The institutional economics of filial piety

Somewhat lost in the past few weeks amidst the massive uprisings in the Middle East are two interesting bits of news coming out of China. First, As Tyler Cowen at Marginal Revolution blogs here, a proposal submitted by the Civil Affairs Ministry to the State Council calls for legally mandated visits by adult children to their parents. Parents would be allowed to sue children that fail to make the required visits. The second piece of news relates to promotion procedures within the Chinese Communist Party (CCP): as the Guardian notes here, a CCP county branch in the northern Hebei province rather controversially began to consider filial piety as an additional metric for officials seeking promotion, with interviews of family and relatives being used to assess whether or not officials have neglected their filial duties to their parents.

Both of these news items seem to suggest a resurgence in the concept of filial piety, which has governed Chinese family life and society for millenia. However, they in fact demonstrate the degree to which the institution of filial piety has eroded, and the failure of an alternative institution to emerge. Let use some concepts from economics to help us understand exactly how filial piety affects society today.

First, it is useful to think about parent-child interaction in terms of contracts and property rights. There are two pieces of property for which we must assign ownership here: the decision-making authority over the child, and responsibility for the parent’s livelihood after the child has reached adulthood. With these two variables in mind, it is easy to see that “Eastern” filial piety is essentially a contractual arrangement that: a) confers the parent the decision-making authority over the child and b) assigns the responsibility for the parent’s livelihood upon the adult child. In contrast, we can characterize what we will simply call the “Western” parent-child relationship as an arrangement in which ownership of these two variables belongs to the child rather than the parent, that is, the adult child retains decision-making authority over him- or herself, and the parent must provide for his or her own livelihood even when the child has reached adulthood.

Now let us turn our attention to what types of socioeconomic institutions might arise in conjunction with these basic family-level arrangements. Which arrangement is more conducive to the development of a social safety net? We can think of social safety nets as a form of insurance which allows individuals to pool the risks of providing for themselves after retirement. It is easy to see that under Eastern filial piety, children already serve this role, being obliged to provide for their parents once they reach adulthood. On the other hand, the Western system is provides no such option, and is thus more conducive to the formation of social safety nets.

We now consider the game theoretical implications of the above. What does the institution of filial piety have in common with which side of the road we drive on, or what keyboard layout we use? The answer is that all three represent examples of the coordination game. Consider a simple two-player, two-stategy game. Such a game is termed a coordination game if there exist two pure Nash equilibria, where both players pick the same strategy. Generalized to the many-player, society-level case, which corresponds to the situations we’re considering here, it means that equilibrium exists where all members of a society behave the same way. It never pays to unilaterally behave differently. For example, because an American drives on the right side of the road; it would not be in his or her interest to unilaterally drive on the right side of the road. However, a British person drives on the left side of the road, and faces no incentive to deviate from doing so. Similarly, we have adopted QWERTY as the standard keyboard layout, but we could just as well adopted any other, so long as society collectively chooses to do so at the same time – the key is that no individual faces an incentive to deviate. Moreover, we notice that these social arrangements – right-side driving, QWERTY – are path dependent: once society has adopted one standard, it all but precludes adoption of another.

How is the parent-child relationship characterized by a coordination game? Under Eastern filial piety, aged parents are cared for by their adult children rather than a social safety net. No single parent has the incentive to give up his “rights” over his child. Under the Western system, with the social safety net in place, parents need not rely on children for their livelihoods in old age and thus face less incentive to dominate them. Both equilibria, Eastern and Western, are self-reinforcing.

And thus we have our conclusion. The institution of filial piety, as horrible as it may seem to those who decry the “Tiger Mother” syndrome, is self-reinforcing. No generation has the rational incentive to deviate from this system. The two news stories referenced above point to a society in flux: modernization, urbanization, and globalization has given the younger generation greater capacity to resist parental control and provided them a glimpse of an alternate system with greater individual autonomy in childhood and fewer responsibilities in adulthood. The may even expect the crutch of the social safety net to be in place by the time they reach old age. However, because that crutch does not yet exist, the older generation is fighting back, with the help of a government reluctant to take up the responsibility of providing that crutch. We have not heard the last of filial piety and inter-generational conflict in China yet.

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One Response to The institutional economics of filial piety

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