Beware Extended Family

In the last few weeks I’ve come across many sources emphasizing the same big theme that I hadn’t sufficiently appreciated: our industrial world was enabled and has become rich in large part because we’ve reduced the power and importance of extended families. This post ends with a long list of quotes, but I’ll summarize here.

In most farmer-era cultures extended families, or clans, were the main unit of social organization, for production, marriage, politics, war, law, and insurance. People trusted their clans, but not outsiders, and felt little obligation to treat outsiders fairly. Our industrial economy, in contrast, relies on our trusting and playing fair in new kinds of organizations: firms, cities, and nations, and on our changing our activities and locations to support them.

The first places where clans were weak, like northern Europe, had bigger stronger firms, cities, and nations, and are richer today. Today people with stronger family cultures are happier and healthier, all else equal, but are less willing to move or intermarry, and are nepotistical in firms and politics. Family firms do well worldwide, but by having a single family dominate, and by being smaller, younger, and less innovative.

Thus it seems that strong families tend to be good for people individually, but bad for the world as a whole. Family clans tend to bring personal benefits, but social harms, such as less sorting, specialization, agglomeration, innovation, trust, fairness, and rule of law.

All those promised quotes:

Alex:

0.2% of all marriages are [cousin marriages] in the United States but in India 26.6% marriages are [cousin marriages], in Saudi Arabia the figure is 38.4% and in Niger, Pakistan and Sudan a majority of marriages are [cousin marriages]. Cousin marriage used to be more common in the West. … [Family] wealth becomes more dilute more quickly with outside marriage. Cousin marriage may also increase cooperation within the extended family and help to fight off parasites. (more)

He linked this paper:

Cousin marriages create extended families that are much more closely related than is the case where such marriages are not practiced. … kin groupings may be extremely nepotistic and distrusting of non-family members in the larger society. … Societies having high levels of familism tend to have low levels of generalized trust and civic engagement, two important correlates of democracy. Moreover, to people in closely related kin groups, individualism and the recognition of individual rights … are perceived as strange and counterintuitive ideological abstractions. (more)

And this by Steve Sailer:

In Islamic countries, loyalty to extended (as opposed to nuclear) families is often at war with loyalty to nation. Civic virtues, military effectiveness, and economic performance all suffer. … Alliances of family override any consideration of fairness to people in the larger society. … The well-known lack of trust among Arabs for anyone outside their own family adversely affects offensive [military] operations. .. The Catholic Church’s long war against cousin marriage, even out to fourth cousins or higher … weakened the extended family in Europe, thus lessening the advantages of arranged marriages. It also strengthened broader institutions like the Church and the nation-state… inbreeding “does not overextend the number of persons whose deaths an honorable man must avenge.” … Nepotistic corruption is rampant in countries such as Iraq. (more)

A friend emailed me links to three nice posts by hbdchick all about how Europe got rid of family clans especially early. She quotes Mcfarlane on problems with extended families:

The separation between the household and the economy … has not occurred. … ownership is not individualized. … The present occupants of the land are managers of an estate; they cannot disinherit their heirs, the father is merely the leader of a production team…. Land is not viewed as a commodity which can be easily bought and sold. There is a strong emotional identification with a particular geographical area. Consequently, there is rather little geographical mobility; any movement to the towns is one-way, with few people returning to the countryside. … The society is also divided into many self-contained, though identical, local communities, with their own customs, dialect and beliefs.” (more)

Arnold Kling on The Rule of the Clan:

Our complex economic system requires that strangers deal honestly with one another when they exchange goods and services. Such a system functions more naturally in a Society of Contract than in a Society of Status. In the former, commercial obligations are inherently binding, regardless of the identity of the party with which one deals. In the latter, there is little sense of obligation in dealing with members of a different kinship group. What we think of as the rule of law does not exist in clan-based society. …. Weiner’s thesis [is that] … in the absence of a strong central state, the rule of the clan is the inevitable result. (more)

Some results on family firm performance:

Risk taking …in family firms … is positively associated with proactiveness and innovation. .. Even if family firms do take risks while engaged in entrepreneurial activities, they take risk to a lesser extent than nonfamily firms. … Risk taking in family firms is negatively related to performance. (more)

Controlling for size, industry, and managerial ownership, the results suggest that firms controlled by the founding family have greater value, are operated more efficiently, and carry less debt than other firms. (more)

This paper examines the immediate and long-term impacts on financial performance of 124 management successions within Canadian family controlled firms. When family successors are appointed, stock prices decline by 3.20% during the 3-day (−1 to +1) event window, whereas there is no significant decrease when either non-family insiders or outsiders are appointed. (more)

A study of 1,141 small privately held U.S. family and non-family firms that suggest the overall agency problem in family firms could be less serious than that in non-family firms. (more)

The most valuable public firms are those in which independent directors balance family board representation. In contrast, in firms with continued founding-family ownership and relatively few independent directors, firm performance is significantly worse than in non-family firms. … Family firms … exhibit better performance than non-family firms. Traditional governance devices such as institutional investor ownership and CEOs’ equity-based pay are significantly less prevalent in family firms than in non-family firms. [Family firms tend to be smaller and younger.] (more)

Last but not at all least, an NBER paper by Alesina & Giuliano on Family Ties:

Strong family ties are negatively correlated with generalized trust; they imply more household production and less participation in the labor market of women, young adult and elderly. They are correlated with lower interest and participation in political activities and prefer labor market regulation and welfare systems based upon the family rather than the market or the government. Strong family ties may interfere with activities leading to faster growth, but they may provide relief from stress, support to family members and increased wellbeing. …

Weber (1904) who argues that strong family values do not allow the development of individual forms of entrepreneurship, which are fundamental to the formation of capitalistic societies. … In studying differences between the Southern and Northern part of Italy, [Banfield] suggested that “amoral familism” was at the core of the lower level of development of the South. …

In an experimental setting … trust game, played by a representative sample of the British population, … people with strong family ties have a lower level of trust in strangers. … To explain contemporary outcomes of European regions, [researchers] identify important links between family types and regional disparities in household size, educational attainment, social capital, labor force participation, sectoral structure, wealth and inequality. .. Nuclear families encourage both flexibility and independence; corporations substitute for kinship groups and provide safety net, therefore complementing the nuclear family. …

Historical patterns of urbanization within Europe reflect these different family traditions, with early urbanization being much more diffused in the European regions, where families with weaker ties were more prevalent. … Strong family ties are positively correlated with home production, lower labor force participation of women and young adults, and negatively with geographical mobility. ..

[There is] an inverse relationship between family ties, generalized trust and political participation. … Family ties … help explain living arrangements and geographical mobility of young generations, larger fractions of family firms across countries and cross-country heterogeneity in employment rates. … Societies dominated by absolute nuclear families (or weak family ties, such as for example the Anglo-Saxon countries) facilitate the emergence of a pension system which acts as a flat safety net entailing the largest within-cohort redistribution. …

A one standard deviation in growing season variability corresponds to a 0.40 standard deviation decrease in the strength of family ties, for precipitation, and a 0.38 standard deviation decrease for temperature. …

Countries with stronger family ties have lower economic development on average, measured by GDP per capita. … the strength of family ties is associated with lower quality of institutions. … There is a strong correlation between the inherited family ties of the children of immigrants born before 1940 and current family ties in the countries of origin of their parents. …

[Compared to] Great Britain and the US, … an increase in the duration of unemployment spells of male household heads is associated with smaller consumption losses in Spanish and Italian households. … In Spain and Italy, the family appears to supplement for the lack of generosity of the welfare system and for the imperfection of capital markets. …

Strong family ties … have positive effects in an individual’s life, as measured by happiness and self-reported measures of health. The magnitude of the effect is also sizeable: the beta coefficients of family ties on the three measures of wellbeing are equal to 0.08, 0.06 and 0.03 respectively (for a comparison, the impact of the highest level of education is equal to 0.09, 0.04 and 0.08).

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  • Unity

    The relevance to immigration, of course, is obvious.

    • jhertzli

      We can weaken clans elsewhere in the world by allowing more immigration.

      • anon666

        I’d suspect that urbanization and an general declining fertility rate in most countries other than Afghanistan and sub-Saharan Africa could deal an eventual death blow to the clan as well. hbdchick suspects that clannishness has a genetic component more prevalent in certain populations that wouldn’t disappear with the clan itself. I wouldn’t be surprised, given that all other personality traits are heritable. With the collapse of tradition and the clan, the clannish impulse can be redirected toward new artificial in-groups, such as the fictional brotherhood of Muslims, with an altogether worse result.

  • Stephen Diamond

    Strong family ties … have positive effects in an individual’s life, as measured by happiness and self-reported measures of health. The magnitude of the effect is also sizeable: the beta coefficients of family ties on the three measures of wellbeing are equal to 0.08, 0.06 and 0.03 respectively (for a comparison, the impact of the highest level of education is equal to 0.09, 0.04 and 0.08).

    As Steve Sailer’s piece points out, there are biological costs to the individual. We’re speaking here of the promotion of inbreeding in patriarchal societies. This goes as far as common uncle-niece couplings in India.

    As for these “measures” of well-being that some of you economists constantly trumpet: why give such self-reports any credence? Extended-family members feel a duty to their families to pretend to happiness, while smarting under the boot of paternal oppression.

    • IMASBA

      “Extended-family members feel a duty to their families to pretend to happiness, while smarting under the boot of paternal oppression.”

      I think it’s safe to assume the questionnaires are anonymous.

      • Stephen Diamond

        Self-deception is the typical form of human hypocrisy.

  • IMASBA

    In Northern Europe clans were dominant just like anywhere else (except for places that traditionally had large cities and a national identity, like Egypt and coastal China) as late as the dark ages, then they just vanished quickly for some reason at around the time large cities appeared. It’s a chicken and the egg kind of thing: cities tend to weaken clans, weakened clans tend to give rise to cities, which happened first in Northern Europe I have no idea.

    “Thus it seems that strong families tend to be good for people individually, but bad for the world as a whole. Family clans tend to bring personal benefits, but social harms, such as less sorting, specialization, agglomeration, innovation, trust, fairness, and rule of law.”

    Yes, this is why industrialized/industrializing nations without a strong welfare system are such shitty places to live.

    • Konkvistador

      HBD Chick has a good theory on this. See her writing kn Church limits on inbreeding and spread of Manoralism.

  • Alexander White

    It’s curious to me that someone who claims to favor “giving people what they want” suddenly develops a taste for imposing certain marriage patterns here. 0.2% of marriages in the US may be cousin marriages–it probably relates to them being legally banned in a majority of states.

    http://www.3quarksdaily.com/3quarksdaily/2010/07/seriously-what-about-cousin-marriage.html

    And no, you don’t want societies like Saudi Arabia either. But the major stateside issue is discrimination. It appears this issue gets about 0.2% of the attention of gay marriage, though.

    • John_Maxwell_IV

      What if I want to be an individualist by default, but a collectivist in cases where it seems to make sense? Is that allowed?

    • Stephen Diamond

      If you agree with the logic, best presented by Sailer, then discrimination against cousin marriages helps even the score.

      But gay marriage has unrecognized problems of the same sort: the strengthening of bonds within some same-sexed groups at the expense of societal loyalties.(See, somewhat related, Is same sex marriage coherent?http://tinyurl.com/yz3zhbw )

    • IMASBA

      “It’s curious to me that someone who claims to favor “giving people what they want” suddenly develops a taste for imposing certain marriage patterns here. 0.2% of marriages in the US may be cousin marriages–it probably relates to them being legally banned in a majority of states.”

      A) cousin marriage severely increases the risk of genetic defects and a weakened immune system of any children born out of the marriage, B) it is also indicative of force: out of all the people you meet you probably wouldn’t choose your cousin if it was really up to you, especially considering A), it’s much more likely your family is forcing you for financial reasons (it’s not like millions of people are closeted cousin lovers).

      Gay marriage has none of these fundamental problems, opposition to it stems entirely from religious ideas and a “yuck” factor (which may itself stem from religious ideas).

  • michael vassar

    Hmm. That last data point seems very important if one is optimizing for measures of individual welfare terminally. Shouldn’t the title be “beware abandonment of extended family”?

    • Robin Hanson

      On a selfish level yes. But i tend to focus my advice on social gains, and less on personal gains.

      • http://www.facebook.com/michael.vassar.58 Michael Vassar

        What even constitutes a social gain if not the aggregation of individual gains? Increased military power?

      • IMASBA

        Or the ability to save the species from a meteorite, environmental collapse or an epidemic.

        Most importantly though you don’t want to raise average happiness by making a minority worse off than some lower limit of human decency (because it’s unfair to not spread the pain). The nepotism and social exclusion associated with clans have the potential to break this rule (though obviously it’s not so bad if everyone is a member of a clan).

    • Stephen Diamond

      No one who has actually observed these extended families in action will give that “last data point” any credence. Of course they think they’re happy when it’s obvious to all that they’re miserable.

      Data points? Garbage in, garbage out.

      • http://www.facebook.com/michael.vassar.58 Michael Vassar

        Actually, outsiders do observe members of less wealthy and integrated cultures and conclude that they are happy all the time. I mean, have you ever, for instance, seen an issue of National Geographic? Really, this is a large part of what moralists do.

      • Stephen Diamond

        conclude that they are happy all the time.

        You mean like Iraq, Afghanistan, and Mexico? (the last, regarding which I’d be interested in the role of extended families, inasmuch as Mexico is Catholic [anti-cousin marriage] but agricultural).

        To be honest, it’s been a long time since I’ve seen a National Geographic, but I wonder if you’re attributing extended families to hunter gatherers whereas clans are associated with agricultural societies.

  • Kabal

    Recursive cousin marriages also lead to low IQ. Thus, the lowered trust associated with higher cousin marriages will also covary with low IQ, and we need to keep that in mind when thinking about the relationship between productivity, trust, and cousin marriages. It may be IQ, not trust, that’s driving the relationship between productivity and cousin marriages.

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  • Philip Goetz

    Many Native Americans on reservations in the southwest are desperately poor because there are very few jobs in those desolate lands. But the people living there are free to leave, and choose the benefits of staying with the tribe over living a prosperous but tribeless life.

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