Mises Wire

Don’t Blame Capitalism for the Decline of the Extended Family

A common myth about capitalism — and its associated ideology, (classical) liberalism — is that capitalism and liberalism somehow “force” people to prefer consumption and profit maximization above all other value systems.

This idea remains common among left-wing critics of liberalism like George Monbiot who maintains that liberalism essentially brainwashes people into abandoning their own families and communities in order to attain an unattainable ideal of “individualism.”

Traditionalist conservatives have also long criticized capitalism and liberalism for supposedly substituting markets for family relations and cultural cohesion. The “free market,” we’re told, “is incompatible with traditional forms of life and leads to a culture of anomic individualism, family disintegration, and social upheaval.”

Is Capitalism Anti-Family?

One result of this market-fueled “family disintegration” is allegedly a decline in the extended family. This trend has been observed in many Western nations over the past century, although recent surveys suggest a limited resurgence.

How this mechanism of disintegration works has always been somewhat murky, but the idea that there’s a connection to capitalism goes back at least to Max Weber who “believed that the extended family stifled economic development because it put the group before the individual.” According to anthropologist Alan MacFarlane:

Weber suggested that one of the central causes of the emergence of capitalism and its associated features was the disappearance of extended family structures. He saw the ‘de-familization of society’, as breaking the link between the social and the economic spheres, and hence as ‘freeing’ the market and the individual.

Thus, in order to pave the way for capitalism, liberalism must emphasize the need to leave “excessive” family ties behind.  An casual look at the last century would make such ideas seem plausible. In modern times, of course we can point to high divorce rates, low marriage rates falling fertility rates, and low extended-family formation. Moreover, all of this comes after a solid two centuries of industrialization and growth in markets. 

On the other hand, how can we prove this is all due to liberalism and capitalism? How do we know it is not due to, say, the decline of religious devotion or the rise of easy contraception? Or is all that to be blamed on capitalism as well — even though capitalists, presumably, ought to want higher fertility so as to guarantee more overall consumption and more laborers? Correlation in these cases hardly proves causation.

Nevertheless, the idea of capitalism-as-homewrecker persists because of the enduring popularity of economic determinism. It is assumed that individuals are more or less automatons who must maximize material consumption in the marketplace if told to do so by advertisements. They are assumed to prefer maximum material consumption over the psychic profit of a more tranquil family life or a less expensive lifestyle.

In this way of thinking then, human beings devalue relationships with — and support for — “non-productive” family members who might otherwise have been welcomed into the home as part of an extended family. This might include both elderly members with declining productivity, as well as younger members who have yet to realize much earning potential. This must be avoided because extending the family unit could result in lower overall per-capita income within the family unit, and material consumption is assumed to be prized above all else. Moreover, if consumption can be maximized by physically moving away from family, then this must be done as well.

The end result is fewer extended family groups and increased “individualism,” just as Max Weber might have predicted.

But is this always the actual historical experience? Some examples suggest it is not. Both historically, and in our own time, we can point to examples of groups within the market economy which valued family ties at increased levels. Although these groups functioned quite well within the market system, they also embraced the extended family in ways that the economic determinists would have us believe are impossible.

The Extended Family Was Not As Popular As You Think it Was

One of the first difficulties we encounter with the popular version of history is the assumption that prior to industrialization and liberalism, extended families were the norm. This, however, is certainly not the case everywhere. In a lengthy study on the extended family in the US and England, for example, Steven Ruggles found that family data from a variety of English settlements showed the prevalence of extended families to range from seven percent to nine percent. An influential study by Peter Laslett found “between 1574 and 1821 ...  an average of just 10.1% [of households] included extended kin.” Laslett further concluded that northeastern Europe “had an unusual family formation system of nuclear families, late marriage, and high domestic service.”1 In other words, at least  in some places in Europe, the extended non-nuclear families did not appear to be the dominant model.

Later historians contend the prevalence of multigenerational living was considerably more common than a mere ten percent — although certainly not a majority. But while historians continue to debate the full extent to which nuclear families existed, it appears the nuclear family was at least very common as a family type well before industrialization.2

A rudimentary consideration of demographic factors in pre-industrial Europe might help illustrate why extended families would be less common than is often assumed. Shorter life spans in pre-industrial times meant there were fewer elderly relatives to take in. Secondly, if one child took in, say, a widowed mother, this would relieve other siblings of the responsibility. After all, even in an age of high infant and child mortality, married couples often raised more than one child to marrying age. Elderly relatives rarely lived with more than one family headed by one of their children.

A similar dynamic would be true when children of land-owning (or business-owning) parents remained in the family home after marriage so as to inherit the family estate. In pre-industrial times, in areas that employed primogeniture, the estate would commonly be inherited only by the eldest son, and this left other siblings to live on their own. This so-called “stem family” structure does assume some “coresidence” with elderly parents, but other siblings would move away with their families in this model.3

It is true that outside of Western Europe, many kin groups employed large, complex family arrangements consisting of multiple married couples, children, siblings, and parents. In Western Europe, however, even before industrialization, this does not appear to have been nearly as common, and it is difficult to see how capitalism can be “blamed” for an apparent propensity for forming nuclear families in this period.

The Rise of the Extended Family in Victorian Times

“Sure,” you might say, “some parts of Europe started out with few extended families. But surely the rise of capitalism made the extended family even more rare.”

This does not appear to be necessarily true either.

As Ruggles shows, the plumb line story about industrialization and family doesn’t hold up. The more traditional theory

assert[s] that economic development is associated with a shift from extended to nuclear family structure. We now know that the opposite shift took place in the nineteenth century: the frequency of extended families increased during a period of rapid industrialization and modernization.

Nor can the persistence of extended family arrangements be explained by a more rural-based population:

Neither urban development nor manufacturing was significantly associated with separate residence of the elderly. In fact, when we control for other characteristics, urban elderly in 1910 were significantly more likely to reside with kin than elderly in rural areas.4

It should also be noted that the Victorian age was an age of rising consumerism. Ann Douglas, for example, contends in her cultural history of the Victorians, the United States underwent “a momentous shift from a productive to a consumer economy in the decades between 1860 and 1890. Certainly, this was the period which witnessed the first prodigious growth in advertising.”

The trend began even earlier in Western Europe, with “Early symptoms of consumerism’s intensification emerging before 1850.”

In spite of this, Ruggles’s research suggests the “percentage of households containing extended kin” doubled from 1750 to 1850, and then began to decline by the early twentieth century.


In other words, the Victorian period was a period of growing extended families while incomes, industrialization, and consumerism were all growing as well.

The rise in extended families was partly due to a rise in the number of available elderly, thanks to a rising life expectancy.

But Ruggles concludes demographics alone can’t explain why the number of extended families increased. If it did, we wouldn’t see the twentieth century’s decline in the extended family, even though life expectancy continued to increase. Cultural factors are the key to understanding the situation, because

Victorians held views about the family very different from those of their forebears in the eighteenth century. ... bourgeois respectability required that needy close relatives be maintained, even if they were an economic liability.

That is, Victorian ideas about the importance of family shaped their views of consumption and markets at least as much as markets shaped the Victorians’ views of family.

Not Everything Can Be Explained by Economics

Ruggles notes those who had higher incomes and more ability to consume were more likely to be part of an extended-family household: “Extended families were far more common among the bourgeoisie than they were among the industrial working class.” Working class families, meanwhile, less frequently formed themselves into extended families. Many observers of family structure often assume that extended families are a result of economic scarcity and deprivation. But a competing theory suggests extended families form as a result of relative abundance — because households can afford to support elderly members or grown children.

Both can be true simultaneously. But whatever the motivation, experience suggests that families have been found adopting an extended-family structure while also living and prospering within a largely capitalist economy.

This lack of an obvious economic explanation for family structure can also be found in modern data on the extended household.

In his article “Racial and Ethnic Differences in Extended Family Households,” Yoshinori Kamo notes that modern-day Asian-American households form themselves into extended families more commonly than do non-Hispanic whites. Kamo found more than 21 percent of Asian-American households (according to the 1990 Census) were extended-family households. Meanwhile, only 9 percent of non-Hispanic white households were the same.


This can’t be explained as a mere response to economic need, and it contradicts pat Weberian ideas that families most devoted to “individualism” will be better adapted to capitalism. In the study’s dataset, Asian-American nuclear families had higher median family incomes ($41,294) than non-Hispanic whites ($37,146). That is, Asian-Americans were forming extended families more than twice as often as non-Hispanic white households, even though Asian-American nuclear households were less economically needy. Moreover,  household income for all household types of Asian-Americans were higher than all other ethnic groupings.

In the cases of both the Victorians and modern-day Asian Americans, it appears that certain value systems contradict the idea that a nuclear family is essential to the equation of economic success  in a capitalist system. The persistence of an extended family in both cases also suggests that families do not blindly respond to “the market” by abandoning models of family life perceived as unnecessary or counterproductive by critics and boosters of capitalism.

In fact, in her 2005 book The Household and the Making of History: A Subversive View of the Western Past, Mary S. Hartman notes that it’s not capitalism that induces people to marry later, have smaller families, or live in nuclear-family units. All those tendencies existed in northwestern Europe centuries before industrialization began. She concludes these peculiar habits of family paved the way for capitalism — not the other way around.

Critics of capitalism and liberals often accuse the liberals of reducing everything to an economic question, but by turning the family into a mere byproduct of economic systems, it is the anti-capitalists who display an inordinate desire to make everything into a function of economics. A more thorough look reveals  that our current view of family life in the West may be the legacy of medieval habits which can hardly be blamed primarily on the “free market.”

  • 1For a summary of the research on family structure, see “The Future of Historical Family Demography.” by Steven Ruggles. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3740453/#R39
  • 2In his 1998 article “Family Ties in Western Europe: Persistent Contrasts,” David Sven Reher contends “family ties” were especially weak in northern and western Europe, noting: “From at least the latter part of the Middle Ages until the second half of the nine-teenth century or the early years of this century, it was common in rural England for young adults to leave their parental households to work asagricultural servants in other households for a prolonged period. Servants might go to households of higher social and economic standing, although servant exchange among households of the same social status was wide-spread. In other words, it was common for a farmer to send his son out asan agricultural servant on a farm, say, in the neighboring village, while he took other young servants into his own household as agricultural laborers. (http://u.demog.berkeley.edu/~jrw/Biblio/Eprints/PDR/pdr24_2.pdf)
  • 3Ruggles concludes that Western Europeans did not avoid all non-nuclear family types. They have, however, avoided the “joint family.” When Western Europeans employ a non-nuclear family type it is usually of teh “stem family” variety. See: “Stem Families and Joint Families in Comparative Historical Perspective.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3057610/
  • 4Ruggles, R. “The Transformation of American Family Structure.” http://users.hist.umn.edu/~ruggles/Articles/AHR.pdf
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