The single story in economics - and why we need more women in economics

One of the reasons we decided to start a blog was the lack of women in economics, especially among bloggers. There are some great blogs written by women such as The Enlightened Economist by Diane Coyle or Jodie Beggs’ Economists do it with models. But if you stroll through this list of The Top 100 Economics Blogs you can’t help but notice the omnipresence of men in the econ blogosphere. This is (somewhat) representative to the field of economics in general, only 33% of economics undergraduates in the UK are women and at the top European Universities, only one eight of the economics professors are women. Recently there has been increasing awareness among economists that this is a problem and people are trying to figure out the implications and reasons for this. This issue reminded me of a Ted Talk by Chimamanda Ngozi Adichie I recently watched about the danger of a single story.

In her talk the Nigerian novelist (and feminist), talks about how our world is populated by the stories we tell and how it can be harmful if the subject (may it be a person, a country or an organization) is reduced to a single story. She uses her home country Nigeria as an example and recalls experiences in which people have asked her about her home “country” - Africa -  and how Africa’s narrative in the United States has been reduced to an image of poor helpless people, but doesn’t do justice to a continent consisting of many diverse countries and people that are much more than the single story that is being told about them.

What is the story of economics then?

It’s a story of men and models. Over centuries men of various branches of the social sciences populated the discipline of economics with theories, models, and ideas about how the world and our society works. They have had (and still do) brilliant insights that expand our knowledge of how we interact and can help create a better society. But back then - and now - men experience different realities than women. When Adam Smith published his book The Wealth of Nations in 1776 women weren’t even allowed to vote in the UK. Smith himself lived at his mother’s house while writing his thesis and ironically wrote about the butcher, the brewer and the baker contributing to society but overlooked his mother creating value by transforming those goods into meals. Even today, household work is not measured in the most widely used statistic for economic wealth - GDP. Men simply did not see what was happening behind the curtains where most women were bound to stay in the kitchen and take care of the household.
It’s understandable that this patriarchal society produces insights into the working of the economy that are not reflective of everyone’s reality, but we live in a very different (though still patriarchal) society today. Women today are in a much better position in terms of political voice and agency, but the story of economics is still told by men. Economics has such a central place in our society and reaches into our daily lives so that you'd think we would want the inputs and voices in the field to be as diverse as possible to speak of all our experiences. We experience different realities based on our gender, ethnicity and income level and to improve the society we live in these stories need to be heard, too.

It’s not the fault of the established economists that this is the state of economics. But they need to recognize that there are things they don’t see and that they can’t cover the entire spectrum. Too many people deny that there is a difference in the experience of men and women (or people of different ethnicities, or people of different incomes) because we accept the single story as the official one. Luckily, this seems to be changing. In the underground network of economics aka #econtwitter debates about gender and diversity are happening around the clock. Various economists from all over the world discuss how we can improve the overwhelmingly aggressive seminar culture, enable women and minorities, and reform guidelines to make them more sensitive to issues of diversity.  
Stories shape the way we think about the world and recognizing that can enable us to create a platform where more diverse stories are told and heard, which translates into a more diverse society.




Humanity's last creation

As a second year university student, one of the things I have been prioritising over the past months is internship applications. In a post-exam world, my plunge into this sphere of research and interview prep has become more complete, scouring student room forums for any hint I can extrapolate and watching YouTube videos to convince myself of their productive value. The particular role I am applying for is related to technology within business, an area of increasing contemporary significance within human innovation more broadly as well as the more micro scale of firms.
What has struck me the most in my research of technology has been our inability to foresee the implications of its creation. A conceptual buzzword that has kept popping up is 'technological singularity'. Technological singularity concerns the hypothesis that the creation of an Artificial Super Intelligence with the intellectual capacity to exponentially surpass human comprehension, will trigger technological growth able to alter human civilisation in ways we cannot predict. The creation of ASI could be humankind's last invention. This hypothesis would come to fruition due to the self teaching nature of AI, coupled with unlimited data and resources. Whilst initially, reaching a human level of intelligence could take considerable amount of time, once this is learnt, such processes can be replicated and completed much faster. To understand the mechanics of this further see the video below:
Beyond the technicalities of how ASI could be created, the implications for our existing systems of government and societal organisation are of particular interest. Within a new hierarchy of humankind being intellectually inferior to this creation, could we coexist? Elon Musk's approach is to integrate humankind with artificial intelligence with his new project Neuralink, contemplating implanting technology into the brain to connect with interfaces. Kasparov points to the current superiority of AI working alongside humans in chess when playing against pure AI technology in a so called 'centaur' team, potentially pointing to a complementarity between humanity and technology extending beyond board games.
Within technology dialogue is a fear of the accompanying shift in labour markets, displacing labourers with robots able to complete tasks with greater efficiency and accuracy. Is this next revolution of labour markets something that existing skills within the market are able to adjust to? Urban Wire speculates that those whose jobs are most likely to be affected often don't have the necessary skills to fill the newly created jobs. And whilst PWC illustrates that initial impact is minimal with only 3% of jobs at risk of autmoation by the early 2020s, this figure increases to 44% by the mid 2030s.

Undeniably, automation and emerging technology does pose a threat to certain sectors and the jobs within them. But does this equate to something we should fear? Change is a natural part of progress and amidst all the unknowns regarding the role of humans within a technology dominated economy and broader world, we should be seeking to prepare and anticipate the skills we might need. As PWC contends, business and government need to work together in order to encourage education and retraining schemes for career changes. This emphasis upon training and educating future skills enables us to remain equipped for an evolving job landscape.

Visit https://www.pwc.co.uk/services/economics-policy/insights/the-impact-of-automation-on-jobs.html for an interactive look at how automation may impact different sectors across the world.

The Social Cost of Carbon

To celebrate the day where I hand in my environmental economics essay, I will dedicate this post to my topic, the social cost of carbon.


The social cost of carbon is – pretty straight forward – a price for carbon emissions. Whether it’s during the production of clothes, meat or the paper you cry your tears during exam season on, firms emit CO2 which then gets stuck in the atmosphere and contributes to global warming. While global warming is starting to annoy us a little now, it is very likely to get much worse in the future, especially if we continue emitting carbon like we do now. Economists like to think of prices as a communication device. If the price for chocolate increases then there might be some difficulties in the chocolate-making-process which are translated into a higher price (more on prices from our article a few weeks ago). The idea behind this is great, but some things, such as the environment and more specifically in this case carbon, are not traded in a market. No one is really buying carbon. The environment is bearing the costs of carbon in terms of a warming climate without anyone actually compensating for this. This is where the social cost of carbon enters the stage. However, since we cannot simply observe the demand and supply for carbon and determine an efficient price, the cost of carbon needs to be calculated manually, which sadly brings us to the dire reality that it can also be easily manipulated. Someone like Trump could dictate an approach that leads to a lower cost of carbon, signalling (falsely) that carbon emissions aren’t really as bad as all those scientists keep insisting.  Even worse, to truly combat climate change international cooperation is necessary, but not every country has the same incentive to reduce carbon emissions. Some cold countries such as Russia could even benefit (at least for a while) from a warming planet and thus better conditions for agriculture. Good old Germany, too, won’t be as affected by climate change as poor Brazil for example. And apparently, people drowning and millions of migrants is not enough of an incentive for the international community to get their s%!$ together and start acting. A global cost of carbon could at least attempt to reign in the enormous amounts of carbon that are emitted and reflect how much our cruise ship trips and cheeseburgers truly cost.

Considering Consequence in Public Economics

With exam season just a week away, I thought I would take this procrastination opportunity to (continue to) pretend to revise. However instead of productively using this post to clarify my thoughts in an area of weakness, I am going to be considering a relatively trivial part of my public policy module to highlight a pitfall of working as a policy adviser within economics.

Formulation of theory and models makes up a considerable proportion of core economic study. Within applied economics modules such as my introductory public policy course, the assumptions made within such models are put to the test. The introduction of a policy has two classifications of consequence: direct and indirect. The direct consequences of a policy are more predictable, however act under the assumption that economic agents who are affected by the policy do not change their behaviour in response to said policy. The indirect consequences challenge this assumption and can be more difficult to predict. To illustrate this policy dilemma I will turn to my lecture notes to compare a more comical instance to one holding greater long term impact.
In 1974, in the midst of the oil crisis, the United States decided to lower the speed limit from 70mph to 55mph, partially as a solution to fuel shortages. This legislation would add 16 minutes to a 70 minute trip. In economics, the value of time is often considered in terms of wages, or the price of a portion of your time. Using the average wage, the additional time for journeys equated to roughly $1.15. This cost turned out to be a great enough financial incentive for drivers to continue using the old speed limit and attempt to evade penalties. By 1984, in New York drivers were above the speed limit 83% of the time. Alongside this staggering statistic, drivers were purchasing radios in order to warn other drivers about the whereabouts of speed traps. The number of these radios purcheased, admittedly unable to be linked completely to this trend, rose from 800000 in 1973 to 12.25 million in 1977. By 1995, congress voted to repeal this legislation, implicitly acknowledging the failure to account for indirect consequences of policy.
This funny example of the lengths people will go to in order to avoid legislation unfavourable to their goals is taken a step further following policy introduced by Reagan in 1986. Tax deductability- effectively allowing a lower liable taxable income- was ended for all loans except mortgages. This led to banking solutions being developed to package loans (car, credit cards etc) in a manner which would allow for the tax deductibility criterion to be reached. Whilst in 1989 just under 6% of households had a mortgage, by 2010 this had surpassed 20%. The erosion of norms of mortgages being paid on time led to riskier mortgage loans, contributing in part to the housing crash precipitating the 2008 financial crisis.
Ultimately, these two examples illustrate that policy is not easy to formulate, whether economic or otherwise, with indirect consequences potentially haunting any expected legacy of reform.