Liberty Matters
The Road to Sociology has Promises and Pitfalls
The lead essay states:
There are many reasons we need feminist economics. First, we need to understand why economics per se, i.e. standard economics, was unable to provide a complete and realistic explanation of the phenomenon of gender inequality. Second, we need feminist economics in order to better know the origin and the nature of gender inequality within the economy and how to possibly overcome it. Furthermore, we need feminist economics in order to better comprehend feminism as well as economics and the way they have been interconnected at a certain point, roughly forty years ago. We need feminist economics to solve the present gender economic inequality.
The quoted paragraph, and the essay more broadly, serve as a reminder of the observation that I have made over the past several years that economics is on the road to sociology. This is by no means exclusive to feminist economics. For example, Steve Levitt, a Clark Medal winner within the economics profession and famous to the general public through the book Freakonomics, has studied questions that are primarily of interest to sociologists, and he has not relied heavily, if at all, on what the lead essay refers to as standard economics.
In many ways, this “road to sociology,” as I term it, is a desirable one for economists to take. I suspect that many phenomena that puzzle economists, including changes in the rate of productivity growth, macroeconomic fluctuations in employment and inflation, momentum in financial markets, and changes in organizational behavior within businesses, cannot be understood using standard economic models alone. If some of the mathematical rigor has to be discarded in favor of softer, more speculative analysis, then so be it.
Such is the promise of the “road to sociology.” But there are pitfalls. Sociology itself, as currently practiced as an academic discipline, is characterized by stifling methodological and ideological rigidity. If economists come to conform to the same methodological and ideological strictures, I would view that as a tragic outcome. I fear that feminist economics as described in the lead essay could all too easily land in this pit.
Standard economics, as I see it, seeks to explain social outcomes as the result of the mathematically determinate equilibrium generated by the interaction between agents, each of whom is optimizing relative to their individual preferences subject to resource constraints and incentives provided by government policies. If there is a normative objective of standard economics, it is to demonstrate that a better outcome by some measure of social welfare could be achieved by changes to government spending, taxes, or regulation.
Sociology, as I see it, seeks to explain social outcomes as the result of the set of social norms that has arisen. Contemporary sociologists tend to have a predisposition that social norms primarily reflect power relations, and in that sense the discipline appears to me nowadays to be marinated in Marxism. The Marxist sociologists' normative goal is to expose and reconfigure those power relations. When I encounter the sentence “We need feminist economics to solve the present gender inequality,” it strikes me as fitting in with this normative paradigm of addressing power relations. It certainly fits better with that paradigm than with the social-welfare optimization normative paradigm of standard economics.
Standard economics has a blind spot with respect to social norms. I see Gary Becker as trying to address this by stuffing social norms into the individual utility function. This has the virtue of allowing economists to use their mathematical tools and equilibrium concepts to offer explanations and predictions concerning sociological topics, such as division of labor within the family. The lead essay criticizes this approach, and I find that such criticism is justified. In my view, the Becker approach ends up as question-begging. If we are going to examine norms, we want to know how these particular norms got into the utility function, as opposed to some other norms. Similarly, an approach that would treat social norms as analogous to government policies, as part of the incentive structure, is no more likely to prove satisfying, in my view.
Contemporary sociology has a blind spot with respect to social norms that represent something other than power relations. Being confined to Marxist explanations is as restrictive and unsatisfying as being confined to standard economic explanations. In fact, this approach comes dangerously close to simply treating social norms as analogous to government policies, as part of the incentive structure.
What concerns me about the lead essay is that it appears to say that in order to study gender outcomes we face the either-or choice of relying on standard economics or Marxist-style sociology. In the example of gender inequality of salaries within the profession of academic economics, the essay asserts that:
According to standard economics the gap is the effect of women’s free choice. Conversely, feminist economics claims that the gap is the effect of gender discrimination....They are two opposite ways of considering this specific kind of gender inequality. Any social phenomenon has many possible causes and correlations...
What I would like to have seen in the lead essay is more discussion that addresses these “many possible causes and correlations.” I do not want to return to the “old-time religion” of standard economics, which ends up dealing with social norms by trying to stuff them into utility functions. But neither do I want to be forced to rely on Marxist sociology, seeing power relations, exploitation, and repression everywhere.
Neither standard economics nor Marxist sociology has anything to say about the phenomenon of social norms evolving. If standard economics takes the status quo as given while Marxist sociology takes the status quo as inequitable, neither has anything to say about the process by which norms change over time.
In fact, one of the most striking things about gender roles and gender relations in modern societies is the rapid pace of change. We went from a predominantly male student body in higher education in the early 1960s, with most Ivy League universities admitting zero women, to today's enrollment ratio in college that is over 60 percent female and less than 40 percent male. The female share of the labor force has risen sharply. Practices concerning premarital sex, divorce, and child-bearing have changed dramatically.
What caused all of these changes? What economic impacts did they have? How did they reshape society? How might gender norms continue to evolve going forward?
These questions strike me as interesting and important. I see neither standard economics nor Marxist sociology raising them, much less proposing interesting answers.
Toward the end, the essay raises the issue of freedom, and whether standard economics and classical liberalism are conducive to freedom. For me, this poses challenging philosophical questions. In standard economics, freedom is relatively easy to define. But once we get away from the individualistic paradigm and acknowledge the importance of social norms, the situation becomes less clear, as the lead essay points out.
Do social norms enhance freedom? Or do they restrict freedom? If there are easy answers to such questions, I do not have them.
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