Feminist Economics Challenges Mainstream Economics
Diane Elson, PhD, Professor, University of Essex (UK) and Senior
Scholar, Levy Economics Institute, Bard College, (USA)
In this presentation I will discuss some of the ways in which
mainstream macroeconomics has been extended by gender
analysis; and some of the ways in which feminist economists, taking
heterodox macroeconomics as a starting point, are seeking to
challenge mainstream macroeconomics.
I want to distinguish between extending the mainstream paradigm
and challenging the mainstream paradigm. The paradigm can be
extended by adding new features, filling in gaps, and replacing
simple assumptions by more complex assumptions. I think that
feminist economics can be more ambitious than that. We can and
should seek to challenge the fundamental assumptions of the
mainstream. And begin to develop alternative forms of analysis and
policy.
I will draw upon the macroeconomics I learned as a student in
Oxford, at St Hilda’s college in the late sixties; a macroeconomics
witch drew inspiration from Keynes, Kalecki, and Marx; and was
grounded in an appreciation of the importance of institutional
context and of history. I would particularly like to salute the women
who taught me macroeconomics at Oxford, especially Nita Watts,
Fellow of St Hilda’s College. I will also draw upon the research of
the International Working Group on Gender and Macroeconomics,
and informal international network of women and men, co-ordinated
by Niluer Vagatay, Cren Grown, Rania Antonopolous, Sergy Floro
and myself. The Group produced two special issues o World
Development (November 1995 and July 2000) and has for the last
two years organized a summer school on gender, macroeconomics,
and international economics at the University of Utah.
I will define the scope of macroeconomics broadly, to consider
analysis that looks at the economy as a whole, as distinct from
microeconomics, which analyses the economic behaviour o
individuals, households and enterprises; and meso economics,
which analyses the operation of mediating institutions such as
markets and state agencies.
Feminist economics has, to date, produced more analysis of the
operations of economies at the micro and meso level. The
programme for the 2004 IAFFE conference contains many more
sessions on micro and meso economics than on macroeconomics.
Nevertheless, there is a growing body of feminist research that has
produced the following critiques of mainstream macroeconomics:



mainstream macroeconomics is gender blind It is based on an
incomplete understanding of how economies work. This
promotes the introduction of policies which disadvantage
women, especially poor women;
macroeconomics should recognise and incorporate the unpaid
domestic work that is vital for social reproduction (the
reproduction of the whole society, including the day-to-day
and intergenerational reproduction of labour power);
macroeconomics should incorporate gender inequality
variables.
Feminist economists have done empirical and conceptual work to
incorporate social reproduction and gender inequality variables in
macroeconomic analysis. So also have some mainstream
economists. I will discuss examples of each.
Mainstream
analysis
macroeconomics
that
incorporate
gender
We learnt in a Conference presentation by Irene van Staveren that
macroeconomists in the Netherlands have incorporated the unpaid
domestic work of caring for family members in the model that is
officially used to analyse macroeconomic policy. They have
modelled the supply and demand for this labour in much the same
way as the supply and demand of paid work, with one important
exception. The performance of unpaid work is assumed to generate
utility for the provider as well as for receiver; but the performance
of paid work is assumed to generate utility only for the receiver.
Irene challenged this on the grounds that both paid and unpaid
work can generate both utility and disutility for the provider; and
there is no good reason to assume that unpaid work uniquely
generates utility for the provider. Because women so often do
unpaid care work out of love, does not mean that they always love
doing it!
Another area in which mainstream economists have engaged with
gender is in the analysis of the determinants and benefits of
economic growth. World Bank economists David Dollar and Roberta
Gatti have run cross-country and time series regressions and come
to the conclusion that growth is food for gender equality and gender
equality is good for growth. In other words, all is for the best in the
best o all possible worlds. But Dollar and Gatti examine only a
restricted range of gender inequality variables, focusing on
education and not on the labour market. This is in line with the
major focus of the World Bank policy advice which argues that
investing in the education of girls promotes benefits for all. World
Bank economists have also incorporated gender into the model of
the small dependent economy that underpins the design o structural
adjustment models. Collier treats gender as a market imperfection
that hinders the reallocation of female labour from the production of
non-tradables to the production of tradables in low-income subSaharan African economies. Gender is in this view a barrier to
successful structural adjustment.
Gender as a market imperfection also provides the theoretical
framework for recent research by Black and Brainard at the US
National Bureau for Economic Research on the impact of
international trade on the gender wage gap in the USA. They find
that import competition has reduced discrimination against women
in the US labour market, a result given considerable prominence by
Jagdish Bhagwati, Professor of Economics at Columbia University, in
his recent book on the benefits of globalisation.
Contrasting examples of feminist macroeconomics
Feminist economics that challenges the mainstream dose not see
gender as just another market imperfection. It takes a more
structuralist view of economies, as incorporating persistent
asymmetries in power and knowledge.
Stephanie Seguino finds no convulsive evidence to support the view
that women do better in countries that grow faster. Moreover, using
cross-country and time series regression analysis she finds evidence
that gender inequalities in the labour market has facilitated
economic growth in semi-industrialised countries. Underpinning this
last result is a more structuralist model in which low female wages
stimulate industrial investment, in a profits-led process of growth.
Sandy Darity offers a different understanding of gender in a lowincome Sub-Saharan African economy. He models gender not as a
market imperfection but as a relation of power which structures how
the agricultural sector responds to structural adjustment. He brings
to light the contradictory interrelation between gender and
structural adjustment. If women have sufficient bargaining power to
resist demands on them to supply more labour to produce export
crops controlled by their husbands, there will be a weak supply
response to structural adjustment policies. If they do not have
sufficient bargaining power and do re-allocate their labour from
locally consumed food crops, which they control, to export crops
which their husbands control, then there is a more elastic supply
response in tradable production, but food security is likely to suffer
and the nutritional status of women and children may deteriorate.
A number of feminist economists have a very different take on
gender wage gaps and globalisation. Ebru Kongar mounts a direct
challenge to the work of Black and Brainard. She acknowledges that
the gender wage gap has narrowed in the USA in the period of
increased import competition, but points to a very different
explanation: not reduction of discrimination against women, but a
process in which import competition has resulted in downward
pressure on male wages, and downward pressure on female
employment in tradables Kongar’s model does not assume that
labour markets clear rapidly and that full employment is the norm.
Gunseli Berik finds that gender wages gaps worsened in South
Korea and Taiwan in the period of expansion of manufactured
exports while improving slightly when there was a contraction of
manufactured exports, due to a decline in male wages.
From the real economy to the capitalist money economy
A limitation of all of the analysis discussed so far, whether
mainstream or feminist, is that it abstracts from the specificities of
capitalist monetary economies. It is grounded in ‘real economy’
models, in which finance is not specifically modelled. It is therefore
of limited help in responding to the challenge issued to me by a
former finance minister of Chile, in the summer of 2002: “I can see
how gender analysis can be useful to Ministers of Education and
Health, and even Ministers of Agriculture and Industry, but I do not
see why it is relevant to Ministers of Finance. It would not have
helped me when I was Minister of Finance”.
To respond to that challenge, one needs to bring finance specifically
into the analysis. Korkut Erturk, Nilufer Cagatay and I have been
working together on ways on doing that. We propose and analysis
based on the interrelation of three domains: finance, production and
social reproduction. All three domains are considered to be ‘bearers
of gender’ in the sense that they are structured through social
relations which are gendered, implicitly, if not explicitly. We propose
an understanding of the macro-economy in terms of the
interrelation of these domains.
In the period of the Keynesian consensus (1950s and 1960s),
production dominated, with social reproduction and finance at the
service of production. This was founded upon heterodox
macroeconomics. It was not assumed that economic agents would
automatically respond to price signals emerging from markets in
ways that produced growth and full employment. International
trade and financial links were managed in the service of the
objectives of full employment and national development. Social
reproduction was articulated to the other domains through systems
of wage determination, social protection social insurance (for the
formal sector); and systems of patronage and clientilism (for the
agricultural and informal sectors); all o which were based on the
assumption what men were the breadwinners and women were
dependent housewives who would carry on doing the necessary
unpaid work without any support from public policy. Feminist
analysis re-emerged towards the end of this period to challenge the
articulations that placed women in a position of dependency.
Ministers of Finance did not see the relevance of this analysis
because they assumed that the unpaid work would be done
regardless of their policies, and their attention focused on the
medium term dynamics of how to maintain the appropriate level of
aggregate demand to ensure full utilization of the capacity of the
paid economy.
Since the mid ‘70s this has been overturned and the Washington
Consensus has emerged, putting finance in the dominant position,
with production at the service of finance and social reproduction at
the service of both. The Washington Consensus assumes that
economic agents will respond to price signals emerging from
markets in ways that produce full employment and growth.
Economic problems are assumed to set mainly from public policies
which distort prices. Thus international trade and finance must be
liberalized. it is recognised that markets may be imperfect and
incomplete, so there is some role for public policy to make markets
perfect and complete.
This has resulted in changes of the articulation of social
reproduction and production, demonstrated in some detail for the
case of Australia in a Conference paper by Ray Broomhill and
Rhonda Sharp. Social reproduction is increasingly articulated to the
other domains through individuals participating in ‘flexible’ labour
and credit markets. However, much of the male breadwinner mode
of articulation persists for poor people. In better-off households
unpaid domestic work has been replaced by paid domestic work,
often done by migrant women. But the system is still heavily reliant
on the unpaid work of women in poor and average households; and
it is still largely assumed that this work will be done regardless of
public policy. Finance Ministers do not see the relevance of gender
analysis because they make this assumption; and because they are
too busy dealing with the very short run dynamics o the domain of
finance, in which large movements of currency can move in and out
of a country overnight.
A feminist alternative would make social reproduction the dominant
domain, with production and finance acting to serve it. The
macroeconomic policy objective would be decent work for all, with
an equal sharing of unpaid work between women and men,
supported by public policy which recognises the importance of this
work. In analysing how to move to this alternative from where we
are no, we argue that feminist macroeconomics will need to build on
and extend heterodox macroeconomics, while challenging neoliberal
macroeconomics.
Heterodox macroeconomics points to intrinsic limits to the ability of
the money mechanism to co-ordinate capital accumulation that set
from within the money mechanism itself, in the context o a
necessarily uncertain world. Feminist heterodox macroeconomics
shares the starting point that monetary contracts are necessarily
incomplete and contradictory; that, to use Polanyi’s language,
money is a fictitious commodity that ultimately rests on non-market
relations for its value. But feminist heterodox macroeconomics also
insists that the domain of social reproduction also constitutes an
unsurpassable limit to the ability of the money mechanism to coordinate capital accumulation.
The fact that social reproduction is not co-ordinated by markets and
is not governed by the profit motive is not the result of purely
contingent problems of missing and imperfect markets that could be
remedies by extending and improving markets. The absence o
markets and the profit motive in this domain is an essential aspect
of the functioning of a capitalist monetary economy. Such an
economy is based on the large scale availability of free labour, both
free from servitude and free from access to the means of
production, except via the sale of labour power. Commercialisation
of the production and nurture of human beings does of course take
place in capitalist economies (surrogate motherhood for cash,
babies for adoption via sale, paid care services) but production of
people on the same basis as the commercial production of chicken,
pigs and cows would call into question the whole operation of a free
labour market and the legitimating myths of capitalist monetary
economies. Polyani went some way to identifying this problem when
he referred to labour as a fictitious commodity. Contracts in a
capitalist money economy are necessarily incomplete nof only
because of the characteristics o the domain of finance, but also
because of the characteristics o the domain of social reproduction.
Moreover the capitalist monetary economy adjust not only through
“forced savings,” in which poor consumers are priced out of markets
for consumption gods, but also through “forced unpaid labour” in
which social norms lead women and girls to attempt to maintain
family consumption by doing more unpaid work to produce nonmarket substitutes. There are limits, however, to the ability of
women and girls to do this. Beyond narrow limits, substitution is not
possible, with the result that human capabilities and social networks
deteriorate. This reduces the productive capacity of the economy.
This is indeed a problem for Finance Ministers, but if the rules of
international trade and finance force their attention to be focused
on the problems of the next 24 hours, they will not have time to
consider the problems of the next 24 years. The fast dynamics of
hyper-liberalised finance tend to obscure the slower dynamics of
social reproduction.
This is changing in some parts of the world, as major changes take
place in the organisation of social reproduction through the ageing
of the population structure in the North and the ravages of HIV-Aids
in many countries of the South.
Heterodox macroeconomics recognizes that economic growth and
fluctuations are not independent, and that fluctuations in demand
lower the overall productive capacity of the economy. They have
not yet recognized that changes in the domain of social
reproduction also lower the overall productive capacity of the
economy. More work needs to be done to develop quantitative
feminist heterodox analysis that would reveal the significance of
these interactions. In the Conference session on feminism and postkeynesian economics, Haroon Akram-Lhodi made the interesting
suggestion of doing this by building on the work of Kalecki. Feminist
macroeconomics can also build on the work of Marx, who
recognized that the problems of capitalist monetary economies
cannot be reduced to insufficient aggregate demand, and stem from
the dynamics of production that is governed by profit. A feminist
macroeconomics can show that the dynamics of production that is
NOT governed by profit (ie social reproduction) is also relevant.
Feminist macroeconomic policy
Feminist economists are beginning to work on alternative policies.
For instance, valuable work has been published by Isa Bakker and
Brigitte Young on the critique of macroeconomic policy rules
(including balanced budget laws, asymmetric inflation targets for
central banks, rules on debt to GDP ratios and budget deficit to GDP
ratios). Caren Grown and Stephanie Seguino have produced a
paper on a feminist-Kaleckian approach to policy. We must build on
this work to show in what ways a feminist approach goes beyond
the alternative polices proposed by heterodox macroeconomics.
This, for me, is the appropriate task of extension and completion,
while seeking to undermine the paradigm of mainstream
macroeconomics.
Note:
This piece originally appeared in 'Feminist Economics Challenges
Mainstream Economics' edited by Bina Agarwal, Special issue of the
newsletter of
the International Association for Feminist Economics, Vol.14, No. 3,
2004
International Association for Feminist Economics ©