Business & Economics

Diversity in economics

Carola Binder

Bank of England Governor Mark Carney, in an interview earlier this month, pointed out that there are no women on the Monetary Policy Committee (MPC). There also happen to be no female ministers in the Treasury. Carney suggested,

“What we have to do at the Bank of England is grow top female economists all the way through the ranks. That adds to the diversity in macroeconomic thinking, it adds to qualified candidates for the MPC including qualified candidates to be a future governor.”

This seems like a reasonable message, but Philip Booth at the Institute of Economic Affairs wonders “why Osborne and Cameron are not hauling Carney in for a dressing down.” He makes a deeply confusing comparison between Carney and Larry Summers, and then adds:

“It is worth noting that I am quite comfortable with the idea that the sexes are complementary and that, in any business, social or family situation, they may (on average) bring different characteristics to the table. However, if Carney holds this position, there are some interesting conclusions because, if it is accepted that women (on average) might exhibit certain skills in greater preponderance than men, then the opposite may have to be accepted too. But, let’s move on…”

Before moving on, though, what are these “interesting” conclusions? If men do exhibit certain skills (like passive-aggressive ellipses usage) in greater preponderance than women, do we really know that each of these man-skills are beneficial for monetary policymaking?

Booth writes, “Surely, there can only be two reasons [for Carney's remarks] – that Carney believes that there are intrinsic differences between the ways in which men and women reason and assess evidence or that their social experiences are different from those of men who have similar career patterns.”

Really, can these be the only two reasons? Isn’t it also plausible that Carney thinks the lack of women on the MPC is a sign that some qualified candidates are, for various and perhaps subtle reasons, not making it into or up the ranks, and that excluding part of a talent pool is a generally bad idea? It is not just that the social experiences are different for men and women who have similar career patterns — different social experiences also lead men and women to having different career patterns.

Does Booth himself think that it is just a big coincidence that there are zero women out of nine on the committee? Surely his manly math skills are good enough that he doesn’t chalk that up to random chance. So even though Booth is chiding Carney for implying that men and women are intrinsically different, he seems to be working off of some “interesting” assumptions himself.

Next, Booth manages to list eight female economists, but doesn’t personally think that any of them would add diversity to the MPC. He thinks Gillian Tett might add diversity to the group, “but it is the fact that she is an anthropologist that ensures that her views add diversity, not the fact that she is a woman.” (In fact, a survey of 400 economists documents notable differences of opinion between the genders.) Then he gets to the most telling paragraph:

“It does not follow that adding those women who choose to become economists to a group of male economists adds to the diversity of thinking of the group of economists. It may be the case…that those women who ‘add diversity’ in intellectual life do not choose to become economists. This would mean that women contribute to diversity in society but not necessarily to diversity amongst economists.”

He is inadvertently proving Carney’s point, just as he is trying to tear it down. If he thinks that intellectually diverse women do not choose to become economists, he needs to ask himself why that is. It might help to read Neil Irwin’s article about what happens when a certain female economist does “contribute to diversity”:

Yellen has a perfectly solid relationship with Bernanke, as best as I can tell, but she’s more of her own thinker within the institution. She has spent her time as vice chairwoman urging Bernanke and her other fellow policymakers to shift policy to try to do more to combat unemployment, and thinking through ways to do just that…And people dealing with her within the Fed have viewed her not so much as Bernanke’s emissary but as her own intellectual force within the organization.

Felix Salmon summarizes Irwin’s reasons why the White House is uneasy about Yellen:

“The first is the ‘team player’ attack: Yellen is an independent thinker more than she is a loyal deputy to Bernanke… She never became part of the boys’ club which was making enormous decisions on a daily basis in the fall of 2008… The ‘team player’ argument, then, is basically the ‘one of us’ argument, thinly disguised. Which is the first place that the sexism comes in…
This second reason essentially takes the ‘team player’ argument past its breaking point, to the point at which the Obama team is basically saying ‘Yellen needs to share our biggest weaknesses.'”

I hope this post was not too much of a rant. I just wanted to make the point that Governor Carney’s remarks are perfectly acceptable and in fact welcome.

Cross-posted from Carola Binder’s blog, Quantitative Ease.

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Comments to "Diversity in economics":
    • Avi Rosenzweig

      Each year during campus open house Cal Day, the ROTC used to run an activity on the facade of Wheeler Hall where visitors were allowed to rappel down the side of the building. It hasn’t been offered for the last few years, and many of us spectators miss it because, against expectation, most of the kids lining up to give it a try were girls.

      Why girls? We speculated that even a decade after Title IX, girls were not expected to show athletic prowess, so they had no pressure to perform — boys were too worried about looking incompetent, but girls were not expected to get it right the first time, so they were free to enjoy themselves.

      Maybe there’s an aspect of this in the governance of economic institutions.

      Men don’t want to speak out too loudly for regulatory regimes because they don’t want to seem girly, or pink(o). Real men can pull themselves up by their own bootstraps, so they can’t favor do-gooderism.

      Women don’t have those particular hang-ups. They have other problems to worry about.

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    • philip

      I think this is somewhat illogical in parts (or the conclusions do not follow logically from your statements). For example: “It might help to read Neil Irwin’s article about what happens when a certain female economist does “contribute to diversity”” – this is a problem when any economist tries to contribute to diversity whether male or female: the problem is diverse ideas tend to be rejected from either sex. Try publishing as an Austrian in the Economic Journal (post 1970). Look at the journals from which Gordon Tullock’s best papers were rejected in the early 1960s – they were all the best journals.

      Either there are some intrinsic differences between men and women (as Summers suggested – you just state that my comparison with Summers is confusing when it is straight forward) in which case why was Summers villified and Carney applauded? If this is the case there are much wider implications of Carney’s remarks but he would be right that women would add diversity as women.

      Alternatively, there are not intrinsic differences between men and women and the reasons why women are not on the MPC might be due to the subtle reasons you suggest (or it may be due to perfectly rational different career choices by men and women). If this latter explanation is the case, then you might add to the talent pool by trying to fish out more women but you will not necessarily add to diversity of thinking. I should add that there are also lots of other groups in the economics world (not defined by their sex) who do not appear on the MPC.

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