By Paulo L. dos Santos and Noé Wiener
What’s Wrong with Economics? The title of economic historian Robert Skidelsky’s latest book captures well a prevailing mood of popular disaffection with the dismal science. Many have come to associate the discipline with specific lines of political partisanship—including forms of market fundamentalism and the politics of austerity. Economics has also been widely criticised for its failure to grapple with actual, urgent economic problems. Within academic circles, the discipline has become widely regarded as insular and dismissive of the contributions other fields of social and historical inquiry make to the study of economic life. Among the public at large, the credibility of the discipline as a whole has faced considerable scrutiny, even while individual contributions by dissenting economists are widely debated and generally well received.
Recent political developments like the rise of the Movement for Black Lives and the #MeToo movement have helped broaden the sense of crisis in economics; encouraging examination of the discipline’s deeply problematic relationship with realties of race, gender, and other elements of people’s social identity. As a number of critics have noted, the problems are reflected most obviously in the profession’s basic institutional composition, which is grossly unrepresentative. In the United States women account for only 14 percent of full professors in PhD-granting departments. Of all doctorates conferred in the academic year 2015–2016, only 1.29 percent were conferred to Black or Latina women. This dismal performance was significantly worse than the 3 percent average across all STEM disciplines. That same year, only 3.6 percent of all full economics professors at PhD-granting institutions were Latino; a meagre 1.6 percent were Black.
The problem is also evident in prevalent attitudes and values among economists. Casual racism and misogyny among leading economists appears to have few or no repercussions. A 2019 survey of academic economists by the American Economic Association found that nearly half of Black economists reported being targets of discrimination in the profession. It also found that “only 45 percent of all . . . respondents (regardless of race) believed economists who are not White are respected in the field.” When the work on the economics of racial stratification by scholars like William Darity and Darrick Hamilton was finally included in the alphanumeric classification system for research topics in economics, it was placed in the last, residual category, “Z – Other Special Topics.” Recent work by Alice Wu uncovered evidence that these attitudes are prevalent among economics students, while work by Valentina Paredes, Daniele Paserman, and Francisco Pino found evidence suggesting that economics programs both attract and cultivate bigotry.
What has so far received comparatively less attention are the ways these attitudes are embodied in the basic concepts and analytical tools that most contemporary economists use to understand the world. Yet it is over this terrain that the discipline’s problems with issues of social identity prove most harmful to society at large.
The frameworks at the heart of contemporary economic thinking reflect analytical choices that ultimately betray the social position and outlook of those developing economic theory. In all of these choices, contemporary economic thinking has created a stilted conceptual terrain where it is easy to ignore or downplay the economic expressions of systemic inequities by social identity and class. This is evident in some of the discipline’s core analytical stances, like what is and what is not considered as economic activity, and in its rejection of social categories like gender, race, and class as useful in the analysis of markets and economies. It is also evident in the ways most economists think about the nature of discrimination, its relationship to market competition, and the statistical measurements of its effects on economic outcomes.
Given the outsized influence economics exerts across all fields of social inquiry and policy, these biases exert an insidious, conservative influence over public thinking and over the very framing of debates about those iniquities. Countering this influence requires understanding these biases, which in turn requires engagement with a few foundational methodological and technical issues in economic analysis. In what follows we draw on contributions by many critically minded economists and political economists, and on some of our own recent work, to contribute to a conversation among social scientists and political actors about these biases and about how they may be overcome.
What is Economic Activity?
Arguably the clearest example of social biases embedded in contemporary economic analysis involves the very measurement of economic activity. The most widely accepted aggregate measure is gross domestic product (GDP). But as many economists have noted, GDP does not include domestically performed care or reproductive labor—the difficult and time-consuming work of child rearing, running a household, and physically and emotionally caring for family and community members, performed overwhelmingly by women. Yet each year, billions of hours of this labor are performed, producing goods and services without which no economy could function. This labor is unpaid and, thanks to analytical choices made by economists, neither recognised nor counted as economic activity. As Nancy Folbre has emphasised, the public or social goods this reproductive labor creates are freely appropriated by agents across the economy.
This analytical choice by economists reflects a broader social tendency identified by Julie Nelson to devalue all things perceived as feminine, including labor performed by women in workplaces, which continues to receive lower average levels of pay than the labor of their male peers. It also independently influences important political discussions, to the detriment not only of women but of society as a whole. A case in point is the COVID-19 pandemic. Responding effectively to the outbreak requires millions of people to focus on a vital form of domestic work: caring for themselves, their families, and communities by staying at home during the outbreak. The lack of appreciation and absence of established procedures to provide monetary estimates for the social value of care labor has made it difficult to mobilise support for policies that would give people the resources they needed to perform this work. It has also contributed to the wide acceptance of a deeply mistaken sense of tradeoffs between “the economy” and caring for our collective health. Accepted economic thinking has thus created unnecessary obstacles to our ability to respond to an already difficult epidemiological and social crisis.
Methodological Individualism and Social Oppression
Another conceptual feature of contemporary economics that inhibits discussion of social oppression is the discipline’s methodological commitment to a strong form of individualist reductionism. Leading economic theorist Kenneth Arrow sharply described this orientation in a critical 1994 intervention, cautioning his fellow economists about their failure to consider the social context of individual economic interactions:
“It is a touchstone of accepted economics that all explanations must run in terms of the actions and reactions of individuals. Our behavior in judging economic research, in peer review of papers and research, and in promotions, includes the criterion that in principle the behavior we explain and the policies we propose are explicable in terms of individuals, not of other social categories.“
This rejection of the analytical value of social categories—in a discipline purportedly devoted to social inquiry—is remarkable. It effectively erases the significance of irreducibly social realities in the functioning of economic systems.
This methodological stance is also remarkable in that it represents a stark departure from a longstanding and defining recognition in the history of economic thought: that competitive interactions and interdependences among large numbers of individuals in decentralised, market economies give rise to outcomes and structural regularities that are systemic and emergent. A broad range of thinkers, from Adam Smith and Karl Marx to Friedrich Hayek and John Maynard Keynes, shared the understanding that the key regularities of economic life are inherently social and irreducible to the details of individual actions, intentions, and knowledge.
Today’s economists have converged on a different approach. As Arrow described, they generally understand economic outcomes and explain them to the public based exclusively on detailed descriptions of individual characteristics—consumption preferences, endowments of productive factors, productive possibilities, knowledge and expectations about the future, and behavioural drives—and of how people interact in markets. After its late-1970s “microfoundations” revolution, even macroeconomics converged on models of the economy casting aggregate outcomes as if they were the result of the actions of “representative” individuals. This kind of individualist reductionism creates serious difficulties, both practical and conceptual.
Practically, it is impossible to observe directly people’s subjectivities—their tastes, knowledge, and expectations. This makes it very difficult to draw on observed economic outcomes to pursue rigorous, scientific inquiry about their nature. The same goes for the details of market interactions. Instead of recognising these inherent difficulties in economic inquiry—as Austrian economists, among others, have done—contemporary economics has simply made “a number of assumptions about human dispositions and cognitive capabilities that are so outrageous, several years of training in economic theory are required in order to take them seriously,” as mathematical sociologist Duncan Watts put it.
Conceptually, looking for explanations for economic outcomes based on detailed descriptions of individual characteristics and interactions presumes that those characteristics and interactions are what modellers call “structural parameters”: features that are stable and unchanged during the processes under consideration. This amounts to an assumption that individual economic characteristics and the ways individuals interact are not themselves a product of the functioning of economic systems.
This is not generally true. Most individual economic characteristics are not idiosyncratic “givens”; they are social outcomes. A person’s consumption preferences, labor skills and work experiences, knowledge, expectations, technological possibilities, capital wealth, and behavioural imperatives—none of these is given prior to her economic and social interactions. They evolve cumulatively as that person interacts with others in markets and society at large. If individuals and their economic characteristics are social and shaped by competitive market processes, taking them as given can at best support thought exercises about the most immediate determinations of economic outcomes.
At worst, individualist parametrisations are misleading. They miss entirely the significance of irreducibly social processes. They generate “explanations” that run from given individual characteristics and agencies to economic outcomes. Analytical emphasis is placed on the properties of market equilibria defined by those individual characteristics and agencies. But the social and economic processes through which individual characteristics and agencies are themselves shaped over time are ignored. Yet those processes and the differences they create across people, countries, regions, etc. are some of the most consequential outcomes economics ought to grapple with. They are also central to the construction of social identities and class. They create very different outcomes, including patterns of individual economic characteristics and agencies across people belonging to different social groups.
As contributions from a wide range of disciplines have established, patterns of discrimination by class, race, gender, and other elements of social identity shape educational opportunities, expectations, and achievement levels; access to jobs, training, and networking opportunities; levels of pay for a given job, experience, and qualifications; individual wealth; and even measures of physical and psychological health and well being. These processes result in disadvantageous economic outcomes for women, minorities, and those from working-class backgrounds.
These differences in outcomes in turn help legitimise and reinforce the discriminatory social attitudes, expectations, and actions that conditioned those processes in the first place. Self-reinforcing socio-economic processes like these are integral to the construction of social systems of class subordination, racial supremacy, patriarchy, nativism, heteronormativity, etc. By eschewing the use of social categories needed to grapple with those systems, individualist parametrisations downplay how those systems persistently subordinate individuals on the basis of their social identity and class—not only by treating otherwise comparable individuals differently, but also by cumulatively enforcing iniquitous patterns of individual characteristics across social groups.
The dominance of individualist reductionism points to two prevailing stances among economists. First, it is likely that may of them are indifferent or ready to deny the oppressive economic realities, frustrations, and indignities most people face every day. This is a telling stance in societies where those realities are patent—perhaps nowhere more clearly than in the lengths to which affluent and relatively privileged families, like those of most economists, go to in order to ensure their children do not have to grow up under the social conditions under which most minority and working-class children grow up. Despite this, many economists are ready to think of economic outcomes that tend strongly to favour people like themselves not as social outcomes, but as natural consequences of idiosyncratic characteristics. According to this stance, systematic differences in economic outcomes across groups reflect the inherent characteristics of members of those groups. Here a methodological commitment to individualist reductionism boils down to rather pedestrian forms of bigotry and elitism.
Social Oppression and Market Functioning
A second stance accepts that discriminatory social processes shape individual attitudes and characteristics, to the detriment of certain social groups, but it considers that those processes take place outside and possibly despite the normal workings of a market economy. If realities of social oppression by identity and class are extrinsic to what happens in markets, then it should still be possible to abstract from them when conceptualising market functioning. This stance was best articulated by Arrow himself in relation to racial oppression:
“Market-based explanations will tend to predict that racial discrimination will be eliminated. Since they are not, we must seek elsewhere for non-market factors influencing economic behavior.”
Despite Arrow’s anti-racist commitments, this view contains a fundamental misunderstanding of the role market functioning plays within broader systems of social oppression.
The idea that market competition tends to eliminate discrimination relies on the claim that if otherwise comparable individuals are being offered different prices, wages, or products by some discriminatory agents in the economy, other agents will be in a position to generate higher returns by offering the same prices, wages, or products to comparable individuals. Competitive arbitrage of this kind would tend to eliminate discrimination in markets. This argument makes a strong individualist presumption: that all individual economic characteristics can be defined and identified independently of systems of oppression by social class and identity. This does not reflect social reality.
Consider the important case of a wage earner’s productive contribution. Ever since the influential work of John Bates Clark in 1899, most economists have supposed that it is meaningful to think about specific measures of productivity of each individual worker and each individual “unit of capital.” Yet in enterprises with sophisticated divisions of labor and deep productive interdependences, it is generally impossible to define “technical” measures of the specific contribution made by each wage earner to output or to revenues. Production is an irreducibly social process.
Still, wages (and profits) must be paid to specific individuals. The determination of those incomes hinge on attributions of individual contributions to productivity that are deeply social. Locally, having a dense and diverse network of acquaintances within an enterprise can help boost perceptions of an employee’s productivity. More broadly and to the point of the present discussion, general attributions of productivity are shaped by systems of oppression by social identity. Organisations routinely attribute to male employees contributions made by their female coworkers. Women and minorities tend to attribute to themselves lower measures of potential productivity and lower expected levels of pay than their peers. More systematically, the influence of gender over attributions of productivity and expectations of pay is evident in U.S. data, which strongly suggests that occupations with greater proportions of women have lower levels of pay than comparable occupations with greater proportions of men.
Given socially conditioned attributions of productivity and expectations of pay across social identity groups, business enterprises and market competition can very much exacerbate the effects of systems of discrimination, including in deliberate and at times perverse ways. In many circumstances, employers are able to shift the composition of their workforce in favour of social groups enjoying lower wages or more precarious social or legal conditions. Competitive enterprises often find ways to profit from systems of social oppression.
Over the past thirty years, many industries in the U.S. economy have come to rely strongly on cheap labor by undocumented workers. Many other industries in developed and developing countries have also experienced processes of “feminization” of their workforces—where levels of pay and conditions deteriorate as more women are recruited or as standards previously associated with women workers are generalised across genders.
Through processes like these, market competition helps reproduce systems of social oppression. It draws on them to boost profitability, and it creates outcomes that help reinforce perceptions and norms that associate certain social groups with certain occupations, conditions, and levels of productivity and pay. The functioning of market economies is in fact fundamentally intertwined with systems of social oppression. Without them, economies would function very differently than they do today. Four important examples illustrate these relationships well.
First, all modern economies rely upon the free, private appropriation of the public or social goods produced by domestically performed care labor. If the social systems enabling this appropriation were seriously disrupted, and societies found ways to ensure this labor was socially remunerated, economic functioning would be profoundly reshaped. New possibilities for work-life balance would be open to women and men, changing labor-market dynamics. Wages, prices, and profits would change across the economic system.
Second, classical political economists understood how realities of class are fundamental to a capitalist economy. Adam Smith understood profit not as a reward for the “productive contribution” of capital goods. He understood profit as a share of value created by labourers that capitalists can appropriate because labourers do not posses stocks of capital to initiate production themselves. Marx developed this insight, explaining how a capitalist economy requires the continual existence of a class of individuals who supply labor effort because they have no significant stocks of capital value. Differences across individuals in their ability to commit capital to production are not idiosyncratic. They are a defining reality of class, reproduced socially, and fundamental to the functioning of capitalist economies.
Third, across the world and in myriad distinct ways, systems of wages, prices, and profits give measurable, quantitative expression to the social subordination and precariousness of many social groups. If undocumented workers in places like the United States and Western European economies were to acquire basic citizenship rights, for instance, a number of important economic changes would follow. Many would move outside the industries ordinarily employing the undocumented, taking on jobs in line with their full sets of skills. Levels of pay in industries like construction, food production and services would likely increase, with important repercussions for prices of items in the basic consumption basket of all wage earners, altering the terms of labor-capital relations across the economy.
Fourth, societies across the Americas remain scarred by the legacies of chattel slavery and by the iniquitous ways that former slaves and their descendants were integrated into their political economies. For Black populations in countries like the United States and Brazil, that integration largely meant incorporation into what Marx termed the reserve army of labor: populations with a comparatively insecure place in core employment, whose rates of employment tend to increase only as other sources of labor are depleted toward the end of business-cycle upswing, and who are among the very first to lose their jobs at the outset of downturns.
The resulting “last-hired-and-first-fired” pattern of employment of Black workers helps moderate business-cycle fluctuations and stabilise rates of employment among whites in those societies—at considerable and generationally compounded costs to Black families. If the social attitudes, expectations, and allocations of social resources enforcing this outcome were to change, so that cross-sectional and time patterns of employment became comparable across all workers, the basic dynamics and distributional characteristics of the business cycle in those countries would likewise change significantly.
Systems of social oppression shape prices and wages in an economy. They also create important regularities or patterns in distributions of stocks of capital wealth, profits, and influence business-cycle dynamics. In other words, they shape the things with which analysis of market economies ought to be grappling. Eschewing class, gender, race, and ethnicity as analytical categories leaves economics unable to say very much about the nature of class, social identity, and oppression. It also leaves it unable to say many important things about economies, period.
By offering no robust way to think about the economic significance of social systems of oppression, the individualist reductionism of contemporary economic thinking also creates difficulties for work trying to measure the effects of those systems have over economic outcomes. This includes work grappling with their effects on one of the most important outcomes in a market economy—people’s labor incomes.
That work typically follows the approach to the study of the determinants of wage income pioneered by Jacob Mincer in the 1950s. Mincer’s approach is based on detailed statistical models of the relationships between an individual’s labor income and sets of other observable covariates that may exert an influence over it. Those include individual characteristics like measures of educational attainment, years of work experience, and so on. Researchers use Mincer models to look for evidence of differences in the average incomes of different social groups that cannot—under the terms of the models they assume—be accounted for by differences in other observed individual characteristics. Those “residual” differences are taken as evidence of discrimination by elements of social identity.
Empirical work along these lines suffers from the same problems of individualist reductionism that afflict contemporary economic theory. The focus on residual differences steers attention and debates away from the cumulative social processes that shape different patterns in covariate individual characteristics across social groups in the first place. Those differences are taken as given and offered as the “explanations” for differences in income across groups. This may be useful in dealing with the most immediate determinations of income, but it offers no way to grapple with the systemic, cumulative economic effects of social systems of oppression that shape both residual differences in income across groups and differences in the explanatory variables in the models being used.
An additional difficulty with this approach is that it depends on strongly specified models of relationships between individual characteristics. As a result, evidence of residual differences can always be questioned on the basis that under a more accurate or complete model, those residuals may be “explained” by differences in other, unobserved or neglected economic characteristics. For example, evidence that additional years of education result in a smaller average increase in income for women than for men can always be questioned based on the possibility of unobserved differences in the average “quality” of education or “commitment to work” of men and women.
The lack of a clearly defined concept of the systemic influence social identity exerts over incomes and the reliance on strongly specified models leave this work in a rather inauspicious place. Our ability to make definitive statements about the influences systems of oppression exert over incomes is effectively held hostage by our inability to develop mathematically accurate and detailed accounts of everything that could possibly matter, observed or not. What we don’t know and may never hope to know becomes a reason to doubt evidence of discrimination. This is an unreasonable burden of proof—particularly in societies rife with current and historical evidence of discrimination and bigotry.
Turn the Burden on Its Head
In recent research we have developed an alternative approach to understanding and measuring the economic expressions of systems of social oppression that avoids these conceptual and measurement problems. Our approach is conceptually based on recognising the systemic, social nature of realities of gender, ethnicity, and race, and of their influences over outcomes like individual income, its covariates, and over the associations between them. We also draw on information theory for tools allowing us to obtain measures of those systemic influences. These measures quantify how much we learn about incomes and about their relationship with other covariates when we learn about individuals’ social identity. Unlike the “residual” differences in Mincer and related models and parameter estimates in conventional regression analyses, we can define and estimate these measures regardless of what we may or may not know about the details of the mechanisms defining those influences. They are present in the data.
Conceptually, we start from the observation that there are no a priori reasons for consequential economic outcomes—like individual incomes, measures of educational achievement, and productive skills—to differ systematically across large groups of individuals defined by race, ethnicity, or sex. There is no biological foundation for social differences by race and ethnicity. And systematic differences between men and women in consequential economic outcomes are socially constructed expressions of gender.
Market economies are complex systems. Individual outcomes vary as a result of agencies, cumulative processes, and contingencies we can never hope to observe or understand fully. But unless there are systematic differences in the ways people are treated across social identity groups, we should expect all of this to result in the same population-wide patterns of key outcomes—incomes, levels of education, skills, experience, and so on—across those groups. In the parlance of probability theory, we should expect the joint distributions for income and all other consequential economic outcomes to be the same across large identity groups.
This conclusion can be stated conversely: differences in distributions of consequential economic outcomes across identity groups are economic expressions of systems of subordination and discrimination by social identity. This poses an important question: How can we make robust inferences about the functioning of those systems based on observed differences in distributions of important economic outcomes across social-identity groups—especially given the impossibility of developing successful detailed descriptions or models of the processes and relationships defining those differences?
This is where information theory and the concept of mutual information can do much better than conventional analyses based on regression models, and than simple comparisons of averages.
Mutual information gives us a powerful, general measure of the association between variables that is completely independent from the specific details and forms taken by the relationships between them. It is based on a specific measure of heterogeneity or uncertainty used in information theory: entropy. The entropy of the distribution for a variable like income across a group of people is an average measure of how many informational units (like computer bits) we need to represent what we don’t know about the income of an individual when all we know is that they are a member of that group.
To get an intuitive sense of this concept consider two variables linked through a variety of mechanisms: household income and residential postal or zip code. Entropy gives us a very general way to think about their association. Because of that association, distributions of household income within any given zip code are on average less heterogeneous than the distribution of household income across the population as a whole. As a result, when we find out where somebody lives, we learn something about their income. Their income belongs to a distribution that, on average, is less heterogeneous than the general distribution of household income. We now need a smaller computer or number of bits to represent what we don’t know about their income. The mutual information between household income and zip code measures this informational gain formally. It is a measure of association based only on how people are distributed across levels of household income and zip codes, not on what may or may not be the specific mechanisms defining that association.
Along similar lines, the mutual information between individual incomes and social identities measures how much we learn on average about somebody’s income once we learn their social identity. Because social identity is prior to the cumulative processes, agencies, and contingencies shaping individual incomes and its covariates, we can make a stronger statement: Here mutual information is actually an informational measure of the overall influence social identity exerts on incomes, both directly and by shaping other variables associated with incomes. Generalised measures of conditional, joint, and multivariate mutual information between social identity, income, and other covariates give us formal tools to grapple with some of the detail of how social identity shapes the covariates of income we can observe, and of how it influences the associations between those covariates and income.
Since all mutual information measures are independent of the processes and mechanisms generating the data we observe, they allow us to turn the conventional relationship between what we don’t know and the robustness of our estimates of the effects of discrimination on its head: What we don’t know about the details and relationships involved in income-generating processes is no longer a reason to doubt our estimates of those effects; it is simply the unknown detail of how the overall effects we can measure are established.
This reversal can transform the terrain for debates about statistical evidence of the effects of discrimination.
By the Content of their Character?
We applied this approach to distributions of income, social identity, and other observable economic characteristics in the U.S., using data on millions of individuals provided by the Census Bureau. Mutual information measures show that social identity persistently exerts an independent systemic influence over incomes. This helps recast the way most people think about statistical work on social identity in economic life. It’s goal is not to establish whether social identity exerts an independent influence over economic outcomes in the U.S. It is to identify, as much as practically possible, the particular mechanisms and covariates through which the systemic influences we can now measure robustly is established. Our measures also uncovered revealing differences in the ways different social identities influence incomes; differences that cast light on the role income-generating processes play in reproducing systems of oppression.
Mutual-information measures show that when we learn that somebody is a woman, Black, or Latino in the U.S., we gain information about their income. Through all of the cumulative, complex processes conditioning their incomes and covariates like levels of education, experience, occupation, access to resources, etc., their social identity influences outcomes. The effect these influences have on incomes is particularly significant for groups defined by intersections of these identities. In 2010, learning that somebody is a Latina woman reduced our uncertainty about their income by fourteen percent, a remarkable explanatory performance for a single factor. In contrast, when we learn that somebody is a white man, we actually become more uncertain about his income. Income-generating processes in the U.S. allow factors other than social identity to exert a bigger influence over incomes for white men than for the rest of the population.
These findings show that U.S. income distributions exhibit more than just differences in average incomes across comparable social-identity groupings. They point to income-generating processes that embody what the Rev. Martin Luther King identified as the essence of prejudice: The attachment of significance to the social identity of members of certain social identity groups, and a corollary failure to differentiate among them by the content of their individual character. Prejudice and discrimination throughout their social and economic lives measurably narrow the range of possible incomes for women, Blacks, and Latinos. They enjoy smaller scopes for income differentiation by characteristics other than their social identity than the population as a whole. In comparison, white men enjoy a distinctive privilege as a group: Their social identity does not narrow the range of incomes available to them. Income-generating processes effectively give them greater scopes to enjoy outcomes shaped things other than their social identity.
Our measures also cast light on some of the perverse ways in which social identity influences the associations between incomes and other economic characteristics. For example, they show how low levels of educational attainment are more closely associated with income levels for women with low educational attainment than for men with low educational attainment. Similarly, being a college graduate is more closely associated with income for whites with college degrees than for college-educated Blacks and Latinos. Women are effectively “punished” disproportionately for having lower levels of education, while whites are disproportionately “rewarded” if they have a college degree.
Our findings show how the U.S. economy effectively assigns economic significance to people’s social identity as if it were a racist and sexist person. The patterns of incomes and covariates it generates embody, validate, and help reproduce discriminatory attitudes, beliefs, and associations. As such, it is itself an integral part of social systems of oppression by race, gender, and ethnicity in that society. Inasmuch as economics fails to recognise this fact, it too will be part of those systems.
New Political Economies
Economists need to take an honest, critical look not only at the composition of the profession, but also at how conventional economic thinking is itself part of the problem. Business-as-usual economic analysis will at best continue to ignore the manifest and profound influences of social identity and class not only on individual economic outcomes, but on the functioning of economic systems. At worst it will ensure that in the present political moment the discipline acts as an intellectual rallying point for apologists of a status quo that daily denies millions not only economic opportunities but too often their very humanity.
To avoid these fates, economic analysis needs to rediscover the social nature of economic processes and the analytical need for explicitly social categories that can grapple with realities of social oppression. Market outcomes reflect more than the individual characteristics emphasised by conventional economic thinking. They also reflect more than just the important systemic realities of productive structures, portfolio preferences over monetary and non-monetary assets, or of the overall functional distribution of income between labor and capital emphasised by heterodox contributions. Market outcomes also give measurable, quantitative expression to realities of social oppression by gender, race, ethnicity, sexual orientation, gender identity, and all other elements of people’s social identities.
Political economy also needs to accept all modalities of inquiry and instruments that can support robust empirical work grounded on those recognitions. For that, contemporary economic thinking needs to draw on and engage with things it has all but ignored: contributions from a wide range of disciplines that have studied the countless ways in which oppression by social identity and class affects most aspects of economic functioning and outcomes; histories and current experiences of discrimination; and the social and political experiences of those seeking progressive social change.
This kind of open and multifaceted engagement can encourage the development of contemporary, emancipatory political economies—ones that can grapple with the economic significance and consequences of all manifestations of social oppression, lay bare their role in the functioning of contemporary economies, and offer society grounded ideas about the kinds of economic changes that can help deconstruct social systems of oppression. The present moment calls for economic analysis that is steeped in the emancipatory spirit the Classical contributions of Smith and Marx had in their respective times: scholarly work motivated not by efforts to justify the world as it is, but by the wish to transform it in ways that can make people’s lives more materially comfortable, meaningful, and fulfilling.