The Calculus of Their Consent

by Corey Robin on May 5, 2014

In addition to Kieran’s terrific write-up yesterday on Foucault’s engagement with Gary Becker, I want to recommend Kathy Geier’s very smart treatment of, among other things, feminist critiques of Becker’s theory of the family.

There are many ideas in Becker’s Treatise on the Family (originally published in 1981; republished in a revised version in 1991) that are problematic and/or offensive to feminists. For one thing, there is the assumption that economic actors behave selfishly in markets but altruistically within families — a theory that’s objectionable in both parts. There’s also the matter of how, in the words of Deirdre McCloskey, “the family in Becker’s world has one purpose, one utility function — guess whose? — unproblematically unified in the way that the neoclassical firm is supposed to be.”


Power struggles and conflicts of interest between family members are simply theorized away. The head of the family has a utility function that is supposed to include his own preferences as well as give weight to those of others in the family. But there’s no attempt to deal with the fact that since the head of the house earns the most money, he has the power to exert disproportionate control over the family’s resources. This is a type of problem that plagues neoclassical models generally. Power relations are rarely modeled.


Kathy also mentions this article that Becker wrote in 1997 about the Chicago Boys who worked in or with the Pinochet regime. Becker’s conclusion about that episode?

 

In retrospect, their willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile.


No real surprise there. Many free-marketeers, including Hayek, either defended the Pinochet regime or defended those who worked with it.

But the Becker piece reminded me of that infamous Mont Pelerin Society (MPS) conference in Viña del Mar in 1981, about which I wrote at length two summers ago. Founded in 1947, the MPS is an organization of economists, philosophers, and assorted action intellectuals and businessmen dedicated to spreading the free market gospel across the globe. In the late 1970s, at the height of Pinochet’s repression, Hayek and a few grandees in Chile began discussions  about holding the MPS’s annual conference in the seaside city where the coup against Allende had been planned. As subsequent reports would demonstrate, the purpose in meeting there was avowedly propagandist. According to the MPS’s own newsletter, the pilgrimage to Pinochet provided participants with an opportunity

for becoming better acquainted with the land which has had such consistently bad and misrepresenting press coverage (and, perhaps for that reason, it was appropriate to have Reed Irvine, head of Accuracy in Media as one of the first speakers in the first session).


Becker was originally targeted or slated to speak in Viña del Mar, on a panel titled “Education: Government or Individual Responsibility?” His name appears on an agenda with a “T” next to it. For “tentative.” But Becker either never confirmed or he pulled out. No matter: Milton and Rose Friedman, along with James Buchanan and Gordon Tullock, were there to show the flag—and the calculus of their consent.

{ 30 comments }

1

david 05.05.14 at 3:38 pm

Becker’s Treatise on the Family contains the famous Rotten Kid theorem, so it cannot be said that he was unaware that the family is not a unified entity. The entire point of the Rotten Kid is that the resource-controlling parent uses their power over resources to control the dependent’s behaviour. The whole thing was an explicit modeling of power relations.

Rather, the problem with Becker – and the wider problem with invocations of Coase-type reasoning over the use of resources to navigate power imbalances – is that the analysis just doesn’t give a damn about the assignment of the endowment to begin with.

Geier also makes a curious choice in citing McCloskey, who was writing essentially approvingly about the application of economic reasoning. McCloskey is, after all, an Austrian econ adept; her only objection to Becker-flavoured analysis is those dang socialists walking away thinking that they can redistribute those endowments around without breaking things.

2

david 05.05.14 at 3:39 pm

Uh, link broke. Maybe this will work?

3

Main Street Muse 05.05.14 at 3:43 pm

“In retrospect, their willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile.”

I’m sure these economists celebrated wildly when the US brought down the democratically elected Arbenz in Guatemala. United Fruit forever!

4

Tim Worstall 05.05.14 at 4:00 pm

“But there’s no attempt to deal with the fact that since the head of the house earns the most money, he has the power to exert disproportionate control over the family’s resources. This is a type of problem that plagues neoclassical models generally. Power relations are rarely modeled.”

It’s very well known (advertisers certainly have known it for decades, you only have to look at actual advertising to understand that) that women are the decision makers on the majority of household spending. It’s not entirely obvious therefore that the “head” of the household has control over the family’s resources. Or alternatively, that the male is the head of the household.

Once recent estimate for the UK is that women control 80 % or more of household spending.

Amusingly this effect is even stronger in said to be wholly patriarchal systems like Japan (the standard model there is that the wife entirely runs household finances, including savings, while the husband gets his pocket money given to him from his wage packet).

5

mds 05.05.14 at 4:08 pm

Amusingly this effect is even stronger in said to be wholly patriarchal systems like Japan (the standard model there is that the wife entirely runs household finances, including savings, while the husband gets his pocket money given to him from his wage packet).

Indeed. Similarly, women actually faced no discrimination or inferior status in the United States during the 1950’s and early 60’s, because in the opening credits of The Jetsons, Jane grabbed George’s wallet to go shopping. It was funny because it was true.

6

david 05.05.14 at 4:12 pm

your wife as an unpaid personal accountant is still unpaid, surely

7

Bloix 05.05.14 at 4:16 pm

“women are the decision makers on the majority of household spending.”
Hmm. Does this include cars? One decision on a car will balance out a hell of a lot of laundry detergent and toothpaste.

8

Bloix 05.05.14 at 4:19 pm

“Once recent estimate for the UK is that women control 80 % or more of household spending.”

By observation, I estimate that 80% of an Englishman’s income goes for beer. Not sure whether that counts as household spending.

9

jonnybutter 05.05.14 at 5:30 pm

It’s very well known..that women are the decision makers on the majority of household spending. It’s not entirely obvious therefore that the “head” of the household has control over the family’s resources.

Non-sequiter.

Although I will grant that very rigid hierarchical gender roles do tend, in private, to backfire on the man fated with trying to enforce or maintain them (it’s the *only* Flintstones plot, I think). But I imagine that the women often are less than tickled about the whole thing.

10

Felipe 05.05.14 at 6:22 pm

No real surprise there. Many free-marketeers, including Hayek, either defended the Pinochet regime or defended those who worked with it.

Care to offer a justification for this manichaeist line? Becker is basically claiming that the Chicago boys undertook a job under a terrible dictator, and that by doing so, they improved things. You could claim that he was wrong and that the Chicago boys made matters worse. But you are not doing that. You are claiming that anyone who worked within the Pinochet regime is indefensible. Do you propose that nobody should have ever engaged with the Pinochet regime?

11

UserGoogol 05.05.14 at 6:30 pm

Tim Worstall@4: Related to the accountant metaphor above, in economic terms I think you could think of it as a principal-agent relationship. Women often make the spending decisions, but they make those decisions on behalf of the family as a whole, and if the husband (or whoever might be in the family) does not approve they have leverage to change her decision. How much leverage depends on the particulars of the relationship, but who has the power is a very different question from who spends the money.

12

Corey Robin 05.05.14 at 6:40 pm

Felipe at 10: Judging by your question, I suspect you actually don’t know what the Chicago Boys did not only under Pinochet but also for Pinochet. If you read the documents linked to — which just give a teeny tiny glimpse of the propaganda some of the Chicago Boys mounted on behalf of the regime — you’ll get a sense that part of their task was not merely to work over the economy but also to mount an aggressive defense of the Pinochet regime, both in Chile and abroad. Which they did happily. It would be one thing, I suppose, if they said, “Look, I’m working with and for the regime because I believe its free-market reforms are necessary to improving the lives of Chileans, but I have to acknowledge that its human rights record is just God-awful and indefensible. Under no circumstance can you justify the torture, killing, and disappearance of at least three thousand men and women.” But of course we got nothing like that. We got instead the kind of propaganda coups that were mounted by many of the folks who are named in those documents. And who then were able to persuade international luminaries like Hayek to do the same. If you want to defend the Chicago Boys, you have to defend the propaganda they performed on behalf of the regime.

13

Tim Worstall 05.05.14 at 7:34 pm

To 5,6,7,8,9 and 11.

http://www.telegraph.co.uk/women/womens-business/10783665/Womenomics-why-women-are-the-future-of-our-economy.html

“Women are responsible for 83 per cent of all purchases, 60 per cent of new cars and 55 per cent of home computers: how did the fairer sex become the richer sex? “

There’s absolutely nothing new about this at all. Women have been the major deciders about the use, if not the source, of household income for decades now.

And women have been owners of more wealth than men ever since men died younger than women.

And for Corey: “Under no circumstance can you justify the torture, killing, and disappearance of at least three thousand men and women.”

I assume that all regimes, wherever they are on that left to right spectrum, get judged on that same, agreed by me at least, idea? We don’t get to say that Pinochet was a fascist pig therefore it wasn’t worth it but Nicaragua/PolPot/ Holodomor/insert Seumas Milnism of the day/ was?

14

mds 05.05.14 at 8:14 pm

If you want to defend the Chicago Boys, you have to defend the propaganda they performed on behalf of the regime.

You know, I actually wrote the following well before Comment 13 was posted, but (get this) decided that it might be a bit unfair to regular commenters, so I held off:

“Alternatively, simply accuse everyone to the left of Milton Friedman of being an enthusiastic supporter of Stalin and/or the Soviet Union in general. Because left-wing dictator-boosters and right-wing dictator-boosters must be symmetrically distributed, in accordance with Sebastian’s Law.”

(I chose “Sebastian’s Law” because I last saw Sebastian H. employing it, but perhaps in context “Worstall’s Law” would be more up-to-date.)

15

UserGoogol 05.05.14 at 8:56 pm

Corey Robin@12 To be fair, Becker doesn’t mention that side of what the Chicago Boys did, so he’s not endorsing that particular aspect of it. Still, if a person endorses a movement in broad terms, it’s entirely fine to chastise them for ignoring the more negative side of that movement.

16

Ronan(rf) 05.05.14 at 8:59 pm

I second the notion that people who supported Stalin should be remembered for it, just like the Chicago boys.

17

Just Some Commenter 05.05.14 at 9:27 pm

CoreyRobin @12:
Would you apply the same criticism (aggressively defending, at home and abroad, a regime that tortures, kills, and disappears people) to those who work for the U.S. State department? If not, why not?

18

LFC 05.05.14 at 9:44 pm

@17
CoreyRobin @12: Would you apply the same criticism (aggressively defending, at home and abroad, a regime that tortures, kills, and disappears people) to those who work for the U.S. State department?

Realizing the question was addressed to C.R., I would say nonetheless it’s perhaps slightly skewed. The job of people who work for the State Dept is to implement the foreign policy of the US govt, just as the job of those who worked for the Chilean ministry of foreign affairs under Pinochet was to implement Pinochet’s foreign policy. The Chicago Boys were not Chilean employees of Pinochet’s govt but outside flaks for the regime. Perhaps you think this makes no difference morally, but it might, though I’m not sure. Your question also implicitly assumes (or can be read to, at any rate) a rough moral equivalence betw Chile under Pinochet and the U.S. under Obama, which, though there may well be certain similarities, is at a minimum debatable.

19

Just Some Commenter 05.05.14 at 10:16 pm

@18: “Your question also implicitly assumes (or can be read to, at any rate) a rough moral equivalence betw Chile under Pinochet and the U.S. under Obama …”

It does not make that assumption. It attempts to point out a strong similarity between the two regimes in certain odious behaviours, since those particular actions were listed by the author as salient conscience-shocking enormities. My pointing out this similarity does not allege or imply moral equivalence, leaving room for a world of difference between the regimes. As one trivial example, I deliberately left out the numbers, because I cannot defend a numerical comparison (I don’t know it to be true or false).

More importantly, I deliberately used the United States of today because I assume it is the here and now for very many of us, and I was more concerned in provoking introspection as to the consistency of the application of this moral judgment.

20

Tom Slee 05.05.14 at 10:45 pm

Tim Worstall: Do we have to add balance every single time we say Pinochet (it’s true that Stalin was no picnic either!) or can we just do it once for every post in which Pinochet (Pol Pot killed people too!) is mentioned?

Also: I don’t think there is any evidence that Nicaragua belongs in that list. Assuming you mean the Sandinista government, not the preceding decades of Somoza, which certainly do belong.

21

Mike Furlan 05.06.14 at 12:15 am

” accuse everyone to the left of Milton Friedman “

Even Milton Friedman was to the left of “Milton Friedman.”

A negative income tax, was it Lenin or Stalin that thought that up?

22

Brett 05.06.14 at 12:22 am

I don’t see the defense with Becker either. You can recognize that good things come out of bad regimes without treating the bad regime itself as something to be admired or emulated, like recognizing that Stalin’s regime industrialized Russia and saved it in World War 2 while also recognizing that it was brutal in the extreme. I can’t vouch for the Chicago Boys themselves, but you can also condemn their advocacy while recognizing any good policies they propose.

@Tom Slee

Also: I don’t think there is any evidence that Nicaragua belongs in that list. Assuming you mean the Sandinista government, not the preceding decades of Somoza, which certainly do belong.

Well, there was the six year State of Emergency.

23

Tom Slee 05.06.14 at 1:33 am

Brett: The state of emergency was not marked by torture, killing and disappearance to the best of my knowledge. And there was, after all, an emergency in the form of assault by the USA.

24

roy belmont 05.06.14 at 2:29 am

Brett at 12:22 am:
“You can recognize that good things come out of bad regimes…”
Yes you can. And you can recognize the moral ambiguities of the human condition, and you can do that all day long.
But then when it’s time to make some actual moral decisions, you’re going to have to distinguish between acceptable and unacceptable degrees of moral ambiguity.
Unless…aha! You don’t want to have to do that, for reasons of personal gain, and in order to maintain the semblance of a functioning conscience.
So doing business with inhuman monsters can get twisted and rationalized into a pragmatic expedient, because hey, nobody’s perfect, and business is business.
This treatment would be the opposite of my view of what’s called for by reptilian thugs like Augusto P. – which is that not only is anything short of judicial arraignment complicity in his sordid death work, but he should be condemned for the specific attributes of the specific people he eliminated from Chilean society.
It wasn’t a random thing. He went for the living heart of the people. He attacked the Chilean soul.

25

Witt 05.06.14 at 1:32 pm

Does the data on who influences so-called “buying decisions” have to do with *which* brand/type of product to buy? Or whether to buy the product at all?

It’s much easier for me to believe that women (as a class) have significant influence over which brand/type of product to buy, than whether to buy the product at all.

26

Wonks Anonymous 05.06.14 at 7:09 pm

27

Metatone 05.06.14 at 7:53 pm

It would be kind of amusing to see Tim Worstall embody the point without understanding it, if I thought he actually believed it. Alas, he’s so often so keen to make points in this manner and then back off when actually held to account it’s really just tiresome.

The point in this case being that contextless economic analysis doesn’t take into account power relations and thus doing so does not provide a good description of reality.

28

Ed Herdman 05.06.14 at 9:43 pm

I realized what was disconcerting in Tim Worstall’s response when I remembered that some humanitarian groups put a preference on teaching girls in Afghanistan, because the men typically make terrible decisions about what to buy. You know, the place where guys do terrible things to women all the time.

Money can’t buy happiness, as they say: It’s really all that needs to be said in dismissing this “point,” which is very interesting but not an answer to the question at hand. And likewise if Becker is framing issues in terms of Rotten Kids, I think we have yet more evidence of the bent of Becker’s sympathies in this arena. With the Rotten Kid Theorem (aka “the motive in at least half of the Poirot mysteries”) we see that perhaps the status quo isn’t so durable and unproblematic after all.

29

Billikin 05.06.14 at 11:47 pm

Tim Worstall: “Amusingly this effect is even stronger in said to be wholly patriarchal systems like Japan (the standard model there is that the wife entirely runs household finances, including savings, while the husband gets his pocket money given to him from his wage packet).”

While Japan embodies much of Confucian patriarchy, it is primarily a Buddhist country, and putting the wife in charge of family finances is the Buddhist custom.

30

Unlearningecon 05.11.14 at 10:30 am

@usergoogol (and others)

The terror of the Pinochet regime and the economic reforms were one and the same. You simply could not eviscerate public enterprises and worsen working conditions and wages without forcibly disappearing and torturing union leaders, left wing academics, disbanding socialist parties and ignoring/destroying democratic institutions.

And what Becker says about Pinochet initially trying central planning is just wrong, as the Chicago boys knew of the coup in advance and were rushing to print out their reforms on the day it took place. Furthermore, many of them were pretty intimately linked with some later-to-be-found fraudulent behaviour in the financial sector following its deregulation.

Finally, the whole narrative of ‘but it did well economically!’ is lazy and one-eyed. The deregulated sectors tanked, while the only sectors which stayed state-owned (most notably copper) or at least state-sponsored (forestry, fishing) kept the economy afloat via exports. A speculative bubble burst in the early eighties, leaving and wages GDP pretty much where they were when Allende took over; following this, financial regulation was begrudgingly restored and many failed banks were bailed out/nationalised. Oh, and poverty only began to recover with the social democratic reforms of the nineties.

Politics and economics: never separate, no matter how much Chicago school economists want to believe otherwise.

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