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Toward Pro-Family Regulation of the Market

What’s an Economy For?

If we take the state’s responsibility to support families seriously, we’d regulate markets very differently. To begin with, we would recognize that an important goal of the economy in a liberal democracy must be to get families what they need to thrive. This goal stems directly from the way that the recognition of dependency transforms the liberal project: the support for human dignity that Thomas Paine long ago recognized grounded the liberal project must be reconceptualized to include ensuring that citizens receive the caretaking and human development they need (Paine 1973). And that, barring some fundamental reorganization of society, requires ensuring that citizens have the resources they need to form sound, stable family relationships and that families have the circumstances and resources they need to support their members well.

Ensuring that the economy supports families requires recognition that markets are simply one piece of the larger economy. This represents a stark departure from how most U.S. economists and policymakers see markets today. They have come to believe that markets are the economy. Furthermore, they unquestioningly believe that the goal of economic policy should be to increase wealth, often thought of solely in terms of increasing the nation’s gross domestic product (GDP). The economist Kate Raworth likens the way that GDP growth has taken over as the economic goal to the egg of a cuckoo bird that has been laid in the nest of another variety of bird. Just as these unsuspecting feathered foster parents nurture the young cuckoo in their nest in the belief that it is their own, Raworth argues, policymakers have mistakenly come to see increased GDP growth as the be-all, end-all of economic success

(Raworth 2017, 27-31). Their focusing solely on growth has eclipsed everything from the economic picture except markets.

In fact, seeing the economy solely in terms of markets and seeing the goal of the economy in terms of increased GDP are both relatively recent phenomena, both of which have little to recommend them. The GDP was first developed as a measure only in the 1930s - well after the rise of markets. Simon Kuznets, who fashioned the measure, himself warned that it provided a poor index of the country’s well-being, which he saw as the proper goal of an economy. “The welfare of a nation can ... scarcely be inferred from a measurement of national income,” he wrote in a 1934 report (Kuznets 1934).

As most political theory students learn, the term “economy” was not fashioned as a synonym for “markets.” Instead, the term comes from the Greek word “oikos,” which the Greeks used to refer to the extended family unit that included family, servants, farmland, and all property. The term “economy,” which became associated with the system of agriculture and resources that supported people, was originally associated with the household because, in ancient Greece, most households received their resources through the “household economy,” rather than through the “market economy” we rely on today. Properly understood, then, the economy is the system for distributing resources to people. Markets are a central component of that system in wealthy countries today, but they shouldn’t be seen as its sum total.

In fact, most U.S. families met their economic needs through the household economy until well into the nineteenth century. Before then, except in the nation’s seaboard towns, the great majority of American families lived on landlocked farmsteads. Given that our system of roads and highways wasn’t built until later, these Americans had little access to trade, and little contact with the cash economy or the distribution web that we today call “the market.” Unlike present-day farms, as economic historian Charles Sellers has observed, most early American farms weren’t geared to selling crops or livestock to others. Instead, they simply met the needs of those living on the farmstead. Almost all the material goods that these citizens lived on came from their farms, sometimes supplemented by goods bartered with their neighbors. The goal of producing resources in the household economy wasn’t to accumulate as much as possible, as it often is in the market economy. Any surplus couldn’t be sold easily and wouldn’t keep that long, anyway. Instead the goal was subsistence, meaning freedom from want. The goods produced on the farmstead sheltered, clothed, and filled the bellies of the household. After these needs were met, the purpose of work had been accomplished (at least when it came to men. For women, tasked with reproduction and domestic tasks, work was often ceaseless). Families’ long-term goals were not to amass wealth for retirement or for the next generation, as it is for many of us, but instead to pass land on to their children and to maintain their way of life (Sellers 1991, 4-15).

At the time most Americans transitioned from the household to the market economy during the course of the nineteenth century, the notion that the goal of markets was to improve the nation’s wealth would have been foreign to them. Instead, Americans were sold the market economy on the promise that it would increase the well-being of families. For Americans to make the shift from the agrarian household economy to the urban market economy, they needed to be persuaded of the advantages of the new system. The sales pitch came to be based on what the market economy would do for families. This pitch came in the form of a rising set of ideas that began to take shape in the late eighteenth century, but which only came into full flower in the nineteenth century. Historians call it the ideology of “separate spheres,” or sometimes the “cult of domesticity,” or even just “domesticity” for short. This way of seeing the world began in the Northeast but spread widely across the United States (Cott 1977, xx-xxii, 1, 33; Ryan 1981, 230-236).3

Why would Americans choose to give up their economic autonomy on the farm and submit themselves to the rising brutality of the workplace and the far longer hours required in industry? Separate spheres ideology gave a clear answer: for the well-being of their families. Men’s reward for their toil in the workplace (which separate spheres saw as uniquely the province of men) came from returning home to a warm hearth and home, a happy wife, and well-raised children (Stanley 1998, 148). One New Hampshire pastor put it this way in 1827:

It is at home, where man . . . seeks a refuge from the vexations and embarrassments of business, an enchanting repose from exertion, a relaxation from care by the interchange of affection: where some of his finest sympathies, tastes, and moral and religious feelings are formed and nourished; - where is the treasury of pure disinterested love, such as is seldom found in the busy walks of a selfish and calculating world. Nothing can be more desirable, than to make one’s domestic abode the highest object of his attachment and satisfaction.

(Burroughs 1827, 18-19)

The farmstead had been depicted unsentimentally in the era of the home economy; not so the home in the market world. Under separate spheres, the domestic realm was the place in which warmth and happiness belonged. Phrases like “home is sweet” and “there is no place like home” proliferated (Cott 1977, 85). And the price of the warmth and happiness of this realm was the wage work that men would have to endure. As Senator Henry Wilson was decades later to declare to freed black men in Charleston, South Carolina, at the end of the Civil War: “Freedom does not mean that you are not to work. It means that when you do work you shall have pay for it, to carry home to your wives and the children of your love” (Child 1866,260).

While part of the ideology of domesticity offered material rewards, the central lure was the thriving families it promised. The idea that family life was the reward for wage drudgery was clearly distilled in this poem published in the National Labor Tribune in 1874:

Though coarse his fare, and scant his means of life,

Thought of his children and loving wife Makes rich amend for all his toil and strife.

As fades the last ray of setting sun,

His home is reached, his daily task is done;

His young ones watching at the open door He sees with joy, and hastens on the more.

Within the housewife, partner of his weal,

Prepares with busy hand the evening meal. . . .

Arrived within, she greets him with a smile And sweet caress - the welcome home. .. .

(quoted in Stanley 1998, 165)

The market economy at this time wasn’t seen simply as an inevitable feature of the world, like a longstanding mountain, as it so often is today. Nor was its end simply seen as increasing the nation’s wealth, regardless of the market’s effects. Instead, it was considered valuable as a means to an important end: flourishing families.

Recognizing that a central part of the liberal project requires an economy that truly supports the well-being and dignity of individuals, as well as the well-being of families, helps put markets back in their proper place. When it comes to getting people the conditions and resources they need to thrive, markets do an excellent job at a couple of very big things: they produce and distribute goods and services that can be monetized to people who desire them and who have the ability to pay. But many things that people need to thrive, like the nurturing that parents provide, aren’t distributed through markets. And the things that are distributed through markets, like high-quality daycare or home health aides to ailing seniors, aren’t affordable to many of the families whose members would benefit from them.

Mainstream economic theory’s obsessive focus on markets has caused it to ignore the important work done by families. That work was traditionally performed by women, and it still is disproportionately done by them. Instead, conventional economists have tended to view families largely in terms of their consumption. But, as feminist economists have pointed out, even the shortsighted goal of healthy markets couldn’t happen without families’ unpaid caretaking and human development work to produce future workers (Folbre 2002). And once we move to the more farsighted issue of how to ensure the important goal of human flourishing, families move to the center of the economic picture. The many tasks they accomplish - including not only the raising of children but the grocery shopping, the cooking, the straightening of the house, the caring for aging parents - help ensure that children and adults of all ages thrive. And it’s all these tasks that are getting squeezed out by the increased demands of the market.

We need to structure the economy in order to ensure that families get both the circumstances and resources they need to do their job well. We also need to ensure that the important caretaking and human development work that many women used to perform in the home is still getting done well in our era, in which far more women work in paid jobs. This brings to the fore the importance of government. Free-market advocates are openly derisive of the state’s role in the economy. Government, they claim, improperly distorts market incentives when it acts in the economic sphere. And to the extent that they concede the government has any role in regulating markets, it is only to correct for what they consider to be market failures. But once we focus on ensuring that people get what they need to thrive, which also means ensuring families get what they need to thrive, a far more active role for government emerges that goes well beyond correcting for market failures.

In fact, as Jacob Hacker and Paul Pierson point out, for most of the twentieth century, economists and policymakers generally recognized the virtues of what economic analysts call a “mixed economy.” In that arrangement, markets were seen to play the central role in producing and distributing goods. But government was also recognized to play an important role in the economy - providing collective goods like education, courts, supporting basic scientific research that the market wouldn’t on its own, and reducing negative spillover costs like pollution, which markets don’t do well on their own. Only in the last decades, as free- market ideology has proliferated in the United States, have the virtues of a mixed economy been forgotten (Hacker and Pierson 2016).

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