Feminist Economics: Beyond the Market

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Our Children, Ourselves Economics and Family
Policy
Nancy Folbre Department of Economics University
of Massachusetts Amherst
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Australian football clear rules, strong
umpires, easy to keep score
Global economic system unclear rules, weak
umpires, flawed score-keeping.
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We need
1. A better accounting system for non-market
resources. 2. A better understanding of the
logic of patriarchal capitalism. 3. A better
long-run family policy.
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Conventional Accounting
Gross Domestic Product or GDP The Total Value
of Goods and Services Produced For Sale Within a
Country
The System of National Accounts or SNA focuses on
market transactions between households,
businesses and governments.
The Circular Flow
income
BUSINESSES
HOUSEHOLDS
expenditures
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Who Pays for the Kids?
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A Circular Flow Also Takes Place Within
Households
money
MOTHERS
FATHERS
time
time
money

CHILDREN
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Intrafamily Transfers
The motives behind these transfers differ from
those behind most market transactions. They are
not merely exchanges but involve both gifts
and obligations. They are less influenced by
self-interest and more influenced by altruism.
They are directly shaped by patriarchal
constraints. Yet this non-capitalist realm
has significant consequences for the capitalist
economy.
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Measuring Non-Market Work
Australians have pioneered collection and
analysis of time use data. Australian Bureau of
Statistics surveys of 1992 and 1997 important
models for other countries. On non-market work
devoted to care of dependents, see especially the
work of Duncan Ironmonger, Michael Bittman and
Lyn Craig.
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Valuing Children?
There is NO way to assign an EXACT value to
non-market work. All we can estimate is a lower
bound. But the non-market economy is not just
about LABOR. Parents and other family members
spend money as well as time. Children grow up to
become workers, taxpayers, and parents
themselves capital assets. One estimate of
their economic value is the estimated net present
value of their future earnings, which is
substantially greater, on average, than what is
spent on them. Alternatively, one can measure
their future value to the state by measuring the
net present value of their net lifetime taxes.
Children represent social goods.
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The Environmental Analogy
Environmental assets (such as forests and fish)
and services (such as waste absorption and a
stable climate) are not produced in order to be
sold on the market. The value of these assets
and services can be approximated by the cost of
available substitutes for them.
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The Android Analogy
Imagine that corporations do not hire workers but
purchase androids, which require new batteries
every week. The purchase price of an android
would be at least as high as the costs of
producing that android. But what if some people
were willing to produce androids for free,
because they enjoyed doing so? Then employers
would need only pay for the batteries that the
androids require to operate wages
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The Complete Circular Flow
Red arrows market Green arrows
family/community Blue arrows
spillovers/transfers to both nature and community
HOUSEHOLDS
BUSINESSES
GOVERNMENT
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Some Implications
Economic growth is mismeasuredoverstated in some
areas, understated in others. Important analogies
with environmental economics. Spending on
childrenboth private and publicshould be
considered investment, not consumption. An
accurate analysis of the net impact of taxes and
government spending would take into account their
effect on intra-family transfers. Higher taxes
are partly countervailed by reductions in the
amount that working- age adults privately
transfer to children and other dependents. Both
immigration and outsourcing/offshoring represent
transfers of human capital with far more
significant implications for economic growth and
welfare than suggested by conventional accounting
frameworks.
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Patriarchal Capitalism
Individual choices take place within the context
of modes of production structures of
constraint or social-family
contracts Though concepts such as patriarchy
and capitalism are highly stylized, they offer
insights into underlying structural dynamics
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Origins of Patriarchal Systems
Greater female investment in offspring makes
them susceptible to threat of abandonment. Men
benefit from control over womens reproductive
capacity. Patriarchal property rights encourage
high fertility and population growth, factors
that contribute to group success in certain
environments.
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Capitalism Slowly Weakens Patriarchy
.
Wage employment is based on individual market
work, not family work
Both wage employment and fertility decline
empower women.
Women engage in collective political action.
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but Remains Dependent on It
Caring for dependents cannot be completely
shifted to the market. Family wage rules
reinforce traditional gender norms and encourage
breadwinner/homemaker family. The welfare
state socializes at least some of the costs of
caring for dependents. The nation-state takes
on many of the responsibilities of the family
education, old-age security, and most recently,
explicit subsidies for parents.
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Capitalism Represents Itself as Masculine
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And the Nanny State as Feminine
Women are offered an unpleasant choice either
take on disproportionate responsibilities for
care, or dont commit to caring relationships.
Meanwhile, competition among countries (and
regions), as well as firms, create pressures to
lower the cost of care. Welfare states are
described as soft, weak, and uncompetitive.
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Family Policy A Neoliberal Dilemma
Capitalism needs families but would prefer not to
pay for them. Coordination problem how to
prevent free-riding? Note analogy with natural
environment e.g. capitalism needs a stable
climate, but would prefer not to pay for that
either. Globalization is intensifying these
pressures.
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Responses Vary Across Countries
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Changes in Gender Norms?
Are men willing to take on more responsibility
for the care of children and other
dependents? Will men who take on such
responsibilities be able to compete successfully
with those who dont? Will gender inequality
simply be replaced by inequality between
those who take on responsibilities for care and
those who dont?
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Efforts to Increase Fertility
More explicit in Australia, Japan, and Korea than
elsewhere in the world plus important public
debate concerning connection between gender
equality and pro-family policies. See
excellent recent report of the Australian Human
Rights and Equal Opportunity Commission, Striking
the Balance Women, Men, Work and Family. More
public support for childrearing yes!
But. Australian policies seem more closely
driven by electoral strategies and pressures than
a clear economic analysis. Emphasis on
short-term, visible incentives, such as the
maternity payment. Children are a more than
twenty-year commitmentincreased benefits now
could easily be neutralized by future tax
increases or costse.g. increase in cost of
university.
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Questions about Australian Family Policy
What percentage of total investments in children
will be private, what percentage public?
What percentage of total investments will be
paid by mothers, compared to fathers (including
analysis of foregone market earnings and leisure
time)? How will both the investments and the
returns to Investments in children be
distributed across class/racial/ethnic lines as
well as gender? What is value of the human
capital to be provided by anticipated future
streams of immigrants? (How will citizenship
affect the distribution of the costs and benefits
of investments in children?) Note that
conventional economic theory is not well-equipped
to answer these questions, which is why we need
to improve upon it.
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In the Long Run
We need to ask how the costs and benefits of
investments in children SHOULD be distributed
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International Association for Feminist Economics
July 7-9, 2006
http//www.iaffe.org
For more info contact Gabrielle
Meagher University of Sydney G.Meagher_at_econ.usyd.e
du.au