you.
In looser images still, the Republicans long had the reputation of being strict and stingy daddies while the Democrats were caring, almost feminine. The rugged individual over and against the caring state. It was easier to picture the Democrats as moral and compassionate. The sense that morality is strict and self-denying was no longer considered attractive—not to the news media, nor to the businesses that wooed consumers to spend more freely. The age of mommy triumphed over the bygone days of daddy. Compassion beat fiscal rectitude almost every time. Thus the quip arose among the cynical Joseph Pucketts in our midst: “Th’ fella that said ‘Patriotism is the last refuge of scoundrels’ overlooked th’ possibilities o’ compassion.”
The Family Returns
The curious feature of that prolonged turn in American politics, the victorious turn toward compassion and its chief vehicle, the nation-state, is that it neglected the original institution that formed the first human experiences of compassion (and even of intimate love and trust): the family. Nonetheless, in sepia memory, the family continued to provide the cherished image of a mother lovingly holding her infant to her breast, while reading aloud to another in her lap. The power of this residual image arose from the fact that the first and formative human experience for most individuals is the unconditional love in a mother’s eyes during the whole first year after birth. That is where we first experience trust, love, and safety.
Against the relatively colder, bureaucratic world of the welfare state, that earlier appeal of the family, after decades of neglect, was bound to come roaring back. As Myrdal, Moynihan, Berger, Neuhaus, and growing legions of scholars were beginning to point out, the institution of the family had better return, or the fabric of civil society would not hold. National societies are necessarily built upon habits of social trust, personal responsibility, hard work, compassion, and social cooperation. When the family does its proper work, such habits of self-policing, self-governing young citizens, and others more economically directed, are found in abundance. Such persons don’t really need much from a Department of Health, Education, and Welfare (as it then was called). But when the family fails, and is not training up such young people by the millions, not all the government’s legions can put the necessary habits back together again. The upshot is this: A citizenry that cannot govern its personal behavior in its private life can hardly be expected to be successful in self-government in its public life (as James
Madison warned generations ago). And the family is the first, original, and only truly successful teacher of self- government during a child’s tender years.
To put it plainly, a people that cannot govern its private life is a people in need of an expansive police force—a state in which people must act in self-defense and must refuse to trust others until their behavior warrants trust. Such a place is less a free society and more a gated one.
The High Cost of Neglect
As White House Counselor on Domestic Policy, Moynihan sent a memo to the president in 1965 on the role of the family in welfare policy, with particular reference to the black family. His point was that the number and the percentage of black babies born out of wedlock had risen rapidly and was still rising, and that this circumstance correlated with continued poverty and other social drawbacks, relative to children in two-parent families. This memo set off a storm in the press, and at least one black leader—the distinguished Kenneth Clark—who had earlier made the same point in public, when arguing for greater assistance to blacks, now denounced Moynihan for saying the same thing. The abuse heaped on Moynihan for saying in public, and at the White House, what other social scientists well knew, chilled discussion—not only of the black family, but of the family, period—for at least another decade. Those of us old enough to remember retain powerful memories of that enforced neglect. (That episode may well have marked the beginning of “political correctness.”)
Meanwhile, the great welfare reform that John F Kennedy had launched in 1962 with much fanfare—claiming that public policy “must contribute to the attack on dependence, family breakdown, illegitimacy” had effects exactly the opposite of what he hoped. Twenty years later, the statistical reports on the state of the American family looked something like this:
- In 1985, 34 percent of all female-headed families were below the poverty line, and this group constituted the fastest-growing segment of the poor.
- In 1985, only half of black, female-headed families were above the poverty line.
- Among the 7 million children on Aid to Families with Dependent Children in 1983, 46 percent had been born out of wedlock.
- The unemployment rate of young black males ages 20 to 24 more than doubled between 1965 and 1985, rising from just over 9 percent to 23 percent.
Setting moral judgments aside, the growing rate of single female—headed families had extremely negative social costs, as Moynihan had predicted. For instance, children born out of wedlock were more likely to be born with low birth weight, face other serious health disabilities, drop out of school, become involved in crime, and in their turn also have children out of wedlock. There was in such patterns the formation of an unfortunately named “underclass,” in the sense that for the first time in history a sizable group of Americans—largely situated in the center of dynamic cities—seemed mired in poverty and social dysfunction. And the subject of almost unprecedented proportions of children out of wedlock—or more accurately, of the widespread abandonment of women with young children by the fathers—could hardly be talked about without invoking social retribution.
By 1983, however, there were more out-of-wedlock births in white families than in black families (371,000 illegitimate white births to 341,000 illegitimate black births). Slowly the stigma began to lift. The subject could now be more freely discussed in public, without reflecting invidiously on the black population.
The Seminar on Family and Welfare (1986), composed of a bipartisan group of scholars with eminence in their fields, reached three powerful conclusions, and made almost 60 practical recommendations designed to alter costly trend lines. The three most significant conclusions, powerfully supported by the statistical data, were expressed in this form: A couple has a 93 percent chance of escaping from poverty if it does these three things: (1) gets married and—even if not on the first try—stays married; (2) completes high school; and (3) maintains at least one partner working full time for at least 50 weeks a year, even at minimum wage.
The seminar was clearly onto something. In 1964, when the “war on poverty” began, the number of the poor living alone as individuals was 5 million, while the number of the poor living in families was almost 31 million. In other words, to tackle poverty it would seem far more effective to help a family move out of poverty—thus moving two, three, or more persons at once—than to aim solely at the individual.
Part of the creative originality of The New Consensus on, Family and Welfare was to propose positive solutions by pointing to factors that might have a strong influence on altering the more costly downward trends and pointing them in an upward trajectory. Leaders in both houses of Congress, as well as the White House, expressed their surprise and their agreement with many of the proposals, particularly those on attacking poverty by addressing family breakdown. They showed a willingness to face the role of welfare programs in perpetuating much of what President Kennedy had intended to diminish.
Less than a decade later, under President Bill Clinton, the new Welfare Reform Act of 1995 put into place a number of the key reforms suggested by the same Seminar on Family and Welfare. Interestingly, nearly a decade later, the trend lines on a number of the key indices mentioned above had been altered for the better, at least modestly. For example, by 2004 the total number of families on welfare had dropped by nearly half (from almost 4 million in 1997 to 2 million in 2004). Also, the role of absent fathers—that is, of children being born and raised out of wedlock—in the incidence of poverty became even more starkly clear in the fact that fewer than 2 percent of the 2 million families (33,800) whose poverty qualified them for welfare were two-parent families. Moreover, other social indicators such as teenage births, out-of-wedlock births, abortions, drug use, crime, and several others had also turned in more positive directions.
Naturally, looking at poverty through the lens of statistical reports leaves unaddressed some of the internal dimensions of family life, as compared with life as an individual. In addressing the question of the family in relation to the national economy, and in particular in relation to small business companies, it is precisely to these more “internal” dimensions that we must now turn. To grasp the full national costs—both human and financial—of the neglect of the family, it was necessary to study national statistics. But to grasp the positive strengths that healthy families provide to the national economy, and that family firms add to individual families, it is necessary to employ other methods of analysis as well.
How the Family Increases Social Capital
Many years ago my wife and I went out for a quick dinner to a new pizza parlor that had opened near our home on Long Island. While eating, I chanced to ask the new proprietor—who was barely in his 20s—how he had the nerve to open a new place when there were already at least four competitive establishments along that same street. “Not to worry,” he told me. He was already putting out bids for expanding at the present location.
“But how did you know what to do to open a new business? I wouldn’t have the faintest idea where to begin.”
“Easy,” he said. “I been workin’ in my father’s restaurant ever since I was seven, and by eleven I knew how to take inventory myself, and to order practically everything in the place, including new equipment for the kitchen—the whole works. My idea is to own ten or eleven of these, by the time I’m 37 or so, and then retire. Probably to Florida,” he grinned.
This was my first real grasp of the concrete dimensions of human capital. Through his family, this kid had more knowledge about the restaurant business in his little finger than I ever dreamed of. This was his turf. His metier. His inheritance. He had the knowledge in his head and hands— living experience. For him, opening a new restaurant was like breathing. Given what he knew, success was a matter of a little luck, but also of just waiting for the right time to make the moves that were already roughed out in his mind. No doubt, life would knock him around a bit. But still, he was quite advantaged.
It is one thing to meet “human capital” as a subject in books. It is another to find so much of it embodied in a single person, particularly one so young. In fact, one of the aspects I have most admired in Gary Becker’s reflections in Human Capital is the rich concrete texture to which he skillfully points. Becker shows how even the habit of going to a concert with the family gives the young a form of social capital that provides them much satisfaction later in life, and how lack of learning such appreciation early can be cause for later regret.
One thing an intact family in the home teaches is how to trust others, and how to generate trust. It also teaches some remarkable degree of love, patience, overcoming anger and hurt at each other’s faults, forgiveness, plodding through rough spots, coping with human faults and glaring weaknesses, and other lessons in human wisdom that can overcome much adversity. Rare is the family that does not deal with serious illness, incapacity, tragic accidents, huge human failings, disease, and other sufferings the flesh is heir to. And so one also learns a lot about endurance. The superficially smiling “happy” family of commercialdom may be a falsehood. But the family that learns happiness through suffering together is fairly common.
In Democracy in America, Tocqueville remarks on how the fidelity of husbands and wives in America breeds a degree of social trust on which the republican polity can begin to thrive. At least one sociologist has pointed out the damage that polygamy does to Arab societies—where it is still practiced—through the multiple rivalries to which it gives rise at many different levels of the social structure. Adam Smith, as Sam Gregg has pointed out, well understood that the butcher endures the blood upon his hands, and the baker the heat of his ovens, not solely from a self-interest narrowly construed, but because of their duties to their families. It is well-known in empirical literature that being married and having a family ordinarily makes a man a better and more productive economic agent than when he was single. In the so-called monogamous bourgeois family structure, family ties become a powerful social motivator—ties not just of duty, but also of love and dreams about the future. Whatever may be true for other states and forms of life, it is not true for the married monogamous family with children that “in the long run, we are all dead.” To the contrary, such families live for the long run, plan for it, work toward it. The family is a very powerful engine of economic development.
When I was younger, I noted often that in the larger extended family, even among the working class, useful economic skills of varying sorts could be drawn upon by everyone else—one uncle fixed roofs, one was in the auto business, another was a lawyer, two or three relatives were teachers, someone else was a carpenter or electrician, and so forth. The skills of all could be drawn upon by others in urgent need, either of actual help or at least of moneysaving advice and counsel. I used to think of this as a kind of family socialism—the skills of one meeting the needs of others, apart from purely commercial transactions. Incidentally, this fact meant that certain kinds of political knowledge were also widely dispersed, and that political arguments would be informed—often heatedly so—by family members in widely differing economic circumstances. People who held the opposite views were often within one’s own family, not just “others” outside the family.
Such informal kinds of knowledge, picked up simply by living and being aware, are not the only kind of capital learned in the family. Harder financial realities are also affected. It was not so obvious to me when I was younger as it came to be in later years, but the ownership of a business within a family can be a significant source of wealth quite apart from one’s income stream. The capital represented by the firm may in itself be a powerful long-run resource.
Another experience made this clearer to me than ever before. Taking a taxi from LaGuardia Airport to Yale University one day, I got to talking with the driver, a man of many years, who eventually told me that he had come to New Haven as an immigrant and ended up buying a car to drive people, for a fee, between New Haven and the New York airports. Soon he bought another car, then another, and eventually owned a fleet of more than 55 taxis, limos, and sedans. He had just sold the business for some several million dollars, he told me. The substantial capital this son of immigrants had amassed, not just his income stream, was impressive—yet he was still driving his cab. Alas, his son was not interested in taking over the business.
The skills involved in running the firm and managing it may (or may not) come to be passed on to sons and daughters. But habits of home ownership, higher education, and the advantages of special social experiences are likely to flow from the firm’s accumulated resources. As seemed to have happened in this case, the children may then choose to go off in a different direction. In later generations, new habits of moral bearing, judgment, leadership, and emotional style may in some cases be learned. In older families, these may simply be passed on by the special cultivation that is added to good birth. Skills in investing and managing one’s resources may be taught at a relatively early age. Manners may also be fairly carefully coached. Such advantages can be, and often are, surpassed by other youths, less advantaged by birth and upbringing, but hungrier and more attentive to hard realities. But they are advantages. These advantages may be developed, or squandered, as the case may be.
The sound habits youths learn become themselves a form of social capital on which family firms draw in later generations. These may be moral and intellectual habits, but also some of the special economic skills and the graces in human relations on which any firm depends. But the nourishing longevity of the firm also brings special learning to the children born into it. The exchange of economic values flows both ways.
If Demography Is Destiny …
It has recently become apparent that the project of modernity—in allowing the family to suffer a dramatic eclipse— has taken a fatal turn toward self-extinction. That fate seems fairly sure in the most reliable prognoses for Europe over the next 50 years. Deeply cutting trends in demography take more than one generation to turn around. And it now seems clear that in Europe human reproduction has fallen to such a low level in the last three generations that its population is now upon a sharp decline. Set aside the generation that suffered the immense losses of something like 100 million lives during the war years. The following generations—excepting a brief baby boom just after that war—have not been having enough children even to replace themselves, despite being the wealthiest and freest generation in European history. Europe’s population, therefore, is on a steep decline. A generation from now, some nations will be almost one-third less populous than at present. Such declining birth rates are fatal to the welfare state—doubly so in a time when the elderly live far longer—and the medical care they require is far more sophisticated and expensive. The only major group in Europe still producing at birth rates guaranteeing future growth is the already substantial Muslim minority, especially in France, Germany, and the Lowlands.
In the United States, although the figures are somewhat less dire, the general pattern is not entirely dissimilar . . except for one thing. The American population is notoriously more religious than the deeply secularized Europeans. In the United States, people of faith are continuing to have children, and above the replacement rate. In a recent article (Foreign Policy, March/April 2006), Phillip Longman revealed that, among baby-boomer women who have had children, more than 25 percent of all babies are born to that 11 percent of women who have had four or more children. By contrast, other groups of adult Americans are not having children at replacement levels. The 17.4 percent of baby boomers who have had only one child account for only 7.8 percent of the children who are filling out the next generation. Secular Americans, feminists, and gays are among those having the least number of children. This stands to reason, since these groups have most clearly separated human sexual activity from generativity, even in theory. Sharpening the partisan point of the data, “Among states that voted for President George W. Bush in 2004, fertility rates are 12 percent higher than in states that voted for Sen. John Kerry.” The 43 million Americans aborted since 1973 also appear to have contributed substantially to the notable demographic shift from left to right in the American polity.
Thus, on this front, too, we see the importance of the family to our common life, not only in economic vitality but also in political direction. Furthermore, the future of the welfare state depends mightily on the newer generations outnumbering their predecessors. If the number of the young should shrink through declining birthrates, while the number of the elderly should increase through greater longevity—and should their medical care become ever more expensive—social disaster lurks around the corner.
A New Approach?
For my own part, I advocate a new approach that I call universal family capital. It consists of accumulating capital packages for every single family in the nation (and eventually universally). Whereas the 20th century pivoted on the dream of redistributing income through the agency of the state—a project which in the end failed—the 21st century ought to turn in a new direction. It ought to aim at shaping
a regime of universal family capital. Suppose, for instance, that the government were to legislate that every income earner must set aside 9 percent of all income (or some such low practical number) into two funds, one for old-age assistance and one for medical expenses. Each such fund would be vested in the name of the individual contributor, and wholly owned by him or her.
Under this new regimen, the vast bulk of social insurance would be privately owned and privately invested. However, there are no doubt some persons who would prefer that the government manage their funds in something like the present system, and there are some who are alone and unable to earn income. For both groups, some portion of social insurance might still be managed by—or even owned by—the federal government. All told, though, the huge bureaucracy of Social Security and Medicare could be much smaller than it now is, at great social savings.
Similarly, individual persons would own their own pension and medical insurance funds, and invest them either in the market or in government-guaranteed savings vehicles (or in some combination of the two). The government might even designate ten or twelve funds as particularly safe investments. The main point is that these capital funds would now remain in the family, as capital funds that could be handed on by inheritance from one generation to the next. The family would accrue new responsibilities and inherit new possibilities.
If it is correct that a major reason for the weakening of the family in recent generations is the expropriation of many of its key functions by the state, then a regime of universal family capital would be a major step in the direction of the reappropriation by the family of its own proper powers and responsibilities. In a parallel fashion, home ownership ought also to be protected, encouraged, and even facilitated—much as Lincoln’s Homestead Act and the Morrill Land-Grant Colleges Act were wise uses of government to empower citizens for their own development.
The role of a strong, wise, and inventive government is a very important one. Nevertheless, a still more central and dynamic role in the free society—both in its economy and in its politics of self-government—is played by the family. If the family unit is allowed to fade into eclipse, it may well prove fatal to our civilization.