This article is about England family set up and how this is related to the economy. This is an economy which is market oriented, and capitalistic in nature. England has unusually small families. Her family structure explains how family owned businesses are run in England. Family firms in England are managed by individuals. The writer claims that small families set up in England need civil society more as they need markets and commercial services.
Additionally, small families are ideal for capitalistic economies as they are open and market facing. They are associated with high GDP. The writer asserts that economies with small families have GDP per capita of around €5,000 which is higher than that of regions with extended and egalitarian families. Family is one of the topics learnt in sociology. A small family is usually preferred due to economic advantages accompanied with it. It is easy to sustain and provide for. Most developed countries prefer small nuclear families.
Usually as a country employs policy aimed at keeping population down through encouraging small family sizes. Small families are positively associated with good economic performance. They also affect business ownership and management. Borrowing from this article, encouraging small families will benefit the society at large. I never knew that the family structures in the society affect performance of the businesses and the economy. I thought it is through management and good governance economy will grow-family sizes plays a big role
This article could have discussed the optimal family size and specify how many members should a small family constitute. It could have also discussed the negative effects of small families both in the social relationships and economic performance. There is a lively debate across Europe about what is happening to our families. And there is the endless argument about the relative strengths and weaknesses of the Anglo-Saxon economic model. In my new book I try to show the links between the structure of our families and the structure of our economies.
Here is an account of England in the flat language of modern sociology: “The majority of ordinary people in England…are rampant individuals, highly mobile both geographically and socially, economically ‘rational,’ market-oriented and acquisitive, ego-centered in kinship and social life. ” But the quotation is from a description of England in 1250 by Alan Macfarlane, the historian who together with the great French thinker Emmanuel Todd has revealed the significance of family structures. England has had unusually small families, unusually weak local magnates, and unusually free peasants.
It is not just different from Papua New Guinea or Pakistan, it is also quite different from France and Italy and most of continental Europe. This difference was recognized by Montesquieu that shrewd 18th-century French observer of human cultures, who observed: “I too have been a traveller, and have seen the country in the world which is most worth of our curiosity—I mean England. ” Just as aerial photography can reveal the outlines of some long-lost medieval village so, if we know how to look, we can discern deep features of English society that endure to this day.
So for example, we attribute the long-standing weaknesses in the productivity of the British economy to our lack of a “Mittelstand,” the strong medium-sized family businesses of the sort they have in Germany or France. We appear to be good at starting small businesses, and some of our big companies are very strong indeed. It is the high performance, solid, long-term, high-investment medium-sized companies in the middle that we seem to lack.
It is not that we have fewer family owned firms—about 30% of mid-sized British firms are owned by a family, very similar to France and Germany. But we run them differently. England’s family structure helps to explain this. In France, unlike in England, land or a firm are not the freehold property of the individual; instead, they belong to the family’s bloodline with an automatic right of inheritance within the family for all the children. In England, family firms are more likely to be run as the personal property of an individual who often manages the business himself or herself.
In France and Germany, family firms are more likely to be held in common by whole family and seen as long-term property of a dynasty across several generations. As a result, they are more willing to bring in professional managers to run the business on behalf of the family. In France, 31% of family owned firms are run by an external manager as against only 23% in the U. K. (It is 60% in Germany. ) Of firms still owned by the founder, 44% in France are externally managed whereas it is only 14% in the U. K. (Again, it is 60% in Germany.
) This has a big effect on economic performance: If an inherited family firm brings in an outside manager it raises returns by six percentage points, a significant improvement in return on capital. There is no single right family structure. But the Anglo-Saxon model has its advantages, too. Small families need civil society more. But it was not just voluntary societies that provided mutual support. You need markets and commercial services as well. Instead of the mutual exchanges of the extended family, small families must buy services.
If we need something we turn to yellow pages, not to an uncle. For example, insurance schemes, annuities, and savings help protect you when there is no wider family with any such obligation—one reason why England has a long history in financial services. Small nuclear families are open and market-facing, and that drives a particularly dynamic model of capitalism. Even now, when you control for country-level effects, areas of Europe with Anglosphere-style families have GDP per capita of around €5,000 a year higher than regions with extended and egalitarian families.
Indeed, they are higher than all other family forms. Over the past 30 years, they have also outgrown them. These Anglosphere economies are outward-looking and flexible so they are good early adopters of new technologies. But they may not be so good at steady incremental improvements in performance with a given technology. And sometimes, as we have seen with new financial instruments, their sheer restless innovativeness can do catastrophic damage.
Nevertheless, their flexibility can sustain them in the long run: It is very possible that in this coming decade, for the first time, more than half of the economic output of the developed world will be in English-speaking countries. We cannot easily change these fundamentals of our national identities. Indeed we specialize in different activities and structure our economies differently because of them. Vive la difference! —David Willetts is Member of Parliament for Havant. His book, “The Pinch: How the baby boomers took their children’s future and why they should give it back” is published by Atlantic