ROME, November 7, 2011 ( – What most secular pundits, politicians, lobbyists, bankers and the public do not understand about the growing economic crisis in Europe and the rest of the western world, is its intimate relationship with the west’s anti-life and anti-family policies, a prominent author on economics has told

John Medaille, author, businessman, lecturer and instructor in theology at the University of Dallas, told that “life issues…underlie all economic issues” and that understanding this is crucial to understanding the nature of the global crisis.

The growth of the state, the monopoly of ownership of the world’s resources by huge corporations, the dependency of ordinary citizens on the state, and unimaginably huge, insoluble debt both of governments and private citizens, are the result of the erosion of protections for the family as the base unit of society, he said.


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Medaille is the author of The Vocation of Business, and Toward a Truly Free Market: A Distributist Perspective on the Role of Government, Taxes, Health Care, Deficits, and More.

The author said that the connection between the deterioration of the family and the economic crisis can be most easily observed in the collapse of the housing market. “During the boom,” Medaille said, “we constructed 1.6 million units, but formed only 1.2 million households.”

“Obviously, the demand for housing is driven by household formation. And many of the households that were formed were of the type that can be easily dissolved or consolidated: single persons, with or without children, and co-habitating couples.”

Economics is not a mystical gnosis comprehensible only to a few initiates, he said. It is based on people and their needs. Simply put, the population growth of most economically advanced countries is stagnant, with legal abortion and contraception putting overall fertility rates remaining well below replacement level. And when there are fewer people, broken families and less marriage, there is naturally less economic stability, less demand for goods and services, and less ability to produce them.

“Beneath economics,” Medaille explained, “there are five things: demographics, land ownership, natural resources, labor, and money – how it is created and destroyed.

“Deterioration in any of these leads to deterioration in all of them.”

The mistake modern governments are making, he said, is replacing, or displacing, functions that had previously been performed in the family. The entire drift towards increasing state intervention in family life is a result of the weakening of family structures. Without these, Medaille says, the government had little choice but to intervene. “But at some point,” he said, the massively indebted state “can no longer fulfil its promises.” 

“Take social security. Throughout history, this would mean one of two things: you had a lot of money or you had a lot of children. Since most didn’t have the former, they needed to have the latter. Care of the family was spread across generations, with each providing something. The relations between the generations were mediated in a natural way, and there was a limit to what the old could ask of the young (and vice-versa).

“But when the state becomes the mediating factor, these limits are removed and the demands increase. The real winners in social security are those who had few children or none. They rely on other people’s children to pay taxes, but avoided all the costs (and heartaches) of rearing children themselves.”

The idea of a “living wage” is another lost concept in modern economies, which was originally based on the real needs of real people living in the context of a family.

“As the family ceased to be a centre of production itself, more income was in wages. But when one outside wage is insufficient to support a family, or the family was taught (though advertising and other cultural means) to multiply its desires beyond what even a decent wage could support, women found it necessary to work outside the home. But the work of the home still had to be done. So restaurants, child care, household services, etc., expanded. These are expensive, and many families turned to the state for aid.”

The result, he explained, is a welfare state where the population, even when it is not directly receiving state benefits, is wholly dependent on the state to maintain an artificially high standard of living. And while financial demands on the family experience natural limits, there is no such limit when the state has replaced the family as the base unit of the economy. Eventually, the strain of these demands outstrips the ability of the state to provide.

The situation has been accelerated by Europe’s longstanding cradle-to-grave welfare systems, and the result appears to be an inescapable spiral towards economic and social chaos. While the EU casts desperately about for countries willing to contribute to its multi-billion-Euro bailout plans, and the population continues to expect massive public social programs, public bafflement is growing at EU policies of ever-increasing state debt.

Daniel Hannan, a Tory and euroskeptic Member of the European Parliament, writing in this weekend’s Sunday Telegraph summed up public opinion across Europe, saying people “don’t understand why the EU is accelerating all the policies which created the crisis in the first place”

Summarizing much of popular opinion throughout Europe, Hannan wrote, “They don’t understand why Brussels is treating a debt crisis with more debt. They don’t understand how Greece is helped by having more loans thrust upon it.

“They don’t understand why the interests of Europe’s peoples are being sacrificed for the sake of keeping the euro together. They don’t understand why the EU is accelerating all the policies which created the crisis in the first place.”

According to Medaille, the crisis of the Euro is in fact a good example of the problem of replacing concrete human realities with ideologies as the foundation of modern economies.

“A currency expresses an economy, but Europe doesn’t have one economy, but many. And treating Greece like Germany offered short-term benefits to both, at the cost of long-term stability. We are in the long-term, and there is no way now to stabilize things.”

In Europe public bafflement is turning to anger as the Euro and possibly even the entire “European project” – that of creating on giant superstate – appears to be tottering.

In Britain David Cameron’s coalition government is under threat as demands grow both from the public and his own cabinet for a referendum on EU membership, a key campaign promise that Cameron reneged on within weeks of becoming Prime Minister. Cameron was confronted this week by cabinet ministers angry over a potential £40 billion bill to rescue the Euro.

The German public is also objecting vociferously to their taxes going to bolster what is seen to be reckless and profligate Mediterranean governments, while Ireland’s recently booming economy is reeling under the strain of billions of Euros of debt imposed by the International Monetary Fund and the EU.

EU leaders are desperately seeking financial aid, even from second and third tier economies like Brazil, South Africa and Russia. China appears to have flatly refused requests for aid, with the Xinhua official news agency saying in an editorial, “China can neither take up the role as a savior to the Europeans, nor provide a ‘cure’ for the European malaise. Obviously, it is up to the European countries themselves to tackle their financial problems.”

To read more about Distributism as an alternate solution to economic globalism: The Distributist Review