“Even in modern times, in most cases husbands and wives
differ in their potential for acquiring property. In separation of
property, husbands and wives owning property and dealing with each other
will be in the same position as unmarried adults.
There are, however, grounds for distinguishing marital property
questions from ordinary property questions, because persons who cohabit on a
domestic basis share a common standard of living and usually also the
benefits of each other's property. A major element in many marriages is
the raising of children, and the traditional female role, requiring her
full-time presence in the home, places the married woman at a
disadvantage so far as earning money and acquiring property are concerned. It is
inconsistent of society to encourage a woman to take the domestic role
of wife and mother, with its lower money and property potential, but in
property matters to treat her as if she were a single person. It is
also inconsistent to place upon the husband the sole responsibility for
maintaining his wife and children, if his wife has regular employment
outside the home. When the marriage is dissolved, if the wife has not been
regularly employed and now enters the labour market on a full-time
basis, she may be at a considerable disadvantage as far as salary and
pension rights are concerned.?
(Encyclopaedia Britannica, 1997 Edition).
When a man and a woman dissolve a marriage, matters of common
matrimonial property are settled by dividing the property accumulated by one or
both of them during the marriage ?between them. How the property is
divided depends on the law prevailing in the territory and upon the (non)
existence of a prenuptial contract.
The question is exceedingly intricate from the legal point of view and
requires a kind and breadth of expertise that far exceeds anything this
author has to offer. It is the economic angle that is intriguing.
Divorce in modern days constitutes one of the biggest transfers of wealth in
the annals of Mankind. Amounts of cash and assets which dwarf anything
OPEC enjoyed in its heyday ?pass between spouses yearly. Most of the
beneficiaries are women. Because the earning power of men is almost
double that of women (depending on the country) ?most of the wealth
accumulated by any couple is directly attributable to the husband’s income. A
divorce, therefore, constitutes a transfer of part of the husband’s
wealth to his wife. Because the disparities that accumulate over years of
income differentials are great ?the wealth transferred is enormous.
A husband that makes an average of 40,000 USD annually throughout his
working years ?is likely to save 7,000 USD annually (or close to
300,000 USD in 20 years in the career path ?with accumulated returns and
assuming no appreciation in the prices of assets). His wife stands to
receive 150,000 USD of these savings if the marriage is dissolved after 20
years. Had she started to work together with her husband and continued
to do so for 20 years as well ?on average, she will have earned 60% of
his income. Assuming an identical savings rate for her, she would have
saved only 120,000 USD and her husband would be entitled to 60,000 USD
of it. Thus, a net transfer of 90,000 USD from husband to wife is the
likely outcome of the divorce of this very representative couple. An
average of 45% of the couples in the Western hemisphere end up divorcing.
A back-of-envelope calculation can demonstrate the monstrous magnitude
of this phenomenon. Divorce is, by and large, the most powerful re-!
distributive mechanism in modern society. Women belong to an
economically underprivileged class, are still highly dependent on systems of
patronage and, therefore, are the great beneficiaries of any social,
progressive, mechanisms of redistribution. Taxes, social security, other
social unilateral transfers, single parent benefits ?all accrue mostly to
them. The same goes for the “divorce dividend??the economic windfall
profit which is the result of a reasonably standard divorce.
But economic players are assumed to be rational. Why would a man enter
such a transaction with his eyes peeled ? Who would give up 90,000 USD
for no apparent economic benefits ? Dividing the matrimonial property
in the above mentioned illustrative case is the equivalent of a monthly
cash transfer of 300 constant USD from the husband to the wife. What is
this payment for ? Presumably, for services rendered in the house, in
child rearing, as a companion and in the conjugal bed. This must be the
residual value of these services to the man after discounting services
that he provides to the woman (including rent for the use of his excess
property, sexual services, protection, companionship to the extent that
he can provide it, etc.). This is also the marginal value added of
these services. It is safe to say that the services that the woman renders
to the man exceed in value the value of the services that are provided
her by him ?by at least the amount of 300 constant USD per month!
. This excess value is accumulated in the form of property accruing to
the woman upon divorce. This is also an unusual economic incentive to
adopt this course of action.
But this does only little sense. Children are an economic liability ?
not a revenue generating asset, but one that absorbs income and converts
it to property outside the ownership, control and pleasure of both
members of the couple. Every dollar invested in an offspring’s education ?
is accumulated as an asset by the child, an asset, which is left out of
the control of both husband and wife. Why should the man stimulate the
woman (by providing her with a 300 constant USD a month incentive in
the form of property) to bring children to the world, raise them and
provide them with a disproportionate portion of her scarce resources ? The
children compete with their father on these scarce resources ?for
which only the father pays ! Here is an economic Oedipus complex for you.
When the woman maintains the house, she preserves its value for both
members of the couple. When she prepares dinner for her mate or engages in
lively talk or (more or less) livelier sex ?these are services r!
endered for which the male is liable to pay, one way or the other. But
when she raises children -–this both reduces the quality of services
that the man can expect to receive ?and puts their resources to an
economically unproductive use (by transferring them to another, not a member
of the partnership).
There is only one plausible explanation : an investment is made in the
present in order to reap its rewards (its returns) in the future. There
is an hidden expectation that the investment will be richly rewarded,
that is, that it will provide reasonable returns. Indeed, in the not too
distant past, children used to support their parents financially,
cohabitate, or pay for their prolonged stay in convalescence centres and old
age homes. Parents regarded their children as the living equivalent of
an annuity. “When I grow old??they would say ?“my children will
support me and I will not be left alone.?Such an economic arrangement is
also commonly agreed with insurance companies, pension funds and other
savings institutions : invest now, reap a monthly cheque later in life.
This is the essence of social security. Children were an elaborate
Today, things have changed. Higher mobility and the deterioration in
familial loyalty (actually, in the very concept of a Family) rendered
this equation dubious. No parent can rely on future financial support from
his children. That would constitute wishful thinking and an imprudent
If this is true, we should be able to discern a rise in the number of
divorces coupled with a decline in the importance of the existence of
children as divorce-deterrents. Both are visible. It seems that, contrary
to a widespread misconception, children play no statistically
significant role in preserving marriages. People divorce despite them. And the
divorce rate is skyrocketing, as is common knowledge.
Another prediction : the less economically valuable the services
rendered by the woman and the more her earning power increases ?the more the
monthly transfer from man to woman is likely to be eroded and becomes
less and less significant. The more impetus will be given to prenuptial
property contracts, and to separation of acquests and other forms of
matrimonial property. Women will try to keep all their income to
themselves and not involve it in the matrimonial property. Men will prefer this
arrangement as well, because they will feel that they are not getting
services from their wives to an extent sufficient to justify a regular
monthly redistribution of their common wealth in her favour. As the
economic basis for marriage is corroded ?so will marriage itself flounder
until it changes irrecognizably and assumes an essentially non-economic
form, devoid of most of the financial calculations of yore.
Additional articles on economics and finance here:
Sam Vaknin has a combined doctorate in Physics and Philosophy.
He is an economic and political columnist in many periodicals in a few
countries and a published and awarded author of short fiction and
books in Hebrew, English and Macedonian in Israel, Macedonia and the
He has collaborated with Israeli psychologists and criminologists in
study of personality disorders and is the author of "Malignant Self
Narcissism Revisited" (available from Book Institute of Mental Health -
BIMH - and from Barnes and Noble
and, as an e-book, from BIMH, Booklocker, eBooksonthe.net, SoftLock,
MightyWords and from CyberRead).
He is the editor of the Mental Health Disorders category in the Open
Directory Project and the editor of the Narcissistic Personality
topic in Suite101 and Go.com.
He is serving currently as the Economic Advisor to the Government of
His new book "After the Rain - How the West Lost the East" is available
Barnes and Noble and, as an e-book, from Booklocker, eBooksonthe.net,
MightyWords, SoftLock and from CyberRead.
Submitted by: Sam Vaknin *
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