Free Loading on Larger Families

This article is one of the most insightful articles I have read on the fertility crisis in the West. It comes at it from another angle which is seldom talked about among the chattering classes, but whose impact, in my opinion, is going to fall like a tonne of bricks on Western economies in the coming 2 decades. Like everything these days, it’s all about money and sex and the abuse and manipulation of both.

I encourage everyone to read the entire article. It is excellent.

Just for the record, I am not against pensions per se, but I am against relying on the pension system when it is used to excuse the necessity of large families.

Here are some excerpts from the article with my comments interspersed.

As everyone knows, fertility rates have been declining rapidly since early in the 20th century. In many countries, total fertility rates are far below replacement rates. At current speed, the once-great nations of Germany and Italy will be reduced to half in just about 50 years.

Thank you for your contributions to Western civilization, Mr. Secularism and Mr. Condom.

There are various explanations of what is behind such a rapid change. According to recent research in economics, the most important reason is surprising yet mundane: fertility decline
is the result of misguided pension policies. Public pay-as-you-go pension systems have discouraged fertility by replacing the traditional family system and penalising those who raise
more children.

Great. So we sold out our posterity for the CPP. Boy, we sure made a good investment there, huh? Everyone knows that liberalism tries valiantly to make it very difficult for a MAN AND WOMAN (note the opposite nature of the sexes) to have children. It does this through big government and even a bigger tax system which is geared toward childless or near-childless couples. If you can’t afford to raise children, then you’ll have to put away some money for your retirement and the eventual “fade-to-black” because you’ll have no one to care for you in your old age. Some stranger at a nursing home will change your soiled diaper…and eventually pull the plug (whether you object or not) when you’re becoming just a little too inconvenient. As I have always said, the greatest epidemic of the early twenty-first century will be loneliness…and we have, as this article has plainly shown, bought into it hook, line, and sinker.

Pension systems come in various sizes and shapes, but the most common type of governmental system is the pay-as-you-go (PAYGO) arrangement. It means that current workers pay contributions from their salaries, and this money is distributed among current retirees. In other words, pensions are financed by way of intergenerational transfers. This system was invented in Bismarck’s Germany, from which it spread to various other countries in the first half of the 20th century.

Bad in theory and worse in practice once you don’t have the workforce. And you won’t have the workforce when you don’t have the children.

When there is no compulsory PAYGO pension system, people have children not just for the fun for it, but also because children provide security in old age. The old-age security motive for fertility was clear in the developed world before the 20th century, and it continues to be so in less developed countries (LDCs) today.

And that is why, as Jesus said, “The first will be last and the last will be first.”

The traditional family is actually a kind of private PAYGO scheme. Parents procreate, nurture and educate their children, and in return children look after their elderly parents once they can no longer provide for themselves. This is the common pattern across LDCs even in times of urbanisation and when children travel abroad to work or study.

This is the most logical, humane, dignified and natural way to run a society. Much better than having oodles of money (and likely not even that the way this society spends) and being very lonely as your time to check out approaches.

From the point of view of fertility, a compulsory pension scheme externalises the value of children (or, to be more precise, a portion of their productivity). Children can no longer support their parents in old age, because a chunk of their salary is forcefully taken away from them and distributed to the entire population of retirees. That chunk is growing systematically, because governmental pension schemes are heading towards insolvency due to, among other things, low fertility rates.

Kinda like a dog chasing its tail. When the taxes go through the roof because we have too many old people to support, guess what we’ll do to the old people? After all, if it’s a choice between paying 50% of your income to the government and encouraging “voluntary” termination, which do you think this wicked culture is going to choose? Probably the latter, but we’ll likely get both. Your taxes are going up in any case. Ask yourself if the up and coming generations of seniors are not going to demand “their fair share”. After all, they paid in so they want their dough. And since they will be well over 33% of the population, the political parties will listen.

Now, such socialised generosity sounds nice. Unfortunately, it wreaks havoc on social structures and private incentives. Individual parents no longer retain the economic benefit of having children, but they must still bear the bulk of the costs in terms of time and money spent. Everyone receives the same pension rights regardless of how many children they had, if any. Many are tempted to take a free-ride on the children of others.

“Many are tempted to take a free-ride on the children of others.” Best line of the article that sums up the whole situation, in my opinion.

In other words, the welfare state becomes a “forced family” that replaces the traditional family as a provider of social insurance. It is not only an alternative to the traditional family, but an option one is not allowed to refuse. Undoubtedly it provides some benefits, but it lacks the sense of common goals and reciprocity which is essential to real families. Because the participants in the welfare state system do not know each other and have no regular dealings with each other, there is a strong temptation to seek to maximise private benefits. Hence the free-riding problem.

Kinda like contraception: some benefits but it isn’t real sex. It’s a fraud. In the case of pension support, it acts like a surrogate family, but only comes in the form of money.

The role of families in providing old-age security was, as a matter of fact, commonplace in 19th century Europe. When Bismarck set up the first public pension scheme in the world, his aim was precisely to create a substitute for the family. Whatever his motives for such a move, he succeeded very well indeed. Before Bismarck, Germany had one of the highest fertility rates in all of Europe. Now, its total fertility rate is below 1.4.

Doesn’t that bit o’ information just say it all? It’s like the apple in the Garden of Eden, promising life, it only gives death.

Moreover, as things are going now, the once-great nations of Germany and Italy will be reduced
to a half in size in little more than 50 years. Their pension systems can perhaps be kept running by allowing mass immigration from Middle East and North Africa, but after that not much would be left of their cultures. Mass immigration is a poor solution to the pensions problem for other reasons too, because it tends to create issues even more difficult to resolve.
Oh yes, but that has been the staple tactic of liberal governments in the West for decades. Hundreds of thousands of immigrants every year to bandaid a decaying system. Well, the numbers are going to soon dry up and the culture left behind will be anything but “harmonious”. The jig is up soon, lads.An easier solution may be available. Pension rights could be linked to fertility choices in such a way that those who raise more children are compensated for it. Thus having children would be given its aspect of “investment” in old-age security. Those who have few or no children would have to save more privately. This would be fairer to all participants, and the system would be more sustainable in the longer term.

Precisely. A civilization needs children of its own heritage to build up prosperous and well-adjusted nations with its own culture and social beliefs kept in tact. One way to do this is to adjust the pension and the tax system to recognize the inestimatable value of large families to the nation for parents who choose to bear the sacrifice. If parents choose the hard road, the State has an obligation and indeed a critical vested interest – for not only for the benefit of its citizens but also for its long term survival – to ensure a fair and equitable economic climate for that family to live in. It is extremely short-sighted to believe that the State’s interest is somehow unrelated to the condition of the natural family. If the State does not recognize its duty to support the family, demographic and social upheaval and possible internal collapse are the sad inevitability.

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