Pascal-Emmanuel Gobry on why addressing inequality with family policy is the biggest problem for the American Right and the best Cameroon idea that Cameron dropped
The central challenge of political economy in the rich world since the Industrial Revolution has been to make free-market capitalism politically sustainable.
Free markets create wealth and prosperity. But they also create churn and disruption, big winners yet also big losers, and thus undermine their own political sustainability, as populations see their way of life disrupted and rebel against the whole idea.
The best way we’ve found so far to thread the needle has been the welfare state. But the welfare state has a few problems. The first and obvious one is that by increasing levels of government spending, and consequent taxation and centralised control of our activities, it threatens to kill the goose that lays the golden eggs. This is what happened to Britain in the 1970s, and it took all the energy of Margaret Thatcher’s government to reverse the trend. But there is a second problem, more subtle, less recognised, but perhaps more important over the long term. This problem is that, by performing various social welfare functions, the welfare state inevitably comes into competition with other social institutions for our allegiance. The welfare state comes to replace institutions such as churches, community groups, and even the family as a body from which we draw sustenance and meaning. Think of all the ways that extended kinship ties served as a safety net for individuals, in a way that is no longer true for most people in modern countries. Regardless of whether this development is, on balance, good or not, it is certainly underappreciated.
Within this context – sketched with necessarily broad strokes – it is easy to understand why the vision of a “Big Society” that the Conservative Party promoted with its 2010 election platform has been so appealing to those of us who seek a response to the welfare state that is not just about cutting.
It shows an understanding that, while some sort of safety net is indeed necessary, the problem of the welfare state isn’t just that it’s expensive but also that, along with capitalism, it undermines the other social institutions that hold up society – and that by strengthening these institutions, we can find a healthier balance between statism and totalising capitalism.
As David Frum notes in interview in this magazine, the chief way that free markets make themselves politically unsustainable is by creating inequality. People have strongly held notions of fairness, and they cannot long abide a society where the rich “pull away” from the rest and start to look like a plutocratic class of their own.
The United States has been Ground Zero for this phenomenon, which for the past decades has affected all wealthy nations, and there is a growing consensus among the smartest thinkers on the American Right that the most underrated factor causing this increase in inequality has been the collapse of the traditional two-parent family. Now almost half of first births in the US occur outside of wedlock, with these numbers much higher in the working class. And for all the cries that marriage ‘is just a piece of paper’, parents in America who are married are much more likely to stay together. If you doubt it, go read Rachel M. Shattuck and Rose M. Kreider’s comprehensive study of unwed mothers, at the US Census Bureau.
It seems hard to overstate what damage has been wrought on the family in American society, particularly in the non-college-educated segments of society, and in turn the damage that this fraying has caused on society at large. The evidence is overwhelming that children who do not grow up in two-parent families face much longer odds in life, and that people who find a way to get married and stay married have much better chances of building a good life.
The family is indeed the incubator of society – where, to use unromantic economic terms, we acquire the human and social capital which actually matters more to our collective well-being than learning multiplication tables or computer programming.
This insight that the breakdown of the family is the most damaging trend to equality is a hard sell in the American political sphere. The Left refuses to criticise any lifestyle choice, even when the least among us bear the brunt. And the Right refuses to acknowledge that inequality can ever be a problem, even when it threatens to destroy the things we want to protect.
The American Right has talked a good game about “the family” for the past few decades, but only recently have the smartest voices – writers such as Ross Douthat, Reihan Salam and Ramesh Ponnuru – recognised that the breakdown of the family is an economic and not just a moral problem, requiring therefore an economic response. In the pre-modern world, the
incentives to get married and have a family were obvious, not only because pre-marital sex was widely discouraged, but moreover because the family was the main social safety net that existed. We don’t want to go back to those times. But we need to recognise people didn’t get married more because they were more virtuous, or more religious, or more in love, but because they had more incentive.
France’s tax sliding scale which gives you a deduction for getting married and further deductions for having children; in the US Ramesh Ponnuru has proposed expanding the child tax credit. The economic policy of the future therefore, is the one that recognises the key importance of the family to economic life, to social mobility, to well-being and to human welfare. One that recognises that it is our most ancient and most useful bulwark against the overexpansion of both the market and the state. One, therefore, that recognises that sound economic policy starts with rewarding citizens for starting families, keeping them together and raising children.
