Meet the Women Economists That Are Turning the Tables
Worldwide, economic policies still rely on fundamental economic theories that were formulated by Adam Smith, John Maynard Keynes, Milton Freedman, and other men. The number of women economists has grown, but their influence on public decisions has been disappointingly low. But now, the pandemic is creating a more fertile environment for their ideas to be heard.
Women economists are questioning critical notions like ‘value’, ‘growth’, and ‘GDP.’ They are drawing attention to the failures of the free market, reclaiming a strong role for the state, and proposing ideas that redefine capitalism as we know it today. They’re pointing to the unequal terms on which men and women participate in the global economy. They want to see an economic system that takes into account the hard reality made of paid and unpaid work, as well as the social and environmental consequences of our choices.
Kate Raworth is a Senior Research Associate at Oxford University’s Environmental Change Institute and the author of the acclaimed book “Doughnut Economics”. She defines herself as “a renegade economist focused on exploring the economic mindset needed to address the 21st century’s social and ecological challenges”. Raworth thinks that there is an absolute need to rethink economics, saying, “The Millennium Development Goals, set in the year 2000, were very much focused on meeting basic rights and needs such as health, education, food, clean water and sanitation, access to employment and so on”. She comments further, saying, “The economics from the last century that we’ve inherited — largely 20th century thinking rooted in 19th century theory — in no way equips us to understand 21st century challenges, given what we now recognize about our wellbeing, our interdependence with the living planet, and the ways in which we are fundamentally running it down.”
Another prominent female economist, Founding Director of UK Institute for Innovation & Public Purpose Mariana Mazzucato, has established herself as an “economics agitator”. In her books and TED talks, she demolishes the perception of governments as bureaucratic and incapable compared with the supposedly innovative private sector. She also calls for governments to give direction to the economy, making the necessary investments early on, and governing the process to make sure that citizens benefit. In 2017’s The Value of Everything, Mazzucato highlights the disconnect between “value” and “price”, a reality that underpins the massive levels of unpaid and low-paid care work that have become evident since the outburst of the pandemic.
Clearly, the more women in the economic field, the larger the contribution they can provide. The presence of women in top economic and financial jobs is slightly improving. Christine Lagarde and Kristalina Georgieva currently chair the European Central Bank and the International Monetary Fund, respectively. As in other domains, reaching top jobs is a positive step for gender balance, but it’s not indicative of a sufficient level of inclusion in the field overall. In 2019, MIT economist Esther Duflo received the Nobel Prize for economics for her research showing which investments are worth making and what has the biggest impact on the lives of the poorest people in India and Africa. Receiving the award, she said, “Showing that it is possible for a woman to succeed and be recognized for success, I hope is going to inspire many, many other women to continue working and many other men to give them the respect that they deserve like every single human being”.
Women’s representation in the economic and financial sector is discussed at length in the latest book by another brilliant female economist, Vicky Pryce. Pryce, who recently published “Women vs. Capitalism”, is the former Joint Head of the UK Government Economic Service and current Chief Economic Adviser at the UK Centre for Economics and Business Research. Her book is subtitled: “Why can’t we have it all in a free-market economy?” and discusses virtually all factors hindering women from advancing as they would deserve, such as motherhood, pay gap, bias, unpaid work, and poor access to information. The central theme is that the gender gap should be treated as a market failure that needs corrective measures. We will not achieve equality for women in our society without radical changes to capitalism. Rather than prioritizing #MeToo, body image, and general cultural change, economic independence and financial equality are the only means through which women can be equal. One of the book’s virtues is that it provides solid data and arguments to educate those who still do not believe the disadvantages women face. The author talks out of her significant experience not only in government but in large companies as well. I met Vicky at a roundtable organized by Athena40, a women-led platform promoting accountability in leadership. Later, I asked her which of the key elements of our economic systems need to be urgently rethought. Here is what she told me: “It must be obvious by now that left to itself the market will not be clear to what should be an optimal use of resources. So, intervention will be needed at every stage. At the very least it includes taking into account in government policy of the longer-term cost to the economy of women being prevented from participating properly and to their full potential. This requires quotas for senior positions in organizations’ to be legally enforced and to be achieved over time, a bit like the regulations that car manufacturers must follow to achieve a certain level of CO2 reductions over a set number of years. And the absolute right to flexible working while also providing free or heavily subsidized childcare that pays its way as women’s role and position in the labor force increases and which in the end will benefit all.”
The ideas brought forward by these women economists were perhaps seen as revolutionary a year ago. But the global experience of 2020 has shown just how vulnerable our economies and societies are. An OECD report in 2019 had already warned that “Economic growth has continued to be the primary goal of economic policy, from which it is assumed other objectives will flow. Material consumption has been taken as a proxy for progress and development. Equity and environmental considerations have been dealt with ‘after the event’ rather than as integral to economic policy”. This week, the 2021 World Economic Forum annual gathering’s overarching theme is “building a fairer and more sustainable world”, and the conference extensively covered gender parity, climate change, social and economic inequalities, and finding the right balance “between freedom and justice.”
The case for a new approach to economics has been massive for a while. The ongoing crisis is forcing traditional thinking to acknowledge its limits and is creating space for new ideas that address some of the world’s most pressing issues. Economics will only benefit hugely from women’s intellectual abilities as well as their closeness with the real world. Given the current status of the economy, this is hardly an opportunity we can afford to miss.
Women in Action — Highlights from the 2020 Reykjavik Women Leaders Forum
Women Leaders call for urgent actions on gender balance, health protection, and building power and confidence together.
Women in Action
Conversation with Gill Whitty-Collins, author of WHY MEN WIN AT WORK