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.
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