Inbreeding is when cousins and other close relatives have children together. Most cultures have strong taboos against it, primarily because of the increased risk of birth defects. Genetics experts, however, claim that the risk isn't all it's cracked up to be. Of course, there can be some very serious consequences to inbreeding, particularly when it's sustained over multiple generations.
One example is the sad story of Charles II, the last King of Spain from the House of Habsburg, who lived from 1661 to 1700 and reigned from 1665 onwards. From 1550 onward, not a single outsider married into the Spanish royal line. Cousins married cousins, uncles married nieces, and second cousins married second cousins. All of Charles II's ancestors after 1550 were, in one way or another, descendants of Joanna the Mad and Philip I of Castile.
The result of all this was Charles II, quite possibly the most inbred person in history.
According to an article in the io9.com seb site by Alasdair Wilkins, the fact remains that two cousins with no prior history of inbreeding in the family don't have a much greater risk of birth defects in their children than an unrelated couple, and in fact slightly more distant relatives actually appear to produce healthier offspring than the general population.
You can read more at http://goo.gl/s6bXg
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