Why policymakers should grow the family

For those who can find time to read longer articles that
analyse the factors underlying continuing economic woes -- in particular those
of the United States -- there are some excellent essays on the Family in America website.

In the journal’s most recent issue (Winter 2011) for
example, editor Robert Patterson writes about “Why Policymakers
Should Grow the Family, Not Just GDP
”. While some economists and
governments have jumped onto the “growth is not everything” bandwagon and are
promoting quality of life measures, Patterson points out the primary place of
the family in the economy of any country.

Here is a taste:

The social sector comprises the realm of society, as John D. Mueller
explains in Redeeming Economics, where people relate to each other
without contracts or commercial transactions and where they satisfy their
profound need for emotional connections and personal relationships. Here,
people give gifts and transfer resources with little or no expectation of
The social sector includes, for example, all kinds of voluntary activities
that charitable and service organizations perform. For certain, the most
important work of the social sector takes place within the enduring bonds of
marriage and the family. The GDP thus tells us nothing about an enormous and
important sector of economy. While most economists treat the family as an
adjunct to the market, there would be no social capital, no private sector, and
no public sector without the family. There would be no economy without the
social sector.
In reality, the private and public sectors are adjuncts to
the social sector. Yet the activities of marrying as well as bearing children,
which Adam Smith considered among factors of lasting economic growth and true
wealth in capitalist societies like the United States,
are not counted in the GDP. In fact, many economists look at children, although
surely not their own children, as a special kind of consumer good. Likewise,
all the vital production of a full-time, at-home mother—caring for and rearing
children, food preparation, household management, volunteering, and even
homeschooling—does not count in the GDP because it does not involve a financial

What GDP does count is divorce:

Further skewing the books, every time an intact family
breaks up­—which represents a huge loss to parents and especially to
children—the GDP calculators, deeming that significant, suddenly turn on and
count all the derivative activities of divorce as positive indicators of
economic growth. Believe it or not, every divorce, because it generates
activity in the private and public sectors, boosts the GDP. That activity
includes greater workloads for divorce lawyers as well as the divorce-court and
child-support systems, heightened demand for second households, therapy for the
children, as well as new or increased employment commitments for the mother
outside the home. In fact, as a divorcing mother is often forced into the
full-time labor force, she may spend relatively more money on clothes,
commuting, daycare, and dining out. Even when eating at home, she may opt more
for costlier prepared foods than cooking at home. At the same time, the
divorced father will increase both energy and water consumption in setting up a
second household. He may eat even less at home and frequent bars more often.
The GDP rises in response to all these inputs, but the net effect is reduced
happiness, the handicapping of the next generation, and a less promising
economy down the road. So in the GDP universe, the destruction of a little
civilization through divorce—which splits a strong joint home economy into two
weaker ones—is considered good for the larger economy. But in this same
distorted GDP universe, the success of married couples in maintaining a lasting
union harms the economy at large.

He goes on to discuss the housing market in some detail and
concludes by stressing the need to “grow” human capital through investing in

Read more at The Family in America


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