I have a new article in Quartz, about Gary Becker's theory of discrimination, and how it might explain some of women's remarkable economic advances in recent years:
Becker thought that competition kills discrimination. Open up the floodgates of dog-eat-dog capitalism, and women and minorities will win greater equality in the workplace...If you’ve ever marveled at the progress women have made in the US economy, you can’t help but be intrigued by this story...
How credible is this explanation? As with all long-term macroeconomic phenomena, it’s not clear. A number of studies do support the Becker theory. A 1999 study by Sandra Black of the New York Fed concluded that deregulation and globalization probably contributed to a reduction in gender discrimination in the manufacturing and banking industries. And a detailed 2013 study by a team of Swedish economists found that corporate takeovers reduced the gender wage gap, especially in industries where competition was weak. Meanwhile, a 2014 paper by Andrea Weber and Christine Zulehner found that firms that discriminate against women tend to be outcompeted by firms that are fair to women. There is also evidence that increased competition and deregulation have reduced the racial wage gap...
In the end, bigotry doesn’t pay.
I also declare that this makes Mike Milken the most important feminist in American history. Read the whole thing here!
(I was almost certainly too harsh on Mike Milken, whom I not only admire for his feats of financial innovation, but who in recent years has shown himself to be a really good guy, and somewhat of an actual feminist to boot.)
It can be seen as a positive or a negative, but globalization is destroying all kinds of national structures: legal traditions (free-trade policies), demographics (immigration/labor mobility), polities (access to international media), culture, the economic balance between labor and capital, and lots of other things . Patriarchy was a dominant social paradigm of the national era, but globalization is destroying it as well. Women generally seem to do better if any kind of previous order is destroyed (through deregulation, globalization or corporate takeovers). If I may take that argument to the extreme, it's not necessarily the simple presence of women that makes companies perform better, it's the other way round. Companies that refuse to elevate women probably also try to resist market forces and are more prone to stagnation.
ReplyDelete"Women generally seem to do better if any kind of previous order is destroyed"
DeleteLook how women are doing so well in northern Nigeria with Boko Haram destroying the previous order.
The beautiful Elizabeth Vigee-Lebrun, who had been court painter to Marie Antoinette, considered that question in her autobiography in the 1830s. Her long life showed her that women did better under the settled Old Regime, where feminine virtues were more prized, than under the more militarized and masculinized culture that followed 1789.
Milken's allies in LBO game, for example, were notoriously more sexist, more cigar-smoking, whore-chasing chauvinist pigs, than the CEOs they overthrew.
DeleteWow, Steve, you just demolished his "generally" point with two anecdotes. Well done!
DeleteKeep fighting the good fight until you have forced everyone to adopt the same preferences you have.
crime doesn't discriminate on race or gender
ReplyDeleteLibertarianism doesn't discriminate on the basis of reality.
DeleteI'm not sure if it is really dog eat dog capitalism. Could be the freedom "from" religion and superstition.
ReplyDeleteThis recent piece from the NY TImes I think suggests a way that Becker's view can't completely eliminate workplace discrimination:
ReplyDeletehttp://www.nytimes.com/2014/05/07/opinion/only-minorities-need-apply.html?_r=0
This is why I will always prefer a female job candidate over any equally qualified male candidate. The woman is just more likely to have been discriminated against and the end result would mean that the woman of equal qualifications would need to have been superior to achieve the same resume as any man.
ReplyDeleteIt is a rough heuristic that a person could use to take advantage of an aggregate bias. When in doubt hire/promote the woman and the benefit will likely accrue over time to any organization.
In theory, discrimination should lead to segregation of the workforce with no pay gap. In reality, we did see some segregation along some dimensions, but we also had a sizeable and persistent pay gap that's pretty hard to explain with models of competitive firms. So, something is not quite right with the theory--powerful social norms clearly made pay differentials far more profitable than they should have been.
ReplyDelete