Below is an extended copy of a presentation I delivered to the 2008 Centre for Independent Studies Advanced Liberty and Society rountable on an Austrian economic perspective of feminist economics.
Feminist insights have been applied to a growing number of social sciences since the 1960s, such as anthropology, history, law, literature, philosophy, political science and sociology. By contrast, an explicit feminist scholarship, in the form of ‘feminist economics,’ has made a relatively late entry into the economics discipline.
In general terms, feminist economics aims to assess economics through a feminist lens ‘for the purpose of improving women’s economic condition’ (Strober 1994: 143). A major objective of this school is to illuminate the biases that ‘have privileged either men as subjects or ways of knowing that are valued because they are associated with social conceptions of masculinity’ (Horwitz 1995: 259) in economic theory and policy.
Feminist economics, neoclassical economic agency and market competition
Neoclassical economic thought is based on the model of a rational, autonomous, self interested agent that makes optimising choices subject to exogenously imposed constraints. This agent is commonly referred to as the ‘rational economic man’ or ‘homo economicus’.
Many critics suggest that this neoclassical construct departs from the economic behaviours observed in real people. Feminist economists have gone a step further to suggest that homo economicus represents a privileged, masculine view of the economic order, to the exclusion of feminine characteristics such as connectivity, altruism and emotion (Table 1) (Strassmann 1993; Barker 1995; Grapard 1995; Nelson 1995; Barker 1999; Hewitson 1999; Jennings 1999; Nelson 1999; Nelson 2001; Nelson 2005). According to these theorists, the implied masculine meanings associated with rational economic man are accorded higher status in economic theorising.
Table 1: Selected conceptual dualities identified by feminist economists Masculine – Feminine Man – Woman Individual – Society Public – Private Market – Family Production – Reproduction Money – Love Competition – Cooperation Exchange – Charity Autonomy – Dependence Self-interested – Other-interested Preferences – Needs Separation – Connection Rationality – Emotion Source: Nelson 1996, Jennings 1999.
Other aspects of neoclassical theory have come under scrutiny. For mainstream economists, market competition is desirable as it yields an efficient configuration of scarce resources throughout an economy. For some feminist economists, however, competition conjures up negative images of fighting and conflict, aggressiveness and manipulation. Competition is also seen to be propelled by a drive to win and the possession of killer instincts by market participants (England 1993; Horwitz 1995; Walker et al. 2004).
In her analysis of US economic history, Julie Matthaei describes the emergence of a ‘capitalist patriarchy’ where:
‘… competition pervades the masculine economic sphere. Capitalists compete with other capitalists for greater market shares and profits, and compete with their workers over the wages to be paid. Workers compete with other workers for jobs, and for promotions. The new ideal for men becomes struggling to advance oneself in the “dog eat dog” economic world, in which everyone is out to get you’ (2000: 5 6).
Not only does competition reflect certain kinds of behaviour attributable to men, but it also tends to harm women’s economic interests. According to Strober (1994: 145), ‘since women are disproportionately represented among the “have nots,” women stand to benefit from a world view that is less centrally focussed on scarcity, selfishness and competition.’
While feminists differ on the details, many share a general view that economists should promote studies of agency and behaviour ‘with an eye to their social and institutional character’ (Nelson 1996: 33). Deirdre McCloskey, for example, proposed the development of a ‘conjective’ economic approach that is ‘neither masculine or feminine but would be a human science in the pursuit of human ends’ (McCloskey 1993: 76). As part of these endeavours, economists ‘should stop treating cooperation and competition as dichotomous and start asking intelligent questions about how much of each works best under which conditions’ (Strober 2005: 269 270).
An Austrian economic perspective on feminist concerns
The Austrian school of economics – associated with Carl Menger, Ludwig von Mises and Friedrich Hayek – share with feminist economics a number of criticisms of neoclassical theory: ‘many aspects of the feminist critique of neoclassicism and the attempt to rehabilitate a real, acting subject have strong parallels with modern Austrian economics’ (Horwitz 1995: 265).
As part of this, Austrians reject some fundamental tenets underpinning the homo economicus concept. In particular, they emphasise the existence of agents with imperfect, idiosyncratic knowledge and subjective tastes, which need to be discovered and communicated to promote economic functioning. The favouring of these attributes of economic agency by Austrians represents a move away from rational economic man, not unlike that pursued by feminist economists.
An acceptance of the Austrian position has significant implications for the way one thinks about economic problems:
‘… The economic problem of society is … not merely a problem of how to allocate “given” resources – if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how best to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality’ (Hayek 1945: 520).
For Austrians, the competitive market system – underpinned by freely chosen prices and institutions such as property rights – most effectively directs economic resources to their most highly valued uses. Far from seeing it as a fearsome (masculine) struggle for economic supremacy, Austrians see competition as a procedure by which social cooperation is achieved:
‘… The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf; but everybody’s actions aim at the satisfaction of other people’s needs as well as at the satisfaction of his own. Everybody in acting serves his fellow citizens. Everybody, on the other hand, is served by his fellow citizens. Everybody is both a means and an end in himself; an ultimate end for himself and a means to other people in their endeavors to attain their own ends. This system is steered by the market. The market directs the individual’s activities into those channels in which he best serves the wants of his fellow men’ (Mises 1949 : 257).
In a similar vein, Hayek famously described ‘the order brought about by the mutual adjustment of many individual economies in a market’ (1976: 108 09) as a process ‘not only ‘to exchange’, but also ‘to admit into the community’ and ‘to change from enemy into friend’’ (1976: 108).
To be sure, the economic prosperity derived from the ‘complex interactions of many, many separate individuals (male and female, married or single, parents or childless, selfish or emotionally connected)’ (Vaughn 1994: 311) is the unintended product of human action but not of design. Nonetheless, the discovery procedure of the market effectively breaks down the competition cooperation distinction expressed by feminists.
The female entrepreneur as a gendered Austrian economic agent
In their efforts to describe an acting economic subject, Austrian economists also stress the importance of entrepreneurial behaviour in shaping market processes. One account describes the essence of entrepreneurship as alertness to previously unnoticed profit opportunities (Kirzner 1973). Another interpretation sees entrepreneurial actions involving ‘creative destruction,’ where established ways of ordering the economic environment are displaced in favour of new configurations (Schumpeter 1943).
While the Kirznerian model seems more benign than Schumpeterian creative destruction, Austrians would tend to see both types of entrepreneurial behaviour as complements to each other – the former responds to change whilst the latter creates change (McNulty 1987; Walker and Joyner 1999).
In a similar way to their criticisms of market competition, some feminists associate entrepreneurship with aggressive, masculine behaviour to accumulate profits at the expense of other economic agents (Stevenson 1990; Jonson Ahl 2002; Lewis 2006). Austrians would respond by suggesting that entrepreneurs are pivotal in delivering the broader social cooperation that competition generates. Indeed, the identification, and elimination, of economic inefficiencies, waste and error by entrepreneurs is a service of great benefit to all market participants.
The feminists’ admonition of the entrepreneur also seems increasingly irrelevant as more women themselves become entrepreneurs. In June 2004, there were about 529,000 women operating their own small business in Australia (or about one third of total small business operators). The growth in the number of new businesses established by women exceeds that commenced by men.
Female entrepreneurs are also becoming more prevalent across more sectors of the Australian economy. While past employment has an effect on the choice of industry in which the entrepreneur establishes a venture, about 25 per cent of women surveyed in a 2000 study established businesses in traditionally male dominated mining, manufacturing, construction, wholesale trade and transport activities, even though about 9 per cent of surveyed women had direct experience in these sectors (Bennett and Dann 2000).
Finally, surveys indicate that there is a spectrum of motivations expressed by female entrepreneurs that may confound stereotypes. Bennett and Dann (2000) found that women’s motivations for starting a business were motivated by internal needs – such as self fulfilment, independence and the need to achieve – as well as financial gain. A 2004 survey of businesswomen in rural and regional areas found a variety of objectives for starting and operating a small business. These included an ‘opportunity to start a unique business,’ having ‘more control’ over one’s life, to ‘learn new things’ or ‘to fulfil a dream’ (RIRDC 2004).
Some studies suggest that men tend to share similar underlying aspirations reported by female entrepreneurs. An analysis by Walker found ‘there are more similarities than differences between women and men and their motivation to become self employed’ (2004: 11). Despite some gendered differences, for example on work family balance, Bowman (2006) also concluded that the women and men surveyed in her study had similar motivations for doing business. While not all studies share these views, there appears to be sufficient evidence to question some of the feminist economists’ negative portrayal of entrepreneurship.
A cursory analysis of alternative politico economic systems, or of economic history, illustrates that market capitalism – with freer markets and more limited governments – provides the best environment for improving the economic status of women (and men). Even in the face of such evidence, however, a number of feminist economists retain strong anti capitalist sentiments.
While Austrian economic perspectives are not predicated on gender lines per se, it seems capable of accommodating the economic implications of a gendered world: ‘the Austrian approach accepts cultural phenomena, such as gender identities, as important in the construction of individuals’ plans of action’ (Waller 1995: 20). If feminism is about choice, as described recently by Brown (2008), then Austrian economics could be a most useful tool when exploring issues concerning women.
The Austrians’ emphasis on institutional comparisons could also help feminist economists develop a better appreciation of how competitive market capitalism emancipates women. Ludwig von Mises provided an early example of such analysis when he stated that:
‘… So far as Feminism seeks to adjust the legal position of woman to that of man, so far as it seeks to offer her legal and economic freedom to develop and act in accordance with her inclinations, desires, and economic circumstances – so far it is nothing more than a branch of the great liberal movement, which advocates peaceful and free evolution. When going beyond this, it attacks the institutions of social life under the impression that it thus be able to remove the natural barriers, it is a spiritual child of Socialism’ (Mises 1920: 101).
It is hoped that further exploration of the issues presented in this paper will highlight the intellectual possibilities of reorienting feminist economics – including views on economic agency and market competition – through an Austrian economics lens.
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