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Dec 31, 2014

The Great Enrichment, Network Theory, and the Economic Liberation of Women

Legal and cultural changes allowing women to own property and participate in the market as entrepreneurs contributed to the Great Enrichment.

The voluminous literature on the causes of the Industrial Revolution has been greatly enriched by the insights of economic historian Deirdre McCloskey.

But there is an interesting angle from a libertarian feminist perspective, concerning the processes underpinning the economic emergence of women, waiting to be told.

McCloskey outlines the “Great Enrichment” of exponential wealth creation—initially experienced in Western Europe, then later in North America and the Antipodes, and now East Asia—as being determined by a reshaping of cultural values in favor of entrepreneurship.

Specifically, greater ethical dignity afforded to the exercise of entrepreneurship within marketplaces, and for those displaying entrepreneurial flair, facilitated an explosion in output, and encouraged liberal reforms easing restraints against entrepreneurialism.

It is a sweeping narrative, to be certain, but a potentially useful way to appreciate the radically liberating properties underlying the McCloskey conjecture would seem to be through the lens of network theory.

Network theory in economics analyses the connecting pattern of exchange relationships between interacting individuals, private firms, non-government organisations and other entities, with the connections evolving, as new forms of value-added exchange relations are ratified and different agents enter the scene with new supply and demand offerings.

In its most general sense, the Great Enrichment could be conceptualized as a growth in the number and complexity of value‑added economic connections (the interplay of productions and sales) achieved between participants in the network.

In addition to Adam Smithʼs proposition that sound institutional settings (“peace, easy taxes, and a tolerable administration of justice”) are necessary for the lengthening scale and widening scope of productive networks, three other interrelated conditions may be cited, with important implications from the libertarian feminist view.

These are: access to physical capital; access to human capital; and a “economic encompassment” in which incumbents accept the involvement of creative, talented new entrants in the networked economy.

J. S. Mill wrote to his close friend, and later wife, Harriet Taylor, that women at least required access to physical and human capital to economically participate:

women will never be what they should be, nor their social position what it should be, until women, as universally as men, have the power of gaining their own livelihood: until, therefore, every girl’s parents have either provided her with independent means of subsistence, or given her an education, qualifying her to provide those means for herself.

It is true that women have procured consumption goods since antiquity, although in the pre‑modern era largely through the prism of economic dependency upon a “breadwinning” male head of household, as pointedly described by Mary Wollstonecraft in her Vindication of the Rights of Woman.

But it was not until Western governments enacted deregulatory reforms from the early nineteenth century that women could legally acquire the means to own property, and transform them into valuable economic uses for sale to prospective customers, male or female.

Thanks to the Mississippi Married Womenʼs Property Act in 1839 and the subsequent wave of similar reformist legislation across the United States and elsewhere, women could now control real and personal property, participate in contracts and lawsuits, arrange inheritances and write their own wills, and undertake salaried work.

Human capital was also needed to enable individual women to sell their knowledge and insights within the network economy of market interactions.

With regard to formal education, economist Claudia Goldin has chronicled the substantial level of schooling provided in the United States during the nineteenth century, with open enrollments (excluding many African‑Americans in either segregated schools, or receiving no schooling) allowing many girls and young women to be educated alongside their male counterparts.

The ability of previously disadvantaged women to grow the economic capital structure seems a clear instance of McCloskeyʼs insight that a factor underpinning the Great Enrichment was an embrace of “the new and liberal economic idea of liberty for ordinary people.”

But in keeping faith with McCloskeyʼs dictum that “the original and sustaining causes of the modern world … were indeed ethical, not material,” it is equally necessary to explain how women have benefited from “the new and democratic social idea of dignity” for all comers.

The greater ease for women to access existing, and create new, economic networks, at least on the supply side, has also been influenced by the extent to which incumbent participants, mostly men, have been prepared to associate with traditional female outsiders.

One could think of this as a form of social capital investment, unfolding across the generations, complementing and reinforcing the other forms of investment described previously.

Generally speaking, the economic emergence of women in the Great Enrichment story is certainly one in which historical and systemic discrimination have been gradually cast aside.

Those barriers against female economic participation included difficulties accessing finance, denied access to gathering places in which men socialise and strike commercial deals, and stereotypical attitudes about gender‑based work and family roles, among other things.

But the key to redressing the discriminations did not solely rely upon women establishing businesses primarily catering to the needs of other women (e.g., cosmetics, female clothing), or the formation of women‑only industry associations and business networks to counter the exclusions presented by gentlemenʼs clubs in which men struck commercial deals with one another.

Nor has it rested upon the notion, described by Gary Becker, that discriminating against increasingly educated and propertied women would come at an economic cost to trucking, bartering and exchanging men.

The greater involvement of women in market‑based economic networks has also critically depended upon the persuasive anti‑discriminatory idea that women are no less equal to men, in this context with regard to their economic capacities.

As it so happens, libertarian feminists throughout history have led the charge in making this equality argument and making it appealing to wider audiences.

In their famous 1848 “Declaration of Sentiments and Resolutions” Elizabeth Cady Stanton and other dignitaries of the Womenʼs Rights Convention declared women to be “manʼs equal” entrusted to “equal participation with men in the various trades, professions, and commerce.”

Over four decades later, Voltairine de Cleyre challenged women to ask themselves “why am I the slave of man? Why is my brain said not to be equal of his brain? Why is my work not paid equally with his? … Why may he take my labour in the household, giving me in exchange what he deems fit?”

It is notable that de Cleyre and other libertarian feminists often drew upon the outstanding success of the anti‑slavery movement when articulating their equality‑of‑the‑sexes case, undoubtedly to equally powerful long‑term effect.

To be sure, for men to accept women for economic networking, and the ability of women to secure productive physical and human capital for themselves, has not necessarily come quickly, or at even pace, as indicated by the mass employment of women during the two World Wars followed by their rapid displacement thereafter.

Nor is the quest to ensure women are freely able to refine their talents and develop viable economic connections entirely complete, at least for those who wish to do so, especially in the developing world.

But it is undeniable that “the … slow‑motion revolution in ethical convictions about commercial virtues and vices, in particular … an entirely new level of toleration for market‑tested betterment” has both benefited, and been forged by, women.

And putting more women on an economic par with men has unquestionably represented a providential gift for all humankind, as they continue to add to the scale and complexity of valuable economic connections made voluntarily through markets.