BigPic: 4-7-19 All in the Family Debt | Boston Review
All in the Family Debt
How Neoliberals
and Conservatives Came Together to Undo the Welfare State
Editor's Note: This essay is adapted from Family Values: Between
Neoliberalism and the New Social Conservatism. – The Boston Review 5-31-17
In 1601,
as a succession of failing harvests left people jobless and hungry, and
vagrants roamed across England, the Elizabethan poor laws were established to
reassert control over the population. The poor laws distinguished between the
impotent poor, unable to work and eligible for care in an almshouse; the
able-bodied poor, who must be compelled to work in a poorhouse; and the idle
poor or vagrants, who could be imprisoned or confined in a House of Correction.
But before any recourse to the almshouse or prison could be activated, all
three of these populations were subject to the principle of familial
responsibility. In other words, before the parish took any action, family
members would be compelled to provide as much support as they could. “The
father and grandfather,” the law stated, “and the mother and grandmother, and
the children of every poor, old, blind, lame and impotent person, or other person
not able to work, being of a sufficient ability, shall, at their own charges,
relieve and maintain every such poor person.” Familial responsibility, it was
established, was the first line of defense in combatting poverty and improving
social welfare.
By emphasizing the economic obligations of kinship, the
family—not the state—became responsible for investing in the welfare of
children.
The poor
laws went on to see several iterations both in England and America. The early
American colonies imported them virtually word for word and later incorporated
them into state legal systems. But despite the many policy tweaks and changes
that have occurred since, one element of the original poor laws has remained
stubbornly in place: the foundational role of familial responsibility. Indeed,
save for a brief respite in the 1960s, American social welfare policy and
ideology has maintained a persistent—and damaging—attachment to that framework.
Some ramifications are obvious—such as when legal relationships of spousal support
and paternity are enforced without consent from either party—but some are more
nuanced. The current crises of tuition costs and college debt, for instance,
are the downstream effects of limiting a free public good and reinstating
“familial responsibility.”
Indeed,
many of the policy reforms after the Reagan revolution can be understood as an
attempt to reinvent the imperative of familial responsibility in the new idiom
of household debt. As policymakers imposed cuts to health, education, and
welfare budgets, they simultaneously identified the family as a wholesale
alternative to the twentieth-century social state. And as the responsibility
for deficit spending shifted from the state to the household, the private debt
obligations of family were defined as foundational to socioeconomic order. The
family, not the state, would bear primary responsibility for investing in the
education, health and welfare of children.
This
return to Elizabethan poor law principles was made possible, in part, because
of an unlikely alliance between neoliberals and social conservatives. Despite
their differences on virtually all other issues, neoliberals and social
conservatives were in agreement that the bonds of family needed to be
encouraged—and at the limit enforced—as a necessary counterpart to market
freedom. Though it is often overlooked in the literature, economic liberalism
is as much concerned with familial responsibility as it is with personal
responsibility, and the neoliberal emphasis on familial relations as a substitute
for public relief is an unappreciated, but critical aspect of free-market
liberalism. More than anything else, this appeal to familial responsibility
sealed the working relationship between free market liberalism and social
conservatism, very much defining the shape of social welfare in the
contemporary era.
When we
take a close look at American social history, the rules of familial
responsibility can be seen at work most clearly during periodic episodes of
sexual revolution. By invigorating the poor laws’ emphasis on kinship, the
state could contain the costs of evolving sexual mores by imposing marital and
familial support as an economic obligation. That is, at each historical
juncture where the legal obligations of family were somehow weakened or
threatened by the generalization of divorce, the waning importance of marriage,
or the liberation of slaves who had never been married, the poor laws would be
reinforced to punish those who threatened to transfer the costs of their
welfare onto the state.
One of
the great victories of the American left in the 1960s was to almost completely
expunge the last vestiges of the poor law tradition from the American welfare
system. Throughout this decade, public interest lawyers associated with the
welfare rights movement brought a series of test cases before the federal courts
to challenge the array of moral regulations that bore down on unwed women in
public assistance programs. Their explicit aim was to bring the “sexual
revolution” in family law to the welfare poor. If the Supreme Court now
recognized a constitutional right to sexual privacy, why would this right not
be extended to women on welfare? If middle-class white women were escaping the
dependence of the Fordist family wage by exiting the home, demanding equal
wages and freer access to divorce, why would this freedom not be extended to
women on welfare? And if marriage no longer counted in determining the legal
status of middle-class children, why would the children of welfare mothers
still be classified as illegitimate and punished for the sins of the parents?
In a series of cases brought before the Supreme court between the 1960s and
1970s, almost every normative stricture on the welfare benefits paid to single
women were overturned.
Despite their differences on virtually everything else,
free-market neoliberals and social conservatives came together to fight the
breakdown of family, albeit for different reasons.
But this
development was profoundly unsettling to people across the political spectrum,
and it is fair to say that it crystallized the enormous welfare backlash of the
1970s. It is in this period that you begin to hear the argument that public
spending on welfare was making women too independent of presumptive husbands
and fathers and thus effectively subsidizing the breakdown of the family.
Writing at the end of the 1970s, the Chicago school neoliberal Gary Becker
remarked that the “family in the Western world has been radically altered—some
claim almost destroyed—by events of the last three decades.” He went on to list
a familiar series of ills: from the rapid rise in divorce rates and
female-headed families, to the decline in birth rates and the growing labor
force participation of married women, which he claimed had “reduced the contact
between children and their mothers and contributed to the conflict between the
sexes in employment as well as in marriage.” Becker believed that such dramatic
changes in the structure of the family had more to do with the expansion of the
welfare state in the post-war era than with feminism per se—which could be
considered a consequence rather than an instigator of these dynamics. Like many
of his contemporaries, both neoliberals and neoconservatives, Becker singled
out Aid to Families with Dependent Children (AFDC)—the “poor woman’s
alimony”—as one of the primary causes of the breakdown of the family.
Becker’s
abiding concern with the destructive effects of public spending on the family
represents a key element of his microeconomics—but one that is consistently
overlooked by the critical literature. Indeed, at different times and in
different contexts, each of the key figures of American neoliberalism can be
found invoking the idea that the “natural obligations” of family should serve
as a substitute for the welfare state, that the “altruism” of the family
represents a kind of primitive mutual insurance contract and serves as a
necessary counterweight to market freedoms. From here derives the notion, now
pervasive in American welfare practice, that the state has the right to
identify and enforce legal obligations of marital support and child custody
even when the parties concerned do not consent to or recognize this
relationship. In the absence of a suitable family structure, the state is
authorized to enforce the sexual contract just as it is authorized to enforce
work.
As Governor
of California in the late 1960s and 70s, Ronald Reagan leveraged similar
arguments to launch a right-wing assault on welfare. He was one of the first to
campaign against the gains of the welfare rights movement and the first to
reinvigorate the state-based poor laws of familial responsibility as a guiding
principle of social policy reform. Reagan targeted all kinds of state
welfare—the California Welfare Reform Act of 1971 sought to revive old state
laws holding family members liable for the costs of elderly care in state homes
or the care of disabled children in public institutions—but he was primarily
interested in mothers on AFDC. Echoing the poor laws, the idea was that
wherever possible an “absent (biological) father” should be identified and made
responsible for looking after a single mother and her children. Indeed, where
necessary, the state should be empowered to enforce such responsibilities when
they were not forthcoming of their own accord.
As
president, Reagan attempted to translate his Californian project in welfare
reform onto the federal stage, without success. Instead Reagan’s project was
brought to final fruition by President Clinton, whose monumental welfare reform
of 1996 effectively federalized the poor law tradition, turning America’s
welfare bureaucracy into an immense national apparatus for policing and
enforcing child support obligations amongst the welfare poor. The New Democrat
Clinton achieved at a federal level what Reagan achieved only partially at a
state level. Indeed, he went further: Clinton not only federalized the
neoliberal principle of familial responsibility, he combined it with a social
conservative focus on the active reconstitution of married, family life. His
efforts in this direction later flowered into a multitude of pedagogical
programs designed to sustain healthy marriages, responsible fatherhood and
pre-marital abstinence amongst the welfare poor. Clinton’s welfare reform can
be said to reflect both social conservative and neoliberal views on poverty
management.
The United States has curtailed liberation movements that
threatened to undermine the family and transfer the cost of welfare
to the state.
Once you
recognize that American neoliberalism proposes a revival and reinvention of the
poor law principle of familial responsibility you begin to understand how
neoliberals have been able to forge a working relationship with social
conservatives over the past four decades—a relationship that otherwise appears
enigmatic. Neoliberals and social conservatives are equally invested in the
promotion and enforcement of legal family obligations, albeit for different
reasons: neoliberals because they oppose the state subsidization of
irresponsible lifestyle choices (sex outside of marriage, illegitimate
childbearing and unprotected sex, all of which represent a potential burden on
the state), neoconservatives because they see the bonds of family life as
foundational to social order itself. In fact, this convergence of interests is
nothing new. A similar alliance between classical liberals and social
conservatives defined the so-called Gilded Age of late nineteenth century
capitalism, also an era of triumphant laissez faire economics in which public
relief was marginalized in favor of charitable systems of poverty management focused
on familial responsibility. In some sense then, the contemporary alliance
between neoliberalism and social conservatism recalls this earlier period of
American life.
This
alliance can be seen at work in a whole range of social policy arenas, where
neoliberals and social conservatives have worked together to limit public
spending and restore institutional authority by invoking the principle of
familial responsibility. Higher education is a case in point. In 1960s America,
both neoliberals and neoconservatives were alarmed by the militancy of the new
student left and convinced that it could be explained by rising public spending
on the sector, in much the same way that family breakdown could be attributed
to increasingly generous welfare programs.
The
creation of a generous federal grant and loan system under the Higher Education
Act of 1965, along with a system of public universities offering tuition-free
education, meant that an entire generation of students were able to go to
college without relying on family support. This was also a period in which
rising wages and expanding public services allowed young adults to attain
financial independence earlier than any other time before or after in American
history. Neoliberal and neoconservative observers of the 1960s were convinced
that these unheard of economic conditions were responsible for the peculiar
kinds of radicalism bubbling up on college campuses around the country.
Reporting on conditions in the United States for the Trilateral Commission, the
neoconservative Samuel Huntington infamously denounced the “democratic surge of
the 1960s” with its “general challenge to existing systems of authority, public
and private.” In one form or another, he observed, “this challenge manifested
itself in the family, the university, business, public and private
associations, politics, the governmental bureaucracy, and the military
services. People no longer felt the same compulsion to obey those whom they had
previously considered superior to themselves in age, rank, status, expertise,
character, or talents.” And it was particularly visible on college campuses.
“The single most important variable” shaping this dynamic, he ventured, was the
democratization of higher education.
Neoconservatives
would spend the next few decades railing against affirmative action and
fighting a cultural war against the new minority disciplines of black, ethnic
and women’s studies. Neoliberal economists such as Milton Friedman and James M.
Buchanan also suspected some kind of causal connection between free public
education and the inflated demands of the student movement, but advocated a
somewhat more pragmatic and adaptive response to the problem. Drawing on the
microeconomics of rational choice, they sought to show how the creation of free
public goods such as education could act as a perverse incentive towards
anti-authoritarianism, and conversely, how the pricing of these same goods
could reverse such alarming trends. Neoconservatives and neoliberals were in
agreement that the student movement could be neutralized only if free tuition
was abolished and familial responsibility reinstated, but neoliberals found a
way to soften the blow by simultaneously calling for an expansion of consumer
credit markets.
In his
1962 publication, Capitalism and Freedom,
Friedman argued that the returns to investment in education (in the form of
higher salaries) accrued entirely to the individual student. Therefore the
individual (and his or her family) should be held responsible for the costs of
his education. Friedman agreed with many of his more Keynesian-minded
contemporaries that there had been massive underinvestment in so-called “human
capital” assets such as education and healthcare, but he believed that this
failure could best be remedied through the liberalization of consumer credit
markets. The fact that low-income students were unable to pay for a degree and
thus discriminated against in the labor market could be attributed to
“imperfections in the capital market,” that is, the absence of a liquid market
in private student loans. He saw private credit markets as the most efficient
source of funding for student loans and thought that government incentives to
banks were the best way of stimulating this market—a model that Governor Reagan
invoked to attack the funding structures of the University of California system
and later used, as president, to overhaul higher education in the United
States.
Clinton's welfare reforms turned America's bureaucracy into an
immense national apparatus for policing the poor.
Gary
Becker had a very similar position to Friedman but as a microeconomist was
always much more attentive to the intimate, domestic underpinnings of “human
capital” investment. Free public education, Becker argued, could be critiqued
on the same grounds as the progressive income tax, which (in his words)
“initially narrows inequality” but ends up raising the “equilibrium level of
inequality…because families reduce their investments in descendants.”
Translation: if you make education free, parents will stop investing in their
children! If we could only turn off the spigots of government spending, then
families would spontaneously rediscover their natural altruism and start
investing in their children again. The argument was at odds with the available
evidence, but it enabled Becker to identify private credit markets as a logical
alternative to free tuition. In Becker’s ideal world, students would once again
look to the family as a source of economic support, and yet the old
stratifications of family wealth would simultaneously be deferred and
elasticized by expanding opportunities for private debt. With a little help
from government, the old poor law tradition of familial responsibility could be
reinvented in the form of an infinitely elastic intergenerational debt.
When we
look at the subsequent history of higher education funding in the United
States, it is astounding how closely neoliberal reforms of the sector have followed
the prescriptions set out by Friedman and Becker. Since Reagan’s reforms of
higher education in 1980, federal policy has tended to diminish the spending
power of Pell grants and to push instead for the expansion of federal and
private student loans, (federal loans have until recently served to subsidize
the private student loan market). At the same time, state governments have been
chipping away at their investments in public universities so that institutions
that were free for state residents before the 1980s have now become effectively
private. The effect of this policy drift, as few would be unaware, has been
rapidly inflating tuition costs and an enormous build-up of student debt. As
movements such as Strike Debt have explained so well, inequality now tends to
manifest in the form of differing degrees of debt servitude rather than
outright exclusion.
What
Strike Debt fails to take into account, however, is the fact that so-called
private or personal debt very often takes the form of intergenerational,
familial debt binding together young adults, parents and sometimes more distant
relatives in webs of economic dependence that may last for decades. As tuition
fees have skyrocketed and lending thresholds have been raised, both the federal
government and private lenders have pushed students towards loans that are
signed by parents and where the obligations between parent and child serve as a
kind of substitute for secure collateral. As a consequence, a growing number of
parents are finding themselves saddled with student debt well into old age, and
the global market in securitized household debt is entirely dependent on our
intimate obligations to each other. The fact that we are unwilling to abandon
such familial obligations serves a highly useful anchoring role for the market
in securitized credit, ensuring that consumer debtors remain wedded to a
contract much longer than professional market players.
Today the
effects of this shift in public finance is experientially self-evident. The New
York Federal Reserve recently published a report seeking to account for the
fact that a growing number of young adults are living at home with their
parents well into their 20s and even 30s—a demographic trend it attributes
first and foremost to college debt. The shift from public to private investment
in so-called human capital has forcefully reinvigorated the importance of
family debt networks and inherited wealth in the shaping of social destinies.
The effect of more than three decades of neoliberal economic reform has been to
reinstate the legal and economic function of the private family as the first
line provider of welfare, very much in keeping with the four-hundred year old
poor law tradition, but distinct inasmuch as it involves expanding
opportunities for personal indebtedness. As a result, neoliberalism has
reinvented the poor law tradition in the idiom of intergenerational debt. We
can only escape the tyranny of inherited wealth by including kin within our own
debt servitude. It is this predicament, more than rampant individualism, which
defines the experience of our times.
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