The rationale of the family

Author

Jason Collins

Published

December 22, 2012

John Kay writes:

A narrow focus is characteristic of scientific method but gets in the way of understanding social phenomena. …

The economists who argue that the rationale of the family is found in cost savings have a point. Two together can live more cheaply than two separately, if not as cheaply as one. But anyone who thinks the quest for scale economies is the primary explanation of the human desire for family life is strangely deficient in observational capacity, as well as common sense.

The “economics of the family” is a prime example of an economic imperialism that seeks to account for all behaviour through a distorted concept of rationality, an extreme example of economists’ notorious physics envy.

Rationality is a powerful tool in the economic toolkit, and the lens of natural selection is a powerful rationalising agent. But what is the objective we are rationally trying to achieve in forming a family? Likely not the minimisation of costs. And what powers do we have to achieve that objective? Not perfect foresight and calculating ability. The application of economic tools with an understanding of the agent’s objectives and the bounded nature of human rationality is the more fruitful exercise.