Economics has been heavily criticised for being unnecessarily complex, unresponsive to criticism, and unable to predict and respond to major financial crises. Recently, we have seen calls for a broader range of perspectives to be included in the ways in which the subject is traditionally taught and understood. However, one perspective – feminist economics – has so far been missing.
Current neo-classically dominated economic thinking is limited in its understanding of the present crisis. As a result, the solutions proposed – often focused around spending cuts and austerity measures – do not have the effects that are promised. Proponents of new ways of teaching economics have demanded a syllabus in universities that includes alternative and more varied ways of understanding the world that are often rejected by mainstream economists.
Feminist economics, which has been producing sophisticated analysis for more than 20 years, can provide us with some new insights into the present crisis as well as some solutions.
Feminist economists have, for example, been looking at the causes of the current financial crisis and exploring what would have happened if Lehman Brothers had been Lehman Sisters. They argue that although there are many myths and stereotypes about male risk-taking and female caution that need to be dispelled, there is evidence to show that companies that have larger numbers of women on their boards are more profitable.
But there is more to it than simply wanting more Christine Lagardes or Janet Yellens in charge at the IMF, Federal Reserve Bank and other big financial institutions. This is not just the “business case for gender equality”.
Feminists also argue that mainstream economists need to change the ways in which they understand the world. Traditional economics views people as fundamentally rational individuals who know and pursue their own best interests at all times – a view that was demonstrated to be clearly untrue in the recent crisis.
Traditional economics also fails to count all the things that we have to do to keep ourselves going. Think of unpaid domestic work in the home, for example, or looking after children, old people and the sick. These tasks need to be recognised as important economic activities in the same way as other forms of work, such as producing consumer goods in factories or working in a shop or a bank.
If all of this counted as part of our economic calculations we would value them very differently. And of course it is often women who do much of this unpaid work; they tend to take up the slack when spending cuts mean a reduction in the provision of childcare and care for the elderly, pushing those tasks back onto the family and the community.
As a result, feminist economists advocate some different solutions to the present crisis. The UK-based Women’s Budget Group has argued that even many of the current Keynesian solutions of stimulating the economy out of crisis are still too limited.
For example, instead of thinking about spending on infrastructure primarily in terms of physical projects – roads, nuclear power stations, high speed train links and so on – we should also prioritise developing social infrastructure.
Spending on childcare and care for the frail and elderly would create more jobs than spending on physical infrastructure. And this type of spending would also create more jobs for women rather than jobs that predominantly go to men.
This is not an academic debate: economic ideas focused on gender can clearly be applied to pressing, real-world issues. So it is not just traditional economists teaching in universities who could benefit from the insights of feminist economics, but policymakers too. Let’s start listening.
A version of this article first appeared on Manchester Policy Blogs.