The Female Undercover Economist

Why different perspectives in economics are important

Summer means vacation, sun and ice cream, but for me, it also means reading books that I truly want to read. While at university, students are busy reading journals, articles and other course-related material, so after a long day at uni, I'd rather watch Netflix or listen to some music than pick up one of the books that have been stacking up on my table.
So, during summer vacation, I finally have the time (and the right mindset) to relieve my guilt and read all those amazing books that I just had to buy.

After I devoured "Thinking Strategically" - a great introduction to Game Theory - my brain demanded something more chill, but still exciting.
When I first started getting interested in economics I began reading Tim Harford's Blog "The Undercover Economist" and I liked his stories and anecdotes, and enjoyed his writing style generally. So, over a decade after its original publication, I decided to read the book that inspired the blog.

"The Undercover Economist" provides an easy and accessible introduction to the “dismal science” and it was a great summary of my first year of studying economics. Every time he mentioned something I recognized from my studies, the song "celebrations" went off in my head and I felt like a full on expert in economics. Of course, at uni we discuss these topics in much greater detail so - naturally - my brain started nitpicking at some of the simplifications. But as I proceeded to read, I wondered if the easy way was truly the right way in some parts of the book.

In a later chapter, when Harford talks about globalization and its effects, the simplifications made me suspicious. As he outlines the advantages of globalization he also briefly discusses sweatshops, the factories in developing countries that are producing (among others) our Nike products. Sweatshops have been criticised for their harsh working conditions and low pay, and Harford does clarify how horrible these conditions are but explains why people still choose to work there: because their alternatives are even worse.
This kind of argument irritates me generally, because "choosing" between being desperately poor in Chinas countryside or working under conditions leading several people to attempt suicide does not really strike me as much of a "choice". Apparently, this is the kind of simplification you have to undertake when writing an introduction about economics, but what really bothered me was the omission of gender.

The International Labor Rights Forum estimates that 80% of workers in the garment industry are women, so why didn’t Harford mention the gender dimension of globalization?

Globalization is usually associated with economic growth, which in turn relates to better living standards and also - more equality. These desirable (long-term) improvements stand in stark contrast to the current state of the globalization in many developing countries.

Sweatshops attract foreign direct investment, which could be companies investing in the region by building a factory and locating their production there. People are employed and the presence of the firm can lead to improved infrastructure in the area. All this is great because it leads to an accumulation of capital and hopefully serves as an engine for sustained economic growth. This is great for women because as they are included in the workforce they are able to accumulate their own capital, become more independent and - like in the very optimistic epilogue story to Harford's book - start their own business. What hopefully follows is a cycle of continuing improvements in equality.

This narrative of “it has to get worse before it gets better” doesn’t necessarily turn out that way, especially when it comes to the long-term effects on gender equality.  

We know that most of the workers in sweatshops are women and working conditions in most sweatshops are horrible, so, therefore, boycott those companies exploiting women? Not quite. While the companies taking advantage of loopholes in the international system are part of the problem, we rather ought to rethink the process of globalization generally. There is no secret group of men in suits orchestrating the great project of globalization, but a historical process of increasingly close ties between everything and everyone. The problem is not globalization itself but how women are included in the current process. While we cannot change if globalization is happening, we can work on how it is happening, because including women in mostly exploitative labor relations perpetuates bias and leads to reinforcing inequalities.

“Perpetuating bias and reinforcing inequalities” - What is that supposed to mean?

Suppose there is a country where a majority of the workforce is made up of men. A firm sets up a sweatshop and exploits the fact that up until now women have not been included in the workforce at all and probably have few alternatives to make a living. This goes along perfectly with stereotypes of women having "innate skills" for manufacturing work, for example, I mean what woman doesn't have "nimble fingers" that are just born to work on a sewing machine? Our firm hires mostly women simply out of convenience. In this sweatshop the working conditions are very harsh, workers are paid very little and the employees face sexual harassment. These are viable assumptions for sweatshops that try to maximize profits, are based in countries with lax labor laws and live in a world of gender stereotypes. Now, in this country, the men work the "normal" jobs and the women work in "low-skilled" jobs with horrible conditions, which (1) creates an inequality between the genders and (2) perpetuates the bias against women as being suited only for low-skilled labor.

The truth is, that things like bias and stereotypes are difficult to explain and even harder to measure, which is why it is easier for economists to omit them at points. Economic debate is based (or should be based) on carefully researched facts and economic models. If little research is available, that complicates the debate because arguments are mainly built on assumptions that are difficult to verify.

A smart Undercover Economist might ask why there is so little mention of gender in the mainstream debate. One reason might be that the majority of economists are men. Fortunately, there is an increasing awareness that there are fewer women than men in economics and the implications this has.
Living in the world as a woman offers a contrasting perspective to those of men. If there are fewer women in economics, diverse angles and issues outside a man's usual range get lost. This is not men's fault but a result of the society we live in; one in which women and men still face different hurdles and experiences.

I don't think Tim Harford intentionally left out gender issues - on the contrary - after being asked about why the Undercover Economist in his book is male he engaged with the current debate and even changed the character to female, which is great! What Harford did in his book was summarize the main findings and the current atmosphere of economics and the current state of economics is not Tim Harford's fault. The founders of economics such as Adam Smith and David Ricardo were all men and even today at university, most of the models we study and articles we read are written and composed by men and so are most of the professors that teach us. I have not had a single female professor teach me in one of my eight (!!!) economics modules during the first year (Update: I have four more modules in economics this semester and still no females professor).  

So maybe this is why my brain was nitpicking, not only did it tried to connect everything I learned at uni with what I was reading, but it was missing a gendered perspective.

Tim Harford wrote a great book, and even better he realized his gender blindness and did something about it. This is a great example of how economics too can become more inclusive and increase diversity in the process. In the future, it would be great to see many more female undercover economists but also a female perspective in economics.

No comments:

Post a Comment