The opportunity cost of economic prosperity

Andrew Sullivan describes how a growing level of wealth through economic advancement has necessitated the expanded government safety net:

[…] the forces that free market capitalism unleashes are precisely the forces that undermine traditional forms of community and family that once served as a traditional safety net, free from government control.

He links to a NY Times article about this development in South Korea, where the traditional family pact, historically dedicated to the care of elderly parents, has rapidly eroded. With widespread economic success has come increased competitiveness and urbanization – and the elderly have very often been left behind. The result, tragically, has been grim:

[in South Korea] the number of people 65 and older committing suicide [has] nearly quadrupled in recent years, making the country’s rate of such deaths among the highest in the developed world. The epidemic is the counterpoint to the nation’s runaway economic success, which has worn away at the Confucian social contract that formed the bedrock of Korean culture for centuries.

That contract was built on the premise that parents would do almost anything to care for their children — in recent times, depleting their life savings to pay for a good education — and then would end their lives in their children’s care. NoSocial Security system was needed. Nursing homes were rare.

But as South Korea’s hard-charging younger generations joined an exodus from farms to cities in recent decades, or simply found themselves working harder in the hypercompetitive environment that helped drive the nation’s economic miracle, their parents were often left behind. Many elderly people now live out their final years poor, in rural areas with the melancholy feel of ghost towns.

Such social shifts are not uncommon in the industrialized world. But the sudden change has proved especially wrenching in South Korea, where parents view their sacrifices as the equivalent of a pension plan and where those who are suffering are falling victim to changes they themselves helped unleash as they rebuilt the economy from the devastation of the Korean War.

 

 

The turbulence of a growing wealth-creating free market disrupts traditional ways of life like no other. Even in a culture like ours used to relying from its very origins on entrepreneurial spirit, the dislocations are manifold. People have to move; their choices of partners for love and sex multiply; families disaggregate on their own virtual devices; grandparents are assigned to assisted living; second marriages are as familiar as first ones; and whole industries – and all the learned skills that went with them – can just disappear overnight (I think of my own profession as a journalist, but it is one of countless).

Capitalism is in this sense anti-conservative. It is a disruptive, culturally revolutionary force through human society. It has changed the world in three centuries more than at any time in the two hundred millennia that humans have lived on the earth. This must leave – and has surely left – victims behind. Which is why the welfare state emerged. The sheer cruelty of the market, the way it dispenses brutally with inefficiency (i.e. human beings and their jobs), the manner in which it encourages constant travel and communication: these, as Bell noted, are not ways to strengthen existing social norms, buttress the family, allow the civil society to do what it once did: take care of people within smaller familial units according to generational justice and respect. That kind of social order – the ultimate conservative utopia – is inimical to the capitalist enterprise.

Which is why many leaders in the nineteenth and twentieth centuries, conservatives as well as liberals, attached a safety net to such an unsafe, bewildering, constantly shifting web of human demand and supply. They did so in part for humane reasons – but also because they realized that unless capitalismred in tooth and clawwere complemented by some collective cushioning, it would soon fall prey to more revolutionary movements. The safety net was created to save capitalism from itself, not to attack capitalism.

At the heart of Sullivan’s analysis is the concept of opportunity cost. In an era of increased potential for economic prosperity, the value of dedicating individuals’ resources (both financial resources and time) to education, relocation, and work has skyrocketed. As a result, the opportunity cost of those endeavors has skyrocketed. Taking a vacation from work or diverting financial resources for family matters comes at a higher price. For better or worse.

 

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