I Confess I Don't Get It

Several years ago I hosted Deirdre McCloskey's visit at GMU.  A condition of her visit was that she speak not only to the economics department, but also that she has the opportunity to meet with various women's groups and also the Gay, Lesbian and Transgender Alliance on campus.  The experience was enlightening to me as these are not groups that I normally would not interact with during my normal work routine.  I embraced the opportunity and wanted to go listen and learn.

But during a session where GMU PhD students in culutral studies were discussing their work with Deirdre about power and sexism as reflected in disciplines such as economics, and the sexism evident in the market in general, I started to question what was being argued.  But Deirdre seemed to understand the arguments being offered.  I was confused. The Deirdre McCloskey I knew was not only a philosophically aware classical liberal thinker who could write, but a damn good economist.  McCloskey's text in price theory is one of the best books anyone could read to learn economics from.  As I became more and more uncomfortable with the direction of the conversation, I intervened and asked Deirdre "I don't understand, what would need to be changed in Donald McCloskey's Applied Theory of Price now that you are Deirdre?"  Basically what I wanted to ask was "don't demand curves slope downward regardless of gender or sexual orientation?"

My question was never really answered and the discomfort I felt with the direction of the conversation, had now shifted to the discomfort that I caused by pushing an argument that perhaps bordered on impolite given the audience. So I kept quiet the remainder of the meeting, and never brought the subject up again with McCloskey privately --- which I regret. As readers of this blog will know, I consider McCloskey one of the most fascinating and original thinkers in economics and political economy (see my various reviews of her books over the years).  I should have just asked her what was on my mind, but I guess I got nervous that my inability to understand nuance would be revealed to blantantly.

Now Tyler Cowen has pointed us to a new blog by an undgraduate student of economics at University of Toronto that focuses on the clash of feminism and economics --- Economic Woman. The author is insightful and she writes in an engaging style, but again I ask "don't demand curves slope downward regardless of gender or sexual orientation?"  For example, hasn't there been significant studies over the years that have attempted to control for various factors (e.g., occupational choice, job tenure, educational choice, etc.) in the wage gap, and once these are taking into account the gap closes significantly.  Clearly the advice Economic Woman gives to undergraduates is reasonable advice for men and women.

My resistence to feminism as a doctine in contrast to economics is not a politically conservative issue.  My sister would beat me up if I tried to do that (BTW, congratulations Sue --- she is being inducted into her high school Athletic Hall of Fame for her coaching career tonight!!!).  No, I grew up in a household where women were expected to excel in athletics and life, and not accept barriers.  But so were men supposed to excel.  Thus, in my mind  the expectation of excellence turned into an argument for individualism, not a collective demand for action.  Women, like men, let alone minorities, should not accept any artificial barriers to pursuing their goals.  If people get in your way, don't let them --- either side-step them or run them over.  Don't ever let others define you, you define yourself; you are in control of your own destiny.  The cream always rises, is what my father always taught us.

When I learned economics at GCC, I came to understand that markets provide options for side-stepping or running over artificial barriers.  If the corporate old boys network presents barriers, then start your own business and compete with them in the marketplace.  Markets are a great equalizing force in society.  They provide the means for the escape from oppression.  In fact, Deirdre McCloskey's latest work on Bourgeoise Virtues makes this argument in historical form better than I have seen elsewhere.  So irrespective of gender, sexual orientation, religious belief, nationality, and ethnicity, economic theory teaches that demand curves slope downward, and economic history teachers that market societies are the most open and equalizing.

In other words, economics and feminism do not collide.  A women practicing economics is no different than a woman practicing physics.  Of course, being a woman I am sure is different from being a man, just as being a young man is different than being middle aged man.  But if the claim is different than that --- in essence that there is a different economics for women than for men --- I must confess I just don't get it.  Again demand curves slope downward whether we are talking about men or women, whether we are talking about Jews, Christians, Muslims, or Buddhists, whether we are talking about Africans, Americans, and Europeans.

Comments

[Finja]

I guess, it's not so much about a different economics in this sense, but it's about the stuff around it: maybe women choose different topics to write about (I really don't know, but it would be interesting to find out), maybe it's about building networks, maybe it's about the obstacles to encounter as a female economics student.
If you argue "It's all one economy, regardless of colour, race, gender etc." than why have blogs about different perspectives from different countries?

[spencer]

You are missing the point.

Yes, demand curves slope downward.

But, men and women face different demand curves just because they are men or women.

The two curves may be almost perfectly parallel, but they are different and generate lower prices for women.

[spencer]

You are missing the point.

Yes, demand curves slope downward.

But, men and women face different demand curves just because they are men or women.

The two curves may be almost perfectly parallel, but they are different and generate lower prices for women.

[Matt]

If women are different (they are are they not?) then that difference should be reflected in different elasticities of demand.

If the difference is not thusly reflected, then the economists is wrong.

[Eric]

Contemporary feminism is not challenging any principle of enconomics per se, it's challenging rationality as such. There is no point trying to "get" it in narrower terms.

[liberty]

I had a look at the blog and I'm not sure that it was trying to claim a different economics or different demand curves, or anything like that. I think it was more a subsection (like agricultural economics), and looked at things important to women. For example, how much work is done in the home and what is the GDP generated by the work? Or, something like Caplan's "how many babies should you have," for some trivial examples.

More interestingly: how does development differ in economies where women have more choices? How can the institutions of a society create cultural change that will give women more choices? Just as an economics of slavery agenda looks at these kinds of questions with regard to slave holding, a "feminist" economics can look at these with regard to the role of women in a society.

I only glanced at the blog, so its possible that there is more going on there, but that was my impression.

[Fabio Franco]

This is from Econjournalwatch this month:

"Why Few Women in Economics? Christina Jonung and Ann-Charlotte Ståhlberg show that women are under-represented in economics in five countries and discuss explanations. Commentaries are provided by Ann Mari May, Deirdre McCloskey, Catherine Hakim, John Johnson, and Garett Jones."

In Deirdre McCloskey's comments, she says that "women are discriminated against when they don't believe in Max U.".

Maybe her article will provide a bit of clarification to your question....

http://www.econjournalwatch.org/pdf/McCloskeyInvestigatingMay2008.pdf

[matthew mueller]

This is a great post. I don't think the readers on this blog (or Boettke himself) quite understand what McCloskey was getting at. The *first* question we should always ask about economics is the most fundamental one --- what does economics seek to explain? Economics seeks to explain anthropologically how humans interact and conduct social relations with others. Economics must then not only explain exchange as it is practiced today in the marketplace, but also social coordination in less developed societies in order for its laws to be tenable --- after all, these people are humans too. But do the laws of economics (elasticity, marginal rate of substitution, welfare theory, etc.) apply to such settings? Clearly they do not. It would be anachronistic to speak of the Slutsky decomposition in some ancient civilization. Once this is recognized, an important question arises: How lawlike are the laws of economics?

Are these laws simply emergent properties of more advanced economies, or are they just mere conventions, subject to the attack of feminists?

If these "laws" are presumed to explain social coordination, then surely they should be able to account for all human interaction. These feminists may be onto something....

[Pearl]

@Matthew Mueller

Are you serious? Not only that you more or less claim that the readers (even writers) of the blog are too dumb to get McCloskey's point, you even try to explain to us the concepts of economics by making the most trivial and pointless statements about economic laws which seriously do lack originality and have been rehashed by many people for years.

Time invariant relations between cause and effect and non-contingency, a priori nexus of scarcity, etc. as prerequisite for an economic law are the oldest story ever. Obviously, they be allowed to account for every case, if not than it can't be considered an economic law and it's a just rhetoric mean to assign more credibility. I can't think of any Austrian who is not aware of economic laws and their implications. Feminists are not onto something, because their argument has nothing new to offer and certainly doesn't concern economic laws as they are defined by Austrians.

[Rafael]

(sorry or the bad English, it is not my fist language)

Matthew, I think that the neoclassical economic laws (based on equilibrium models) do not generally apply to non market societies because of the lack of systematic equilibrating forces, forces that are generated by the market process through the discovery of profit opportunities by entrepreneurs. Before the emergence of modern capitalism these forces were too weak to approximate the economic system to the equilibrium conditions of the neoclassical models.

But since the neoclassical theory is basically the pure logic of choice, it is in a certain way universal. But it is not directly applicable to reality because in the real world there exists uncertainty regarding the means and ends framework with this theory assumes to be given to the agent. However, when the market is free the discovery entrepreneurial process becomes so strong that the economic reality ends as being a very close approximation to these neoclassical equilibrium models.

[Robert]

Pearl, one doesn't write the belittling phrase "just rhetoric" in a discussion of McCloskey's views, unless one includes some caveat or sign of self-consciousness.

[Alex M Thomas]

I think that, women in a male dominated society, Muslims in a Hindu dominated society, etc will not have all the options that the privileged have.

Lack of opportunities is what needs to be discussed. And these are not stray incidents (outliers) in a country like India. Apart from my skepticism about the stability and existence of demand curves, i wonder whether 'these' women have any demand whatsoever!

[matthew mueller]

Pearl,

Let me first say that just because the other readers on this blog did not (in my opinion) get McCloskey's point in no way suggests that they are dumb. Theorists operating in different paradigms all suffer from the same constraint: an inability to appreciate work being done elsewhere. This does not mean they are dumb, they are just trapped in their own paradigm (of which they are masters). It is meaningful dialogue, and not parochial intellectual preponderance which we should be aiming at. That was the message in my post.

Also, I hope that you do not mean to suggest that historical contingency and uniqueness should be passed over in favor of the generalizing power of economic laws. Laws, as you write, must be time invariant and non-contingent in nature in order to be credible, but this does not mean that they are universally applicable because first you must estabilish the tenability of their universal status. How is this to be done when the world in which we live is so rich and complex, and enveloped in uncertainty? The intellecually sophisticated will argue that "laws" (often after these points are raised you will find them substituting the word theory for law) --- so, the intellectually capable will now be seen arguing that "theories" are simplifying devices that should be used as heuristics. Already you can see the precariousness of concepts that attempt to generalize certain phenomena, the essential features of which still elude us. Another strategy that was embraced by Menger, among others, was to defend the idea that the essential features could be identified, even if they are in practice seldom realized because of the existence of countervailing forces. This just begs the question. What criteria should we use in evaluating essential features from non-essential features? This gets us back to fundamentals, which is precisely what is at issue. The powerful force of Laws (theories) are not as simple and straightforward as you think.

Even now, philosophers of science agree that no theory is ever complete, and a good (superior) theory is one which does NOT try to explain everything, but instead tries to find ways in which its predictions and assumptions can be falsified. Marx and Freud are uninteresting for this very reason. (I would also add Mises to this list, for how is his theory of praxeology any different from Marx's theory of economic determinism? To argue that all action is purposive (except for reflexes) does not tell us very much. It is so general that it is trivial.)

I can keep swinging, but I will end here.

Rafael,

You raise a very good point. Your point actually tries to answer the point I made in my post. Let me think about it some more and come back later.

-matthew

[Toos Hy]

@spencer In other words: Perhaps the demand curves are are more curvy and the slope more enticing?

[Deirdre McCloskey]

Dears,
Let me return the compliment to Pete---he's an economist we all can learn from (I certainly have: Pete and Don (Boudreaux and Lavoie) and Jack and Karen and Dan and you all have slowly, slowly made me into an Austrian; all I need to be a Real One is to learn German. . . not, alas, an easy task!).
Pete: Sure, the technical points about Max U go on holding regardless of who wields the bordered Hessian matrix. And to push one step back from that formal point, sure, demand curves slope down, regardless of gender. As Dan Klein likes to put it, water runs down hill. I'm writing this from South Africa, and just had a lovely luncheon with some people and we got on to the minimum wage and its result in 50% unemployment here (no joke). I suggested gently that setting a high minimum wage was a good way of insuring that no young black person without skills got a job. My suggestion evoked from someone the usual reply, which Russ Roberts quite properly regards as disqualifying a person for membership in his Society of Real Economics (SORE): "But we want to symbolize our concern for the poor." I wish everyone could grasp that water runs downhill. It wouldn't matter whether it was young men or young women on the hill. It would reduce poverty worldwide very greatly.
But as some here have suggested, there's a wider context, yes? In The Bourgeois Virtues I suggest that an economics that works only with the virtue of Prudence is going to, sometimes, get into trouble. Not always, but sometimes, and those some times are pretty important. A feminist economics admits other virtues and vices beyond Prudence Only. With economic results. A strict Beckerian would say, "When we ask a mother to throw her infant son over a cliff for $3.50 and she refuses, it's merely a matter of the price. At $35,000 or $350,000 there would be deals made. There: the law of demand/supply holds." All right, cute. But that she takes the virtue of love or faith or justice entirely seriously does nonetheless radically change the relevance of the deals she makes. She for example will be at a disadvantage in inside-the-family bargaining because the father of the child cares less. Her employment opportunities are radically cut because she won't so easily leave the child with another caretaker. If she's a high-flying lawyer the first child will cost her about $1 million lifetime opportunity cost; by contrast, the same event raises the income of her equally high-flying husband ("He's a family man: stable type. Let's make him a partner."). Her caretaking (notes Nancy Folbre) is undervalued, at any rate by the standard of the social value of raising a kid with at least minimal ethical standards. And on and on. The "on and on" doesn't make economics stupid or useless (here's where I part company with some of my feminist economics friends, who tend to be left wing and unimpressed by downward sloping demand curves). It just means economics had better be very alert to the force of gender in social behavior, for some purposes (many, actually: but not for covered interest arbitrage, say).

The way Gary Becker treats love within the family symbolizes all this for me. He calls his two parties M and F, and talks of "love" with exactly those scare quotes around the word. It's very butch, but it makes women laugh in astonishment, even those who understand quite well those so-cool bordered Hessians!

Love,

Deirdre

[Steven Horwitz]

Let me add an observation about Love and Prudence to Deirdre's apropos comments.

One of the irony's of the left's rejection of markets and capitalism is that it has missed the ways in which capitalism helped make the family into something very different than what appears in the world of Becker. Prior to capitalism, and industrialization in particular, Prudence took up a lot more space in the family than Love (though both were present). As capitalism-driven growth separated work and home and undermined the market production role of the family, it opened up space in that very family for Love to play a much more meaningful role.

The Beckerian view of the family, with the male at the top as a sort of entrepreneur/CEO, is much more applicable to pre-capitalist households than capitalist ones.

The left, and especially the feminist left, has unfortunately missed the degree to with capitalism, by reducing Prudence's role in the household opened up space for Love and thereby "humanized" the family in the way nothing else did, or could.

Of course, and this is the real point, we largely have no one to blame but ourselves for the views of our critics. When the defense of the market is put forward by the same folks who defend a model of the family that cannot account for a real, meaningful notion of love, why should our critics ever make the connections I've made above?

Understanding that households might operate on different principles than the market is not to abandon economics. To the contrary - it is to recognize Hayek's insight about the difference between orders and organizations and the challenges of living in "two sorts of worlds at once." The sooner we recognize WHERE the laws of economics apply with the force of water running down hill and where they do not, the better off we'll be. And the more those critics might give us the time of day.