Two Libertarian Families

Some years ago I came across an article by Gertrude Fremling, an economist married to my friend John Lott, on how they had brought up their children.¹ It was much closer to the approach I favor in other contexts than the way we did it. Their kids had no allowance, lots of opportunities to earn money by doing chores within their ability. Interactions between kids were carried out largely on a market basis, with one child sometimes renting the use of a game he had bought with his own money to another. If too many kids wanted to do the same chore, the parents would auction it off to the one willing to do it at the lowest price; if no kid wanted to do it, the auction price might go up instead of down. Gertrude commented, whether with disappointment was not clear, on the "perhaps surprising..." failure of the kids to engage in bidding conspiracies against their parents.

We had almost none of that. Our kids had an allowance provided by a great-uncle fond of kids. We often but not always bought them things they wanted. Our daughter eventually offered to volunteer to do a regular chore, unloading the dishwasher, and her brother, much later, to take out the trash, but that was their choice and they were not paid. We had organized our tiny economy like communists, John and Gertrude theirs like capitalists.

All of us were libertarians but their system was at least mildly paternalistic since it included limits on TV watching and "silly video/computer games." We had no television² — a more extreme version of their policy of having only a small screen one — but the kids had unlimited use of computers when available and could play any games they liked as much as they liked. The one exception was when our very young son, running short of disk space on the computer he shared with his older sister, solved the problem by throwing out various things, including parts of the operating system. For some time thereafter he was only allowed to use the computer with his sister monitoring, which she had no obligation to do.

We had strong rules of private property, largely enforced by our daughter, who established early on that her brother was not permitted in her room without her permission. The sign to that effect remained on her door through adulthood. Although it is no longer visible he still respects it. As do we

.Were there any obvious reasons for the differences in our child-rearing strategies? One is that we had two children, they had five; the advantages of decentralized market decision making are typically greater the larger the number of people being coordinated. Another is that they had their children younger than we did and were under greater financial pressure as a result. Imposing market discipline on children is more convincing when money is tight; a policy of "I won't buy that for you even though you really want it; you have to earn the money yourself" feels artificial, to the parent and perhaps even to the child, when the cost of everything the child wants is insignificant in terms of the parents' income. That is one respect in which World of Warcraft is a better way of teaching the same lessons to the children of well-off parents; the game is a fiction but the budget constraint is real.

When I discussed the difference between our approaches on my blog, one of Gertrude’s children commented that “There were times when I wished my family operated more communally,” and one of mine “cool as your system sounds (at least the part with no allowance and chores instead - seriously, I would have liked that) …”

Discussing it recently with my now adult son, he suggested that one reason for the difference was that John and Gertrude are more organized than we are. Running a miniature market system within the family would have been more trouble for us than it was worth.

Reminding me of Kipling on a different subject:

"There are nine and sixty ways of constructing tribal lays,

"And—every—single—one—of—them—is—right!"³

It reminds me also of the central point of the article by Ronald Coase on which the modern theory of the firm is based:⁴There are costs to coordination by central control, there are costs to coordination by exchange on the market, and neither approach is always superior.

1. One of whom now has his own Substack. Those who know him may share my puzzlement of how his parents, when he was born, already knew what name would fit him. I suspect black magic.

2. Aside from, early on, an old one kept in a closet to be brought out for use of the son of my first marriage when he visited. Our older child was five when we moved to California and left it behind.

3. Rudyard Kipling, “In the Neolithic Age.”

4. Ronald Coase, “The Nature of the Firm,” Economica, New Series, Vol. 4, No. 16. (Nov., 1937), pp. 386-405.