The Dismal Science
February 1, 2002
With Responses From
Feb 1, 2002
6 Min read time
Neoclassical thinking has made this mess.
Jody Heymann's account of the intensified reproduction of poverty in the United States and the reasons for it is very well-informed, lucid, and alarming. The appalling paucity of care available to millions of children—including many of the worst-off economically—should be a national scandal. Having no disagreements with the case Heymann makes, I'll use this opportunity to make a point about the ideological background to the conditions she describes and to suggest that a very similar situation has emerged in much of the less developed and the ex-communist world. It is a problem endemic to late capitalism and the neoclassical economics that justifies its free-market extremism. The most important differences between the United States and these other, less economically-advanced countries are that the disintegration of adequate care for children has come about much more quickly and rapidly there than here and that, because of their economic vulnerability and debt, the governments of these countries had little choice about the matter.
One of the fundamental assumptions of the neoclassical brand of economics that now dominates the discipline is that only goods and services exchanged in the market have value. Having economic value, in turn, is necessary for something to be included in economic growth or the usual measure of such growth—per capita Gross Domestic Product (GDP). The growth of per capita GDP is assumed to be not only a good thing, but the normal indicator of a society's economic health—which is often assumed by politicians as well as economists to be the only kind of health that matters. Paid labor makes economies grow; thus, the greater the numbers of people who work for pay or whose products are sold, and the more work they do, the healthier a country is considered to be. Unpaid labor, on the other hand, has no value. Thus when persons give up unpaid work and take up paid work, nothing of value is lost. Moreover, when persons who are not paid take on more unpaid work than they did previously, no more work is undertaken. Indeed, when people take up and do for no pay what was previously paid for by governments, great savings can be made, and nothing of value is lost.
Finally, neoclassical economists have long assumed (though some are now questioning) that, even though households usually consist of a number of individuals, each household can be treated as if it were a single individual. Thus, from an economist's point of view, a household in which one adult member goes out to a full-time job that pays $X and the other stays home to do unpaid work (such as housework, child care, or nursing the sick or old), is identical to a household in which both adult members work full-time for a combined income of $X. So, also, is a household in which the member who used to work for pay becomes unemployed and does nothing, while the one who does the unpaid work continues to do it while taking on a job that pays $X.
Many connections exist between these assumptions and the serious problems discussed in Jody Heymann's essay. For while the assumptions economists make may bear little relation to the ways most of us see the world, they are translated into policies (or the absence of policies). And when they are, they have a great deal of bearing on the world. In the United States, the lack of valuation of women's unpaid work contributed heavily to justifying the so-called "welfare reform" legislation of 1996. For since women at home with children (excepting, perhaps, those with rich husbands) were not considered to be doing anything of value, it was easy to portray them as irresponsible loafers and push them and their children even further below the poverty line than they already were. Now that these "welfare mothers" are required to "work," states have discovered that paying other women to take care of these children can actually be more expensive than it was to enable these mothers to care for their own children at home. Perhaps, eventually, as child care becomes a market commodity, it may garner more legitimacy and respect—though indications so far are that it will be far from highly valued. (We pay zoo workers far more than we pay those who care for infants and toddlers and those who teach small children. Similar to the current lack of support for the single parents of small children is the lack of comprehensive or paid family and medical leave (even given the Family Medical Leave Act of 1993), a problem which Heymann analyzes so well. This, too, owes much to the same ideology of hyper-capitalism, in which what is not a marketable commodity has no value.
As a result of U.S. economic power during the last two decades of the twentieth century, the problems exacerbated by this neoclassical outlook have become far more prevalent in many economically disadvantaged countries. For what was happening in the latest stage of capitalism in this country was translated into the Structural Adjustment Policies that the World Bank and International Monetary Fund have pushed on all governments with high levels of international debt. Fundamental to these institutions' vision of an economically healthy, "developed" rest-of-the-world was the unfettered operation of free markets. Thus governments of indebted countries were urged and pressured to lift import duties and restrictions, to stop subsidizing infant industries and basic food staples, to balance their budgets (though not to stop buying arms) and, as part of this cost-saving, to charge "user fees" for public services such as education and health care.
These policies have had deleterious effects on both women and children. Free trade and the elimination of subsidies had the effect of eliminating jobs that were in many cultural contexts typically or even exclusively done by men, such as heavy manufacturing, and substituting jobs typically or even exclusively done by women, such as microchip manufacturing, sewing clothes, and other jobs requiring small motor skills (and, often, subordination to authority). Since for economists, jobs at the same skill level are fungible, they can have no gender. But in the real world, where the economists' policies are applied, men often become unemployed while women become newly employed and still take care of the home and children—for culture does not change as fast as markets. The budget balancing that has been demanded of indebted countries, in some cases, explicitly depends on increasing women's unpaid work. In a policy move that is called "cost-shifting," hospital and other health care cuts are recommended, with the explicit expectation that women will take up the work of caring for the sick that had been previously funded by the state. Needless to say, the healthcare and the education of children of both sexes, but especially that of girls, suffered or at the very least failed to progress, due to the inability of hundreds of millions of people to pay the user fees that were charged for these services.
It is, as the story Heymann tells makes clear, unconscionable that in the United States, with all its wealth, children—and especially the children of the economically least well-off—should be suffering such lack of care. Why we should be so careless of the nutrition, the physical and psychological health, and the education of so many of the country's future citizens seems incomprehensible. Indifference to the fate of most of the world's people seems to be an increasingly acceptable mode of thought in the contemporary United States. But what are we assuming about the future of our own country—which we presumably do care about, at some level? Do we think there will be an endless influx of healthy, educated immigrants from the middle and upper classes of other nations, to substitute for and to support all the illiterate and dysfunctional people we are creating through our failure to ensure care for children? Quite apart from issues of equity and human decency, Heymann is right to point out that it even makes economic sense—except in the immediate short-run—to do things very differently. How long will it take for us to break out of the mold of neoclassical economic thinking that has so contributed to this mess?
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February 01, 2002
6 Min read time