Whither in the future?
In the first two chapters of this publication, we explored the depth and scope of child neglect in the Anglo-American world. We now understand the plight of poor children in rich nations. Homelessness and ill-health are the lot of hundreds of thousands of youngsters in advanced industrial countries. We can also appreciate the agonies of middle-class children, betrayed and derailed by marital disruption, parked in front of the television set, left alone by overburdened parents struggling to stay afloat in societies that have grown increasingly hostile to families with children.
In the last chapter, we learned how to ameliorate these problems. The methods do exist. Despite the cut-backs of the 1980s, Western Europe is replete with models that work. In countries as diverse as France, the Netherlands and Sweden, Governments know how to intervene on behalf of families, reversing the tide of cumulative causation so that it spirals up instead of down, supporting rather than weakening fragile families, transforming the destinies of vulnerable children. A wealth of evidence supports the claim that State efforts to provide resources and time for parenting can markedly improve the life prospects of children growing up at risk.
If we know what is wrong and how to fix it, the great unanswered question becomes one of resolve: Can governments in some of the world’s richest countries muster the political will to move on this front?
The barriers are formidable. To begin with, we need to turn around political cultures whose commitment to free markets leads them to oppose so profoundly the regulation of employer intervention in family life and the spending of public money on children’s problems.
Limits and allure of the market
In his Essays in Persuasion, John Maynard Keynes described capitalism as that “extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.” In his view, while the “invisible hand” of classical economic theory is capable of maximizing output in the short run, questions of what is just, what is kind or what is wise in the long run cannot be addressed by the market.
The main reason why free-enterprise economies have worked relatively well over the decades is that women have provided vast quantities of free domestic labour. Up until the 1960s, wives and mothers devoted the bulk of their energies to raising children and nurturing families, and in so doing, supplied the human resources for capitalist production.
This system has ceased to function. Women are no longer able to take all the responsibility for family life. Women now comprise 45 per cent of the American workforce and 42 per cent of the British workforce. And their economic contribution — to national economies and to family budgets — is only going to increase as the end of the century draws near. With plummeting male wages and sky-high divorce rates, it is hard to imagine a scenario where large numbers of mothers have the option of staying home with children on a full-time basis.
The solution is to spread the burden around. Husbands and fathers, employers and government, all have to pull their weight. Such a sharing of sacrifice is particularly fair given the fact that in the modern world the rewards of well-developed children are reaped by society at large, not by individual mothers — or fathers.
Historically, this was not nearly so true. In the 18th century, children as young as seven or eight years old contributed significant amounts of labour to the household, and parents were eager to raise a large number of children so that at least some of them survived to support them in their old age.
Neither of these economic incentives for bearing children exists today. Children do not become productive until their late teens or twenties, and even then, rarely contribute to the parental household. Social security and private pensions have replaced children as the major source of material support in old age.
In the modern world, not only are children ‘worthless’ to their parents, they involve major expenditures. Estimates of the cost of raising a child range from US$200,000 to US$265,000 (95) in the United States and from £50,000 to £80,000 in the United Kingdom. In return for such expenditures, “a child is expected to provide love, smiles and emotional satisfaction, but no money or labour.” (96) In the late 20th century, “a child is simply not expected to be useful” to his or her parents. (97)
That brings us to a critical Anglo-American dilemma. We expect parents to expend extraordinary amounts of energy and money on raising their children, when it is society at large that reaps the material rewards. The costs are private, the benefits are increasingly public. If you are a ‘good’ parent and put together the resources and energy to ensure that your child succeeds in school and goes on to complete an expensive college education, you will undoubtedly contribute to ‘human capital formation’, enhance GNP and help your country compete in the world markets; but in so doing, you will deplete, rather than enhance, your own economic reserves.
As we discovered in the second part of this publication, tighter divorce laws, generous parenting leave and child-care subsidies might well be part of the solution; but whatever the optimum benefits package (and it will vary in different national settings), public policy will have to be used to free up many more resources and much more time for parents — men and women. The critical business of building strong families can no longer be considered a private endeavour, least of all a private female endeavour.
Such ideas resonate in continental Europe. For decades, Swedish social democrats and German social marketeers have worked to refine models of capitalist growth that nurture young people. They are committed to an activist State intervening both to protect and subsidize families with children. Their vision is inspired by notions of social justice, but it also recognizes that over the long haul, high-performing economies are dependent upon strong families. Children are 100 per cent of the future; if they are neglected, stagnation and decline are inevitable.
The reason that these arguments need to be made again in the 1990s is that unfettered markets have acquired new allure. Hard on the heels of British and American conservative successes in discrediting government during the 1980s, the collapse of communist regimes in Central and Eastern Europe and the Soviet Union from 1989 to 1991 seemed to confirm the “victory of economic and political liberalism.” (98)
Large segments of public opinion came to believe that free enterprise is intrinsically good, while State action is intrinsically bad. In this new climate of opinion, the Anglo-American model of free-wheeling capitalism is particularly admired. In the words of London’s Financial Times: “For millions around the world, the American flag is a symbol of an economic and social system that works. No country is more committed to personal freedom and the market economy than the United States, and no country offers the enterprising individual greater opportunity.” (99)
Of course, free markets, American style, have not ‘worked’ for children. They have been a disaster, but that does not seem to have diminished the appeal of the American model. In large numbers of countries, including Western European ones, the economic landscape is newly littered with privatization schemes, shrinking public budgets and apologetic bureaucrats. In countries as committed to the well-being of children as the Netherlands and Sweden, well-established, effective programmes of family support are being dismantled in the name of freeing markets and returning responsibility to parents. Even in Sweden, a 15- billion-kronor package of health and public service cuts, many of which will harm children, is on the agenda.
The small country of New Zealand offers a cautionary tale. (100) Its recent history provides sobering evidence of the American model’s ability to wreak havoc in both the economic and social spheres. Long regarded as one of the world’s most enlightened social democracies, New Zealand has, since 1984, demolished a cradle-to-grave social welfare system in the name of economic efficiency. Nevertheless, untrammelled markets have not produced vigorous growth. On the contrary, eight years of stringent monetarist policies have produced massive unemployment, rising crime rates, a widening gap between rich and poor, and a declining GDP. Between 1985 and 1990, New Zealand’s GNP fell by 0.7 per cent, the worst record of any industrialized country, while unemployment more than doubled. The deterioration in living standards has been particularly severe among families with children, with predictable results. New Zealand now has the highest youth suicide rate among industrialized countries, and reported cases of child abuse have doubled since 1985.
Throughout the Anglo-American world the pattern is the same. Unfettered markets do not seem to work on either the social or the economic front. After approximately a decade of market forces, growth rates in the increasingly ‘private’ economies of Australia, Canada, New Zealand, the United Kingdom and the United States stubbornly lag behind the supposedly welfare-ridden, inefficient economies of Europe.
How can we expose this love affair with free markets and take (or retake) collective responsibility for our children? The answer is simple. We must remind ourselves of the appalling costs of child neglect. Any nation that allows large numbers of its children to grow up in poverty, afflicted by poor health, handicapped by inferior education, deserted by fathers and cut adrift by society, is asking for economic stagnation and social chaos, and will get it — richly deserved.
Harnessing enlightened self-interest
In the United Kingdom and the United States, business leaders are beginning to realize that the swelling tide of child neglect has potentially disastrous consequences not only for the individual child but for society as a whole. Deprived, undereducated children grow into problem-ridden youngsters who are extremely difficult to absorb into the modern workforce.
Human capital requirements are escalating. The skill needs of advanced industrial economies are moving rapidly up the scale, “with most new jobs demanding more education and higher levels of language, math and reasoning skills.” (101) Qualifications for jobs, even low-wage jobs, are rising. Estimates are that by the late 1990s the average job will require a full year more education than was true in the late 1980s.
The United States — or New Zealand, for that matter — should clearly invest more in education. Schools can and should do more to prepare youngsters for productive employment, but they will continue to fall short of the mark unless those societies also support parents and give them the time and resources to do better by their children.
The education system cannot compensate for the tasks overburdened parents no longer perform. Chicago sociologist James Coleman has shown that across a wide range of subjects in literature and science, “the total effect of home background is considerably greater than the total effect of school variables.” Overall, the home is almost twice as powerful as the school in determining student achievement at age 14. (102)
Given chaos on the home front, youngsters in Anglo-American cultures — particularly in the United Kingdom and the United States — find it difficult to do well in school. A 1989 study by the International Assessment of Math and Science, which examined students in 11 advanced industrial countries, showed American students coming in last and British students next to last. Indeed, less than half of American 17- year-olds can correctly determine whether 87 per cent of 10 is greater than, less than, or equal to 10; nor can they determine the area of a rectangle. Some 35 per cent of American eleventh-graders write at or below the following level: “I have been experience at cleaning house Ive also work at a pool for I love keeping things neat organized and clean. Im very social 111 get to know people really fast.” (103)
Such an impressive level of educational failure has serious repercussions in the labour market. In 1987, New York Telephone had to test 57,000 people before it could find 2,100 who were well educated enough for entry-level jobs as operators or repair technicians. IBM discovered after installing millions of dollars worth of sophisticated equipment in its Burlington, Vermont factories that it had to teach high-school algebra to workers before they could handle the new technology. Xerox’s Chairman, David Kearns, estimated that United States industry spends US$25 billion a year on remedial education for workers.
The stakes are enormous. It is not just a question of whether Xerox will grow at 2 per cent or 4 per cent a year, it is a question of whether a shortfall in skills and in labour productivity will trigger a permanent decline in the American productive potential. The fact is, human capital is now the most important factor of production.
As economies become international, a nation’s most important competitive asset becomes the skills and cumulative learning of its workforce. The very process of globalization makes this true, since every factor of production other than workforce skills can now be duplicated anywhere in the world. In the words of political economist Robert Reich, “Capital now sloshes freely across international boundaries, so much so that the cost of capital in different countries is rapidly converging. State-of-the-art factories can be erected anywhere. The latest technologies flow from computers in one nation, up to satellites parked in space, then back down to computers in another nation — all at the speed of electronic impulses. It is all fungible: capital, technology, raw materials, information — all, except for one thing, the most critical part, the one element that is unique about a nation: its workforce.” (104)
In fact, because all of the other factors of production can move so easily around the world, a workforce that is knowledgeable and skilled at doing complex things sets up a ‘virtuous circle’. High-calibre workers attract global corporations, which invest and give the workers well-paid jobs; high-productivity workers, in turn, further develop through on-thejob training and experience. As skills become more sophisticated and experience accumulates, “anation’s citizens add greater and greatervalue to the world — and command greater and greater compensation from the world — improving the country’s standard of living.”
If a ‘virtuous circle’ is operating in France and Sweden — nations that have invested time and money in their children — a ‘vicious circle’ operates in the United Kingdom and the United States, where child neglect has undermined human capital formation and frightened away potential investment. A 1991 survey by the Harvard Business Rrricir shows corporate executives in countries as diverse as Argentina, Germany and Italy giving enormous weight to human resources in decisions about where to site new investment.” (105)
The best news of the early 1990s is that the private sector has seen the writing on the wall and is beginning to mobilize political energy. For example, in the United States, the Committee for Economic Development, a think-tank comprising 200 business leaders, has begun to lobby hard for massively increased public investment in programmes such as Headstart.
In the United Kingdom, Opportunity 2000, a consortium of 15 large corporations, is newly promoting child-care subsidies for working parents. To use the eloquent words of the Committee for Economic Development: “The nation cannot continue to compete and prosper in the global arena when more than a fifth of our children live in poverty and a third grow up in ignorance ... If we continue to squander the talents of millions of our children, America will become a nation of limited human potential. It would be tragic if we allowed this to happen.” (106) Not only is it tragic for the United States, but also tragic for the profitability of individual corporations — for increasingly, the competitive strength of any business enterprise depends on the calibre of its human capital.
The private sector is rarely in the vanguard of social policy, bi it when it comes to human resources, the statistics and the trend indicators speak with an urgency that is hard to ignore. Corporate executives understand that the welfare of children cannot be left to the vagaries of the private market, because on the backs of t hese children rides the future prosperity of nations — and firms.
It seems that in the waning years of the 20th century, doing what is right for our children and what is necessary to save our collective skins will finally come together: Conscience and convenience will converge.
Are governments in the rich world able to learn from this hardheaded investment logic? Will a human capital frame of reference enable countries such as the United Kingdom and the United States to move on this front?
Arguing the case for enlightened self-interest is clearly a critical first step. It is important to show taxpayers that neglecting children is an extremely expensive proposition. In the United States, for example, very few citizens understand that they are already picking up the tab for damaged children — just one class of high school drop-outs costs the country US$242 million in forgone earnings. Compassion, it turns out, is a whole lot cheaper than callousness.
But conjuring up political will is a much more complicated exercise than cost-benefit analysis. In the Anglo-American world, investing in children involves nothing less than turning around political cultures that have become deeply antagonistic to government action. In the wake of the Reagan-Thatcher revolutions, politicians are loath to intervene no matter how worthy the cause or effective the programme. Conceited action to save our children is therefore contingent upon a new type of leadership. If US President Bill Clinton — or any other leader — can convince the electorate that a ‘reinvented’ government is capable of promoting investment and taking responsibility for the future, then, and only then, can we create the conditions that will allow our children to thrive.