Long-term prosperity depends on family values

They may not be that common in the real world, but in political circles there’s a lot of people who declare themselves to be both economically and socially liberal – usually with a slight edge of self-congratulation to their words.

Liberalism isn’t the only thing these concepts have in common, there’s also a causal link between the two: The practical application of economic liberalism is what makes social liberalism viable. A free economy creates wealth, opportunity and mobility – and those in turn enable people to choose from a range of different lifestyles.

As Joel Kotkin explains at NewGeography.com this choice is transforming social structures:

• “For most of human history, the family — defined by parents, children and extended kin — has stood as the central unit of society. In Europe, Asia, Africa and, later, the Americas and Oceania, people lived, and frequently worked, as family units.
• Today, in the high-income world and even in some developing countries, we are witnessing a shift to a new social model. Increasingly, family no longer serves as the central organizing feature of society. An unprecedented number of individuals — approaching upwards of 30% in some Asian countries — are choosing to eschew child bearing altogether and, often, marriage as well.”

Kotkin calls this phenomenon “post-familialism”, which though made possible by economic change, is also cultural in nature:

• “The widespread movement away from traditional values — Hindu, Muslim, Judeo-Christian, Buddhist or Confucian — has also undermined familialism. Traditional values have almost without exception been rooted in kinship relations. The new emerging social ethos endorses more secular values that prioritise individual personal socioeconomic success as well as the personal quest for greater fulfilment.”

Social liberals, whether economically liberal or illiberal, celebrate this cultural shift as a triumph of individual expression and personal autonomy. But what they overlook is that post-familial societies are doomed:

• “The most obvious impact from post-familialism lies with demographic decline. It is already having a profound impact on fiscal stability in, for example, Japan and across southern Europe. With fewer workers contributing to cover pension costs, even successful places like Singapore will face this same crisis in the coming decade.”

Do the maths: If each woman has an average of 1.4 children (as is already the case in several countries) then that means that the number of babies born – and thus, in due course, the non-immigrant workforce – halves every two generations.

But we don’t have to wait that long for post-familialism to wreck the economy:

• “A society that is increasingly single and childless is likely to be more concerned with serving current needs than addressing the future oriented requirements of children… We could tilt more into a ‘now’ society, geared towards consuming or recreating today, as opposed to nurturing and sacrificing for tomorrow.”

Arguably this is already happening, as demonstrated the unprecedented peacetime build-up of private and public sector debt. Kotkin also notes that “younger people tend to drive technological change, and their absence from the workforce will slow innovation.”

And there you have it: Record levels of debt, but fewer people and less growth to pay for it. So while prosperity promotes personal freedom, the reverse does not necessarily apply.