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Leontief
Prize
Remarks
by Nancy Folbre
on occasion of her receipt of the Leontief Prize
at Tufts University, on April 8, 2004
Thank you so much. It is a great honor
to be here with such fine company and I really look
forward to the chance to share some ideas and engage
in some back and forth about them today.
In our search for a common theme for this event we
settled on the metaphor of the Rat Race, and my particular
task is to talk about what feminist economics and
ideas about gender and care might add to our understanding
of said Rat Race.
I thought I would start with what I consider to bey
the coat-of-arms of my economics department at UMASS
UMass Amherst. We do a department T-shirt every year
and I am usually the person in charge of the T-shirt
design. This is the one that best captures the spirit
of our enterprise. You may have heard the expression
before “de gustibus non est disputandumbutandem.”
Sorry, my Latin is not top notch, but what that saying
means is there is no arguing about tastes. It’s
a motto that really expresses in my opinion the limitations
of standard mainstream economics, which often takes
tastes and preferences as a given rather than asking
where they come from or what their implications are.
So the alternative slogan at UMASS Amherst is “de
omnibus disputandumdis butandem” -- which you
don’t need to know too much Latin to figure
out that means argue about everything. Which is really
what we try to do and also try to advance the tradition
of thinking about the invisible heart, multi-cultural
diversity, and bread and roses all in one fell swoop.
What I am going to do today is address four questions.
The first overlaps substantially with what Bob is
going to talk about but I thought I should give you
my take on it so you can kind of calibrate the two
of us. The second one, a little intellectual history,
maybe a little competitive itself, who thought of
this first? I think there is a long and interesting
intellectual history here that we need to honor and
respect and appropriate. Then I’ll talk a little
bit about how gender affects competition. I am interested
here in some ideas that many feminists would consider
somewhat renegade ideas. Thinking a little bit about
evolutionary biology and what it might tell us about
these dynamics and how it fits in with game theory
which is, as you may know, very fashionable today
in economics. Finally, what are the implications for
the care sector of the economy? By the care sector
I mean the work that involves worrying about other
people and caring about their welfare and interacting
with them in a personal or emotional way.
Okay, why shouldn’t rats race? Well, I of course
had to do a Google image search on the rat race to
see what I could find. I found a great image from
a behavioral neurologist in Britain who stole this
cartoon from somebody and I’m politely borrowing
it from him. It is this really nice image of what
we mean when we talk about a rat race, which is sort
of getting caught up in this idea that happiness is
just around the corner. Just work a little harder
just, earn a little more money. We’re not happy
yet but we’re almost happy, we’re on the
verge of being happy. There’s happiness, where
is it? Oh, keep going! It is just a sense that the
final destination does tend to elude us. I found an
image that better conveys the sense of anxiety that
we sometimes worry about in our society,; in which,
economic competition really has become a kind of arbiter
of personal success in ways that many people find
culturally troubling. I think Bob Frank was really
in the vanguard of efforts to call attention to the
psychological dynamics that might be underway here.
Lately this idea has really caught on. Greg Easterbrook,
a very mainstream journalist, writing for Newsweek
has a new book out about the evidence that money doesn’t
buy happiness. William Grieder, in his new book “The
Soul of Capitalism,” which I think is a very
good book, addresses this issue at length in an interesting
way.
To me the economic event that is real, calling attention
to some of the apprehensions we have about the rat
race, is the concern about outsourcing of the jobs
of highly educated professionals and managers. We’ve
been seeing job losses in the manufacturing sector
of the US economy as a result of intensified international
competition for many years, but we’ve all thought
that we’ve inoculated ourselves against this
by obtaining a higher education. Basically, affluent,
well-educated, individuals haven’t had to worry
too much about international competition until recently.
There is a slight sense of panic now that has emerged
that is best appreciated by watching Lou Dobbs on
CNN. I don’t know if any of you have picked
up on this; but a Republican, mainstream news analyst
is now obsessed with the idea that competition is
worsening the bargaining position of highly educated
American workers. I think this is a really interesting
indicator that I think concerns about the effects
of competition are very much coming into public debate
and are going to continue to be there.
If I were going to summarize my answer to this question,
I would say that there is actually nothing wrong with
a race. I think races are good and that a certain
amount of competition is very healthy. But, there
are a lot of reasons to believe that the level of
competition, if becomes too intense, in certain circumstances
can have very adverse effects. Here are the reasons
why. People can misperceive the costs and benefits.
They can get so caught up in their position vis-à-vis
other people that they become less mindful of what
really is in their best interest in terms of becoming
happy people. The traditional confidence that economists
have that people know what they want and all they
have to do is figure out how to get it, is being shaken
by a lot of interesting results. Not just surveys
but also experimental results that show that in fact,
there isn’t a very strong link between money
and a sense of subjective well-being. There are also
some really big coordination problems that emerge
irrespective of what you think about the behavioral
psychology involved. People all competing with one
another can lead to outcomes that leave everybody
worse off. The simple example is, everybody at the
football game stands up, they’re no better off
then when everybody was sitting down, but you can’t
sit down because everybody else is standing up. I
can’t say more about this because Bob is much
better at talking about this issue than I could ever
hope to be. The idea is that winner-take-all outcomes
and competitive games can be socially inefficient.
The ideas that link to this that I am more engaged
with have to do with the relationship between extrinsic
rewards, which are usually what competition is about,
and intrinsic motivation. Economists have always recognized
the importance of these two types of motivation but
pay a lot more attention to the extrinsic part because
the intrinsic part is that part that is embedded in
tastes and preferences in the utility function. What
it is that people really want, economists have not
really thought about a lot. But there is this really
interesting literature in institutional economics
in examining the technical characteristics of certain
jobs that require intrinsic motivation. Where it’s
really hard to monitor the performance of a worker,
where it’s hard to tell who is winning and who
is not, or where a team is playing rather than an
individual and it’s hard to tell which of the
players deserves the credit for the team’s success.
These are all situations where intrinsic motivation
turns out to be much more important than extrinsic
motivation. In care work that involves taking care
of little kids, or elderly people or people who are
sick or are unable to protect themselves, to defend
themselves and don’t have consumer sovereignty;
that intrinsic motivation is really crucial. A lot
of forms of competition for extrinsic reward can have,
that don’t always have but they can have, the
effect of undermining or weakening that intrinsic
motivation. That is something we do need to be concerned
about. But, let’s not put the whole argument
in instrumental terms. I think intrinsic motivation
also has intrinsic merit. It’s something that
we believe in as part of being human, to have not
just preferences but values and to act on those in
healthy ways.
Now, a little bit of a detour into intellectual history,
because these are the ideas that got me interested
in political economy in the first place. The early
socialist feminists, sometimes mistakenly called the
utopian socialists, were really very much onto the
idea that the emerging capitalist system was setting
up some competitive dynamics that had some adverse
effects. This is precisely why they were so interested
in setting up and experimenting with alternative community
forms and trying to understand the laws of motion
of capitalism as a system. Now my favorite of these
is a somewhat obscure fellow, William Thompson, who
wrote a brilliant feminist tract in 1825 “Appeal
of one half the human race Women against the pretensions
of the other half, Men to retain them in political
and thence civil and domestic slavery” the title
of which tells you pretty much what the analysis was.
But it was not just a brilliant attack on the liberal
theory that the interests of women and mothers were
perfectly represented by their fathers and husbands,
it was much more than that. It was more an analysis
of how an economic system based on individual competition
was always going to penalize people who couldn’t
fend for themselves. Children, the elderly, the sick,
the indigent, and anybody who took time-out from the
rat race to care for them would also be penalized.
That was really William Thompson’s vision of
what the limitations of the capitalist system were.
This is the vision that Robert Owen and the later
socialists really built on, often I think in misguided
and mistaken ways, but guided by this kind of vision
of the connection between competition and care.
It’s not just the Marxist tradition; there
is a great institutionalist tradition. If you look
back at the work of two best economists the United
States ever produced, Thorstenon Veblin Veblen and
Charlotte Perkins Gilman. They were both fascinated
with what they saw as excessive consumerism and competition
and emulation.
VeblinVeblen believed that a group of highly educated
professionals would finally lose patience with an
economic system that didn’t really value quality
and craftsmanship but was purely driven by market
dynamics. I think if Thorsten Veblin Veblen were around
today, he would be cheering on the software engineers
and computer science graduates who are on the rampage
about the impact of international competition on outsourcing.
It’s very consistent with his concerns.
Charlotte Perkins Gilman is so ignored by economists
but her book “Women and Economics,” published
around 1900, is just a very incisive analysis of gender
and the economic system. Gilman was also very much
influenced by Darwin and wrote a lot about what the
implications of evolutionary biology were for her
understanding of changes in gender roles that were
taking place in the economic system. So she is my
bridge to talking about what I think some of those
important insights are today. In the last 20 years
in particular, there has been a renaissance of thinking
in evolutionary biology that has really challenged
some traditional interpretations of that Darwinian
model of competition in ways that I think are really
important for economists to understand.
The two basic points that I would emphasize are that
in social species, the individual pursuit of self-interest
is mediated by competition among groups, which requires
solidarity or group identification. Now, whether you
interpret that in biological terms or in terms of
cultural evolution or conflict, the idea is that in
an ecosystem that involves social species often it’s
teams that are competing with each other. In order
for teams to be successful, the individuals have to
willing to sacrifice some of their individual self-interest
on behalf of the team. So the more successful team
is the one in which individuals have their own personal
ego under control. Now economists have always been
skeptical of the very notion that individuals would
develop allegiance or solidarity with groups and have
argued that that is a solidarity that will inevitably
be undermined by free rider problems. Now there is
this growing literature, for instance George Ackerlof
writes about identity and how people identify with
others that resemble them. There is a literature in
cognitive psychology about the little signals that
people pick up about who resembles them and who doesn’t
and how much more likely they are to cooperate in
experimental situations with people that resemble
them physically. There is also this tremendous accumulation
of evidence about what is called strong reciprocity,
which is basically a tendency that human beings have
to insist on some basic standards of reciprocal exchange
and to punish individuals, even individuals they don’t
know, who violate these principles of reciprocal exchange.
The experiment that has been used in many countries
to demonstrate this behavioral predisposition is called
“the ultimatum game”. In other words,
there is now this literature showing that forms of
competition differ and that they don’t really
fit that hobbesian Hobbesian model of the war of all
against all. Competition is actually a lot more complicated
than we thought.
So here’s where the evolutionary biology comes
in, in a really interesting way. One of the main reasons
that feminist theorists have always been hostile to
evolutionary biology is that they’ve seen it
as a deterministic model that suggests that differences
between men and women are hard wired and therefore
you can’t change them. The use of evolutionary
biology is often interpreted as a conservative response
to the claim that gender roles are more malleable
than they should be. But I think that situation has
kind of flipped. Now I would say we understand biology
and physiology better than we understand the way social
and cultural norms affect us. We can take pills, we
can inject ourselves, and we are better able to change
our physiology than we are at changing our acculturation.
So that argument no longer holds. Actually, it would
be a lot easier if some difference between men and
women were biological in nature than if they were
culturally designed, precisely for that the reason
that biology is now a little bit more under our control.
Don’t get me wrongwrong; I’m not arguing
that we should be taking pills here. I just want to
open your mind up to these really interesting findings
about behavioral differences between males and females
that have evolved over time.
Especially but not exclusively in mammals, what evolutionary
biologists point to as a significant difference between
males and females is the level of investment they
have in offspring. The females are starting out with
a small number of very expensive ova that they have
to take good care of in order to make effective use
of them. Males are starting out with an almost infinite
supply of very cheap sperm that they need to find
a home for. So both males and females are competing,
but the nature of their competition varies. Male competition
is loaded up front. The really important success for
the male is mating success. You have to find a female
to mate with that can provide that expensive egg for
your sperm to combine with, otherwise you’re
not going to make it. You’re not going to reproduce
your genes in the long run. So early success is really
important and mating success is more important than
parenting success. For females the dynamics work the
other way. It’s not very hard to find a mate.
There is a large supply of males who would really
like to share some sweet little sperms. What’s
really hard is getting the resources, particularly
from opportunistic males, to stick around for the
30 some-odd years it takes to get that little embryo
out of college.
This sets up all sorts of game theoretic strategies
that are relevant to understanding male-female behavior.
In particular, women are much more vulnerable to threats
of abandonment than males are. They need help from
the father of their offspring to raise that offspring
to maturity. The threat to abandon is a much more
credible threat on the male part than on the female
part. So you can model this as a chicken game. The
original chicken game was two guys in hotrods driving
towards each other at top speed at midnight on a dirt
road. The one who swerves first is the chicken and
the one who refuses to swerve is the winner of the
game. The problem of course is that if neither of
the players swerves, they are both extinct.
Think of the chicken game as this: a mother and father
of a newborn infant are lying in bed and the baby
starts crying. What is your optimal strategy? If you
studied economics you know, it is to pretend you’re
asleep. If you pretend you’re asleep the other
person will get up and take care of the baby. If you
pretend to be asleep then you get to enjoy the luxury
of the bed and the baby gets taken care of. But then
what happens if both parents pretend to be asleep?
Then the baby becomes sick or worse. The question
is, which of those people is more worried about the
possibility that by both people opting out the consequence
will be negative for the child. If the female is more
concerned about the ultimate outcome to the child
than the male is then she will be more likely to get
up and take care of the infant. She will be more likely
to swerve than to crash, in short. If you then throw
into that model some endogenous preferences --. Namelynamely,
women may start out more bonded to an infant and because
they spend more time caring for an infant and become
more attached to the child,-- then the story complicates
even further. Then the relative bargaining position
of mother and father diverge even more radically.
I think a really great image of this comes from the
many illustrations of the rape of the Sabine women
that you can find in European art. It is a really
great story that Plutarch tells a historical account
of the founding of Rome. These two guys Romulus and
Remus, their they’re born, the get abandoned
by their mother, they are suckled by a she-wolf, they
grow up and found the city of Rome with a band of
brothers but they can’t find any women. They
know they can’t create a city without women.
None of the families in the surrounding countryside
will allow them to court their daughters. So the Romans
hold a big party and a set of competitions. They invite
all of their neighbors including the Sabines to come,
but it’s a trap. When they come with all their
young women dressed in party clothes to have a good
time, the Romans are ready. The Romans take the women,
marry them immediately, rape them and many of the
women quickly become pregnant. By the time the Sabines
come back prepared for battle, a lot of these women
have already given birth. Just before the battle begins
the women run out on the battlefield. And they say,
“stop, we do not want our fathers fighting with
the fathers of our children!”
“You must stop, you have to except accept this.
The well-being of our children is more important than
the honor of our family.”
It’s a tremendous historical summary of the
difference in male and female interests, in the relative
importance of war and child rearing, and has really
important implications for understanding things as
relatively mundane as care-work. So a lot of women
specialize in the work of providing care,. Wwhether
its unpaid work in the home or in the paid sector,
nursing, education or healthcare. These are jobs that
involve the care and nurturance of other people. These
are all jobs in which it’s very hard to define
performance. It’s very hard to have a race.
It’s very hard to say, “Who is the best
mother here? Okay, five minutes, we’ll see who
gets over the finish line first.” You can’t
really do it, you can’t really organize a competition
for most forms of care because the outcomes are so
complicates and variable and person specific. Organizing
those forms of work according to a competitive logic
creates a lot of problems; I think it’s likely
to cause adverse effects. Another way to think about
it is; it’s very difficult to race if you’re
carrying a child under your arm. The more competitive
the race, the more pressure there is for the winners
to be unencumbered. In order to be unencumbered in
a modern economic system, you have to offload your
responsibilities for care. And if you can’t
offload them onto women, you have to offload them
onto other people who are hired to take their place,
usually also women.
The reason this is so relevant is, you see today
so many economists prescribing performance-based incentives
as a way to improve productivity. This is how most
people explain the corporate accounting fraud that
has become so epic in the last few years: it that
performance- driven incentives for managers, paying
them in terms of stock options created incentives
to cheapcheat. The whole process in a sense backfired,
because instead of eliciting more effort, which was
the original idea that Michael Jensen came up with
when he suggested that managers should be paid with
stock options, it tipped over to the other side, to
the negative side of competitive effects and created
some perverse incentives for fraud. There are likewise
some perverse incentives that are built into a lot
of suggestions that have been made by conservatives
to change family policy or to change the organization
of the care sector. My favorite example is linking
teachers’ pay to test scores. Sure you can do
that. Student testing has become the growth industry
of the century. Especially with the No Child Left
Behind Act we’ve had this proliferation of testing
as a way of measuring the performance of teachers.
And it does measure some aspects of the performance
of teachers, but what it doesn’t measure is
that intrinsic motivation that teachers have to really
create a community of learners and to instill preferences
in their students for problem solving. What it does
is it creates incentives for teachers to teach to
the test, to convey simplistic forms of information
and to provide this easily quantifiable result. I
think it’s a very misplaced emphasis that leads
to some very negative effects.
You may not of heard of these two other strategies
that family policy mavens have come up with. James
Coleman, who’s is a sociologists that both Bob
Frank and I are very fond of because of his analysis
of social capital. One of the proposals he made early
on in his work was that the problem with parenting
was that there were no performance-based incentives.
Why try hard to do a good job in raising your kid
if there’s no money in it? How do you do that?
Well, you benchmark the children and predict how likely
they are to succeed given their IQ and zip code and
things likely that. And if the parents exceed that
expectation then you give them a bonus for their behavior.
I would say that that might have a few perverse incentives
for parental behavior.
Shirley Bergrath, who’s written a lot on Social
Security, makes the a point that I agree with, that
Social Security redistributes money from parents to
non-parents. People get the same ratio of Social Security
benefits to wages whether they’ve raised five
kids or none. But the parents are spending a lot of
their time and wages creating the next generation
of workers that are paying the taxes that are then
funding those benefits. So if you factor parental
expenditures of time and money into the whole equation,
Social Security is having this tremendous redistributive
effect. Well, surely a solution to that problem is
just to get rid of Social Security. Give parents a
claim on their children’s earnings instead of
the whole entire younger generations earnings. Then
parents would really have a great incentive to send
their children to Business School. That might be a
good thing but it might not.
Races are good, we like to race, competition is fine
but the race needs to be put in its place. We need
to have good rules for the race. The problem with
the rat race is that it’s designed by this diabolical
scientist who’s just trying to drive the rats
crazy. The rats need to design their own race; we
need to take control of our on race. That’s
where I’ll end. Rodents of the world unite.
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