This essay will discuss the core assumptions of the neo-classical economic view and their feminist critiques. I will be focusing on the neo-classical view of rational economic man, specifically in comparing utility, unchanging preferences, domestic labour and the rational choice model. I will also consider some of the differences in views of macro-economic policy between the feminist perspective and the neo-classical perspective and their implications.
First I would like to consider the differing attitudes towards the implications of individual and societal factors on the economy of these two economic perspectives. Neoclassical economics believes that people are self-interested beings that make rational economic decisions to maximize individual utility. They also believe that the market is self-regulating. Left unhindered by government, individuals can optimize their opportunity to make rational decisions and under these conditions the economy will function and serve individuals best. They downplay the possibility of coercion and institutional injustice in the shaping of economic activity and trends. Feminists on the other hand believe that there are deeply ingrained injustices in the functioning of society and the economy that disadvantage large sections of the population, specifically women. They also disagree with the realism of the assumptions underlying the workings of the economy the neoclassical view leads to. “More specifically, it is argued that the neoclassical assumptions devalue the contributions typically made by, and the traits traditionally deemed appropriate for, women, and valorize the contributions usually made by, and the traits normally associated with, men.” (Hewiston, 1999: 70). As well as focusing on the affect and limitations the mainstream neoclassical view has on women, feminists also show concern for the wider social justice implications of this economic perspective.
At the core of the neoclassical economic view is rational economic man. Because goods and services are limited and wants of individuals are infinite economic man must make decisions to maximize his utility with the means he has. In making these decisions neoclassical economics sees the individual as a selfish being making rational decisions based solely on cost benefit analysis. The idea that this decision making individual could be motivated by compassion or altruism is dismissed. “The assumptions underpinning this representation of the neoclassical economic agent have been deemed androcentric by some feminist economists on the grounds that such an agent is a selfish, radically separate individual divested of those traits and uninvolved in those activities traditionally associated with women” (Hewiston/1999: 20). As well as the individual supposedly only being motivated by traditionally masculine traits he is also assumed to be a separate being not dependent on others. “The agent is depicted as an autonomous male who enters contracts to produce a civilized society, even though he is in fact dependent upon the caring but invisible activities of women, who are confined to the devalued and uninteresting sphere of natural functions” (Hewiston/1999: 20). This theory of the individual is problematic to feminists because by viewing the individual as having only masculine traits in decision making it’s not only biased against female economic actors, but devalues feminine traits. It ignores the fact that individuals, men as well as women, may act in more caring, less self-interested ways. It also renders invisible the silent caring work being done in the household and in society in general, which largely affects women and not men. As much as it is irrational to exclude a whole spectrum of possible motivators of behaviour, the neoclassical view also fails to realize that there might be (or indeed, there is) value and worth in the very traits they don’t even consider. Because this skewed, illogical view of individuals as calculating and completely independent beings underlies the understanding of the economy for neoclassicalists it has far-reaching and serious implications for how the economy is managed.
“Feminist economists have also challenged the wisdom of assuming that rational economic man’s preferences are exogenous and stable” (Hewiston/1999: 71). The view of preferences as completely independently constructed and unaffiliated with wider society has been criticized by others as well as feminists. Marxists argue that “environmentally-induced changes in preferences have a major bearing on economic outcomes and hence must be the subject of study.” (Hewiston/1999: 72). Feminists have constructed alternate theories of preferences. For example, “Lee Levin presents a theory of investment that takes into account the feminist insight that knowledge is socially and emotionally constituted” (Nelson/1996: 122). A lot of feminist economics focuses more on the gendered aspect of preferences, arguing that “even if preferences are fixed, economists should be interested in the formation of gendered preferences” (Hewiston/1999: 72). Gender is a pervasive part of a person’s identity and feminists hold that gender is socially constructed. In this way a person’s preferences are affected by their identity and thus, by gender and by society. Sen “argues that individuals have preferences over their own identities as well as goods and services, but that these preferences are both produced and constrained by institutions of socialization in a male-dominated society (Hewiston/1999: 72). Like gender roles themselves, this constraint on the individual’s construction of preferences affects men as well as women. England “argues that the assumption of independent utility functions conceals men’s altruism as well as that of women.” (Hewiston/1999: 73). As I said earlier, the faults in an economic view that ignore gender and social constraints on individuals is as incorrect when discussing male economic actors as it is for female economic actors.
Another issue feminists have with neoclassical economics’ views on preferences is that of the family unit. While the individual is seen as a selfish actor that makes rational decisions, the family unity is assumed to function with every member selflessly working to better the family as unit and maximize the utility of the family as a whole. “Utility functions are assumed to be interdependent in the home because of the existence of a benevolent dictator (the market worker) who ensures that everyone acts in the best interest of the family” (Hewiston/1999: 73). The proposed altruistic nature of the family is not accepted by feminists. Apart from the fact that in today’s society the family takes many different forms and a lot of the time has both parents involved in market labour, “the dichotomy of self-interest in the market and altruism in the home is both unrealistic and hides the power which men derive from their access to market earnings” (Hewiston/1999: 74). If we accept the neoclassical view of rational economic man it would seem only logical to assume that each family member is self interested and thus would not be willing to put aside their personal preferences for the good of the family unit. Although feminists do not accept the view of rational economic man they still argue “joint utility function, which is meant to represent the preferences of the family members, cannot be used to address the question of unequal bargaining power within households consisting of individuals with unique preferences” (Hewiston/1999: 74).
There is also the question of the value given to domestic labour. Domestic labour and caring roles are largely ignored in neoclassical economics as it is not considered work. “The exclusion of unpaid work at home, work that historically has been largely done by women, from calculations of Gross Domestic Product (GDP) serves to make such work invisible” (Nelson/1996: 118). Because the neoclassical definition of ‘work’ is that of market labour, domestic work is not included. Feminists argue that domestic labour must be considered and assigned the value it deserves as it functions to reproduce and maintain the workforce for the market, if nothing else. However, even though considering domestic labour work is obviously desirable for the fact it renders it visible and gives it some value, it is also problematic because of the limited and masculine definition of work by neoclassical economics. “Valuing domestic activities as ‘work’ marginalized the personal, relational, self-fulfilling and caring aspects of these activities to the point where they are forced into the background” (Hewiston/1999:76). This highlights how fundamental the differences between the neoclassical and feminist perspectives of the economy are. It is possible, and indeed some feminists are of the view that, the neoclassical perspective is inherently flawed and patriarchal and so no reworking or critique of this perspective will be sufficient.
Neoclassical economics is centered around utility maximization. However, they do not believe it is possible to compare utility gained by one individual to that of another because one cannot know the utility a good or service brings another person. This logic is guilty of the same issue we have already talked about with regard to neoclassical economics. That is, it does not consider a more emotional, typically ‘feminine’ approach to the problem. “England argues that a more reasonable assumption is that individuals can make interpersonal utility comparisons by assuming ‘the sort of emotional connection that facilitates empathy [which would mean] being able to imagine how someone else feels in a given situation’.” (Hewiston/1999: 71). Although this method may be somewhat imprecise I fail to see how it could not be better than no method whatsoever. The main issue with not being able to compare utility is that one cannot compare and evaluate needs and wants of individuals. This means issues of entitlement are rendered moot. We can see here how a masculine economic perspective reinforces masculine priorities in the organization of the economy. Where as a feminine economic perspective, employing a more empathetic method of understanding, lends itself to priorities of social justice and compassion.
The assumption of neoclassical economics that the market is self-regulating and focus on economic growth as an end rather than a means has implications for social policy. “Rather than looking at the balance of social power, they look only at the impact of macroeconomic policy on the rate of growth of GNP and the implications of growth for poverty.” (Elson & Cagatay/2000: 1352). Macroeconomic policies tend to focus solely on the rate of growth of GNP or GDP as opposed to including what kind of production this growth is coming from and who it is benefiting. “While growth is an important prerequisite for elimination of poverty, it is not a sufficient condition (UNDP, 1998a). The nature of growth and how a society translates the fruits of growth into increased well-being of its citizens is also critical” (Elson & Cagatay/2000: 1353). From a feminist perspective economic growth is only the means to an end, the end being social justice and equality. This perspective differs in the weight it gives to economic growth in isolation and the social implications of this growth. While neoclassical economics values economic growth in and of itself, feminist economics values it only in so far as it serves to better the standard of living of people and equality in society. In other words, from a feminist perspective “ ‘soundness of macroeconomic policies would be judged not on market-based criteria per se, but in terms of whether they ultimately succeed in bringing societies closer to achieving social justice” (Elson & Cagatay/2000: 1348).
The prevalence of neoclassical economics has led us to a world characterized by open economies and privatization. This means that in a lot of cases economies “sustainability of fiscal deficits is dependent upon the behavior of lenders in international markets.” (Elson & Cagatay/2000: 1354). This means that governments must prioritize their credibility in global financial markets instead of the domestic social impacts of monetary policy. Despite the fact that “Unequal social relations can themselves hamper the achievement of sustainable and high rates of growth.” (Elson & Cagatay/2000: 1353), this is also and issue to those who are subject to or care about entitlement failure. “There is entitlement failure when a person cannot establish sufficient command over resources for an adequate standard of living” (Elson & Cagatay/2000: 1354). When governments are forced to impose austerity cuts due to concern for their credibility in international financial markets these entitlement failures increase. Sen’s main conclusion is that a concern for price stability and avoidance of high inflation (financial conservatism) does not rule out the expansion of public provision of health care, education and social security; and a concern for deficit reduction does not justify user fees for public services, irrespective of the effects of such fees on the well-being and freedom of the entire population, and more especially the effects on the poor.” (Elson & Cagatay/2000: 1353). This is a clear example of how the views of neoclassical economics that lead to differing priorities from feminist economics manifest themselves in the social problems and inequalities that feminism is concerned with.
In sum, we can see that neoclassical economics and feminist economics are vastly different. They differ in their basic assumptions on the individual level with regard to what motivates economic actors. They differ in their view of how an individual’s preferences are shaped and how preferences can be compared between individuals. They differ in their understanding of the functioning of a family as a unit and what constitutes valuable ‘work’. They also have alternative perspectives on the priorities of economic policy and the method that should be used to solve social problems such as poverty. All of these differences, however, can be understood as stemming from differing basic values.
Neoclassical economics is inherently biased towards not just women, but feminine traits and ideals. This perspective ignores the typically feminine traits of compassion, empathy and altruism when considering the individual economic actor. It assumes an economic actor is motivated by selfishness and masculine rationality. It devalues feminine traits in relation to economic utility, prizing only that which leads to greater individual profit maximization despite the negative consequences this tends to have for society. Also, in typical male supremacy, it ignores the patriarchy and general injustice and inequality ingrained in social and economic institutions and the effect this has on the economy. It also ignores the socially constructed aspects of individual’s identities and the bearing this has on their actions and preferences.
While this masculinist view obviously disadvantages women, it also disadvantages men. It paints a hard and incomplete picture of them. The reinforcement of economic policies that stimulate economic growth at the expense of social justice has the worst implications for the poorest and most vulnerable in society. Although this tends to have more of a bearing on women, the prioritisation of money over people affects everyone, men included. All in all apart from being unjust and leading to the reproduction of injustice in society, neoclassical economics is also based on inaccurate and incomplete assumptions. Feminist perspectives on the economy critique these inaccuracies and seek to compose a more complete view of the economy. They attempt to do this not just by focusing on women but by including and reevaluating feminine traits such as compassion and empathy and the priorities of social justice and entitlement that these lead to.
References
Elson & Cagatay, 2000, “The Social Content of Macroeconomic Policies”, United Nations Development Programme, New York and University of Machester, Uk, New York and University of Utah, Salt Lake City, USA, Elsevier Science Ltd
Hewiston, 1999, Feminist Economics: Interrogating the Masculinity of Rational Economic Man, Cheltenham, UK, Edward Elgar Publishing Ltd.
Nelson, Julie A., 1996, Feminism, Objectivity and Economics, London, Routledge
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