Chapter 2: No Girly Stuff Allowed
Economics is hard! Competition Is Stiff! EconoMan Tells Us About Himself And His Manly Economic World.
The Informal Economy
Economists call the labor exchanges done for free at home, in cashless trade, or in cash-only transactions the informal economy. Women, especially mothers, are the majority of all such workers, working in private, unaccounted for, and unseen. They make far less money than formal workers, who by definition receive a company paycheck and benefits, and pay taxes as publicly visible workers. Today a new class of professional contract workers is emerging, often educated, but without job security or benefits. Economist Guy Standing has named them the precariat.
This chapter touches on one man’s ideas about inflation. But in a way, this entire book is about the practical problem of prices expanding while wage dollars and savings shrink over time. It isn’t physics and it isn’t natural, but it is inevitable without change. It’s made complicated so you will give up trying to understand—but don’t.
Keep on reading to unmask economic sexism where you might not expect it and, more importantly, to find sensible fiscal solutions. It gets easier once you hear more women’s personal stories, and can decode EconoMan’s language. Getting back to my own story….
By the time Ronald Reagan was re-elected president in 1984, as I’ve already said, I had witnessed a transformation in how our government viewed the economy. Reagan’s favorite economist, Milton Friedman, had promoted “trickle down” prosperity for all, theorizing that cutting taxes on the rich would soon eliminate the need for government safety nets by growing the economy. It sounded good. What had been called “Voodoo” became the greatest thing since sliced bread.
I later learned this economic pivot had actually begun in 1976 when Friedman was catapulted into fame as the winner of Sweden’s Nobel Prize in Economics. That award is living proof that EconoMan really does count on most of us not paying close attention.
Economics was never included in Alfred Nobel’s recognition for noteworthy endeavors established in 1895. In 1969, The Swedish Central Bank (Sveriges Riksbank) created its own separate award, the Memorial Prize in Economic Sciences, in memory of Alfred Nobel, timed rather cunningly to blur its difference from the older, original awards for chemistry, physics, literature, and peace. Until recently, when the Nobel family protested, the press had routinely left out this detail, apparently considering the banking world’s conflict of interest in elevating the field of economics irrelevant.
Two years before Friedman, British economist Frederick Hayek had won the same almost-Nobel prize. He and Friedman sought to link economics to a physics of natural forces, describing its parts with complex mathematics. The award they both received helped pose their prescriptions as something loftier than power and politics, and in terms less disputable, more like gravity and momentum.
In other words, they promoted the lying notion that a class of privileged men did not create these ways of thinking or at all benefit from them—rather, they were only describing inevitable, natural laws. You know, like the natural law that says a woman without a man should live in poverty….