Rethinking Development and Globalization: Insights from Feminist Economics

Neoliberal economics, "free market" rhetoric, and the policy prescriptions of the Washington Consensus are currently pressing towards a radical restructuring of the global economy. Many questions have been raised about these policies by people concerned with some of the negative effects on human well-being that have been observed. Decreases in health and employment related to the imposition of Structural Adjustment Programs (SAPs) on poor countries, global instability resulting from precipitous international capital flows, and the possibility of a "race to the bottom" in national labor and environmental standards have many observers very worried. Feminist economists have noted that the problems caused by cuts in social services often dictated by SAPs have often fallen most heavily on women (Bakker, 1994; Çagatay, Elson and Grown, 1996; Elson, 1991).

More work needs to be done on the effects of such policies, in detail and in context, and on the design of specific alternatives. This essay, however, takes on a more abstract, but also in many ways more basic, question. Why is it that such policies continue to hold such sway, on not only a political but also an intellectual level? Why have alternative approaches received so little acceptance? This essay describes how a feminist-theory-informed view of economics can provide intellectual resources for questioning the hegemony of neoliberal visions of development and globalization and for building better alternatives.

A Feminist Critique of Economics

At the core of neoliberal thinking lies the belief that free trade, privatization, and unfettered capital flows are required in order to unloose competitive market forces. These forces, in turn, are presumed to guarantee a one-way ride towards greater efficiency, prosperity, and economic growth. This belief gets its intellectual justification from the core model of contemporary Neoclassical economics. In the core model, rational, autonomous, self-interested agents maximize utility or profit. Markets are assumed to be perfectly competitive, with numerous buyers and sellers. Given these and a number of other assumptions, the First Fundamental Theorem of Welfare Economics "shows" that a competitive market equilibrium outcome cannot be improved upon. With the perfectly competitive economy set up as an ideal, then, government "interference" in economies tends to be condemned as leading to inefficiency. Graduate students in economics study the core model in great mathematical detail. Undergraduates are presented with simpler versions. They learn about "gains from trade" from an uncomplicated parable about how two countries can benefit by each specializing in producing one good, and relying on trade to provide them with a second good. Not all neoclassical economists are rabid neoliberals, and some economic research creates more scope for government action by tweaking the assumptions of the core model. Yet the image of a smoothly functioning perfectly competitive market economy is still the touchstone of "scientific" economics.

The intellectual roots of this image go back to Adam Smith's assertion that the "invisible hand" of the market system will automatically cause individuals' pursuit of self-interest to serve the social good. John Stuart Mill contributed the idea that the "science" of economics should be modeled on the axiomatic-deductive model of geometry. Mill also proposed that people, in their economic roles, could be thought of as interested only in wealth. David Ricardo came up with the parable about two countries gaining from trade.¹

This Classical economic image became "Neo" in the late 19^th century as Leon Walras, Vilfredo Pareto, and others realized they could mathematically formalize the image of the self-regulating system. By adapting models from Newtonian physics, calculus could apparently be as easily applied to economic issues as it previously had been applied to the design of machinery. During the 20^th century, the appeal of the smooth mathematical models of optimizing decisions became so great that mainstream economics left behind its classical definition based on "wealth" and turned into the "science of choice." The standard textbook definition of the field today is that economics studies how people make choices, in the face of unlimited wants and scarce resources.

Feminist critiques of Neoclassical economics began to gather steam during the late 1980s.² Partly, the critiques grew out...