economics and society

The roots of gender and poverty studies began with Pearce (1978) who coined the expression ‘feminization of poverty’. Pearce considered female-headed families, excluding poor women who live in male- headed families, based on the argument that the proportion of families headed by women among the poor has been  increasing since the 1950s. In her opinion, women have become poorer because of their gender.

The recent dynamics of the global labour market has reinforced the precariousness of women’s employment and working conditions. Among other issues, the recent global highlights about the participation of women in the labour markets are listed below:

Unemployment: Women are more likely to be unemployed than men, with global unemployment rates of 5.5 per cent for men and 6.2 per cent for women

Informal Work:      In 2015, a total of 586 million women were own-account or contributing family workers. Many working women remain in occupations that are more likely to consist of informal work arrangements

Wage and salaried jobs: Moreover, 52.1 per cent of women and 51.2 per cent of men in the labour market are wage and salaried workers.

Jobs and occupations by economic sectors:  Globally, the services sector has overtaken agriculture as the sector that employs the highest number of women and men. In the period between 1995 and 2015, women are employed in the services sector: since 1995, women’s employment in services has increased from 41.1 per cent to 61.5 per cent.

High-skilled occupations: High-skilled occupations expanded faster for women than for men in emerging economies where there is a gender gap in high-skilled employment in women’s favour.

Part-time jobs: Globally, women represent less than 40 per cent of total  employment, but make up 57 per cent of those working on a part-time basis.

Hours of work: Across the global labour scenario, one fourth of women in employment (25.7 per cent) work more than 48 hours a week, mainly in Eastern , Western and Central Asia, where almost half of  women employed work more than 48 hours a week.

Gender wage gap: Globally, women earn 77 per cent of what men earn.


Indeed, although women have been increasing their participation rate in the labor market in the last decades, they worked in more precarious occupations. This situation characterized by precarious jobs, mainly based on short-term contracts, enhances the vulnerability of workers, mainly women, as the financialization of management strategies turns out to be subordinated to economic efficiency targets, that shape employment relations, overwhelmed by longer working hours, job destruction, turnover and outsourcing. Workforce displacement and loss of rights could also be part of the spectrum of management alternatives aimed at cost reduction. In addition to the wage gap, women’s participation is stronger in the services sector where working hours are longer and wages lower.

Besides, unpaid work could also be considered an extra onus on women. In addition to women´s challenges in the labour market, the increasing weight of unpaid work is more likely when women become unemployed and return to their homes and take more responsibility for housework than men, or because the loss of family income makes it impossible to support the remuneration of domestic workers. Gender-differentiated time use patterns are affected by many factors, including:  household composition (age and gender composition of household members); seasonal considerations; regional and geographic factors; availability of infrastructure and social services. But social and cultural norms also play an important role both in defining, and sustaining rigidity in, the gender division of labour.

Building on the United Nations goals, gender equality is required for the erradication of the many dimensions of poverty and to promote sustainable human development. Taking into account a macroeconomic approach to the labour markets, the “vicious circle” of impoverishment could be surmounted if policy makers rethink employment an income policies under a gender approach to the labour markets.


Ilo (2016)—dgreports/—dcomm/—publ/documents/publication/wcms_457086.pdf

Pearce, Diana (1978). “The feminization of poverty: women, work, and welfare”. Urban and Social Change Review, Special Issue: Women and Work, Vol. 11, No. 1-2, pp. 28–36.

Because of Western dominance, brilliant thinkers from the East get very little attention in global media. Even though brilliant economists from East Asia and China have created globally acknowledged economic miracles in their countries, none of them have received a Nobel Prize. On the other hand, Western economists whose theories were demonstrably in conflict with the events that took place in the global financial crisis — like Lucas, and Fama — have received Nobels. One of our greatest un-sung Eastern Heroes is Mahbubul Haq. My recently published article describes the revolution he created in economic thought:

Goethe starts his famous East-West Divan with a poem about the journey (Hegire), both physical and spiritual, from the West to the East. In this essay, we consider the analogous journey from Western to Eastern conceptions of development. This involves switching from viewing humans as producers of wealth, to viewing wealth as a producer of human development. To start with the Western conceptions, both Adam Smith and Karl Marx defined economic growth as the process of accumulation of wealth. The range of diversity of Western thought is bounded by the Left-Right spectrum. Ideas on which both extremes agree command widespread consensus in the West. Consequently, a core concept of modern economic theory is that wealth is the means and ends of the process of economic development. Unfortunately, due to the dominance and influence of Western paradigms, this concept has been widely accepted and adopted in the East today.

Mahbubul Haq was indoctrinated into the Western development paradigm which gives primacy to wealth at leading universities, Yale and Harvard. He got the chance to apply these economic models as the chief economist in Pakistan during the ’60s. However, because of his Eastern upbringing and heritage, he was able to see the murderous message at the heart of the cold mathematics of the Solow-Swan growth models. These models focus on savings, created by reducing present levels of consumption, as the only route to the accumulation of greater future wealth.

Mahbubul Haq realised what is not mentioned in the economics textbooks: obsession with production of wealth requires us to use the sordid and cruel tactic of making workers produce wealth, and refusing to allow them to consume it, in order to buy machines and raw materials. He was clear-sighted enough to see the consequences of these policies: wealth did indeed accumulate, but it went into the pockets of the 22 families, without providing relief to the misery of the masses. Today the global application of capitalist growth strategies has led to a dramatic increase in inequalities both inside nations and across nations. Just one among many horrifying inequality statistics is that the top 13 individuals now have more wealth than the bottom 3.5 billion on the planet.

Dissatisfaction with state-of-the-art Western growth theories led Mahbubul Haq to a revolutionary insight, taken from the heart of the traditions of the East, and having no parallels in current Western economic theories. Instead of capital, Mahbubul Haq placed human beings at the centre of the process of economic growth, returning to the ancient wisdom that “human beings are the means and ends of development”. Even though he was called a heretic for going outside the boundaries of contemporary economic thought, the pragmatic genius of Mahbubul Haq sought to minimise differences and create bridges to conventional thinking in order to achieve acceptance for his radically different approach to development.

His Human Development Index (HDI) was a master stroke, combining two inherently incompatible conceptions of development in a compromise which ceded ground to wealth in order to create international visibility for poverty. His friend and classmate Amartya Sen was reluctant to accept the HDI because of certain inherent flaws in this marriage of fire and water, but eventually agreed to its practical necessity. The pragmatic approach of Mahbubul Haq paid off handsomely when the HDI measure achieved global recognition as rectifying major defects in the standard GDP per capita. Widespread acceptance and use of HDI has led to a radical change in the discourse on development, by adding poverty, health, education and other soft social goals to the pure and simple-minded pursuit of wealth. The revolutionary ideas of Mahbubul Haq have led to improvements in the lives of millions, as global consensus developed on the social goals embodied in the MDGs and SDGs.

The Human Development approach of Mahbubul Haq was carried further by Amartya Sen, who defined development as the freedom to develop human capabilities. This notion, closely aligned with Eastern thought, was so alien to orthodox economists that they rejected it. Consequently, a new human-centred field of development studies emerged, which combined many streams of dissent from orthodoxy. Unfortunately, leaders at the helm of policymaking in the poor countries of the world are trained in orthodox economic theories, and have not assimilated the radical lessons of Mahbubul Haq, acquired from bitter experience. The paths to genuine development lie open, but with their backs to the doors, they are unable to see them.

Conventional growth theories create the mindset that the game is all about wealth creation. We will worry about our poor population only after we acquire sufficient wealth to feed them. The poor are a burden on the development process because providing for them takes away from money desperately needed to finance development of infrastructure, purchase of machinery and raw material, and industrialisation. We cannot afford to feed the poor, if we want to grow rapidly. The human development paradigm stands in dramatic contrast to this currently common mindset among planners. Instead of utilising humans to produce wealth, we utilize wealth to develop human capabilities. Our human population, our poor, are our most precious resource. This point of view receives strong support in the empirical findings of a recent World Bank study entitled “Where is the Wealth of Nations?” The study finds that the wealthiest nations are rich because they spend money to develop their human resources, and not because of natural resources.

Thus, instead of being a burden, our poor are our most efficient means to development. If we use available wealth to improve their lives, to empower them, to educate them, and to provide them with the support they need, they can rapidly change the fate of the nation. Furthermore, they are also the end of the development process — that our goal is NOT to produce more and more wealth, a la Adam Smith and Karl Marx — but to ensure that our people lead rich and fulfilling lives. If we use our energies to achieve this goal, we have already arrived at the destination — we do not need to wait for a distant future where sufficient wealth will accumulate to enable us to take good care of our people.

Published in The Express Tribune, May 20th, 2017.

By 2020, the largest pools of pension fund assets are projected to remain concentrated in the US and Europe. In North America, pension fund assets reached $19.3 trillion in 2012 and PwC estimates that by 2020, pension fund assets will rise by 5.7 percent a year to achieve over $30 trillion of the $56.5 trillion in total global assets, more than 50 percent of the global total.

Indeed, according to the PwC report, Asset Management 2020: A Brave New World, demographic changes, accelerating urbanization, technological innovations and shifts in economic power are reshaping the asset management environment where pension funds have been playing and  will play an outstanding role in the global saving and investment process.  Three key factors seems to stimulate the global growth in assets: i) changes in government-incentivized or government-mandated retirement plans that will turn out to increase the use of defined contribution (DC) individual plans; ii) faster growth of high-net-worth-individuals in South America, Asia, Africa and Middle East regions up to 2020; iii) the expansion of new sovereign wealth funds.

However, in spite of the pension funds’ power to centralize huge amount of “savings from workers”, in this scenario of financial globalization, workers do not seem to have strong defense against the impacts of the current global scenario on the savings of workers and the flows of workers’ income.

In a context of uncertainty, the pension funds’ portfolio management is based, as Keynes warned, on precarious conventions.  Pension funds are part of a set of interrelated balance sheets and cash flows between the income-producing system (hedge, speculative and Ponzi firms) and the financial structure that affect the valuation of the stock of capital assets, the evolution of credit and the pace of investment. Current pension funds’ performance ultimately relies on the endogenous nature of financial instability.  Throughout the business cycle, when profits decline, as they inevitably do, credit and external sources of funding generally become restricted and the price of assets also fall. This scenario affects the performance of these institutional investors and reduces the value of the stock of workers’ savings in pension funds.

As a matter of fact, the connection between pension funds and speculative finance is one of the contemporary features of the management of the working savings. Continued low interest rates would impact the future profitability of pension funds, particularly in those portfolios where income-fixed assets predominate.

Among other current challenges to the management of pension funds is the evolution of austerity programs. In many countries, austerity programs have also relied on changes in retirement plans. Soon after the global crisis of 2007-2008, many European countries  announced austerity measures that included  changes in retirement age and pension payments. As a result, loss of retirement rights has turned out to become part of the new set of public policies.

Indeed, many governments, under global investors’ pressure, should meet budgetary targets and pursue further structural reforms- also related to age and amount of pension within retirement plans.  In truth, the current era of financialization and austerity – and its impacts on retirement plans and job creation – is certainly affecting day-to-day life of workers and the future of pensions. In other words, it is affecting the flows of workers’ income and the savings of workers.


Part 2 of Lecture on Spirituality and Development: Friday, 27th Jan 2017 by Dr. Asad Zaman, VC PIDE — for Students of Religion & Development Paper, Center of Development Studies, University of Cambridge. Link for part 1: Spirituality . 50m Video lecture:


  1. The meaning of development has varied dramatically across time, space, cultures.
    1. When Britannia ruled the Waves:
      Development definition suited Britain: Sea-Power, Coal Mines, Industry, Climate, Race
      No entry for “democracy” in Encyclopedia Brittanica, 1930
    2. Post-War Rise of USA
      Initial Definition: Democracy, GNP per capita – both criteria serve to ensure leadership of USA.
    3. Later, some Oil Economies had Higher GNP/Capita than USA
      So REDEFINE Development to include Income Distribution, so as to keep US on top
    4. Later, Switzerland, Japan and some other Scandinavian countries had Higher Wealth + Lower Gini. How to measure development to ensure USA is on top? Answer: Redefine Development to include Infrastructure
    5. Conclusion: Definition of Development Changes to suit the powerful. Criteria are chosen to ensure that the powerful are on top.
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wisdomThe adventure of leaving home, and exposure to unlimited educational opportunities as well as a radically different social environment, made us heady with excitement as freshmen at MIT. We often stayed up all night discussing our new experiences. Since we could not come to any conclusion regarding the most important question we face: “what is the meaning of life?”, we resolved to seek guidance from one of our professors. Most were teaching technical subjects like math, physics and chemistry, but our history professor occasionally talked about the bigger issues of life. Upon being asked, he gave us an answer which satisfied us at the time: he said that first we must learn the little things that we were being taught, in order to be able to answer the bigger questions that life poses.

It was many years later that it gradually dawned upon me that we had been scammed. Our teachers had no answers to these questions, and so they shifted our attention to the questions that they could answer. We were counselled to look under the light, for the keys which had been lost in the dark. It was not always that way. In The Making of the Modern University: Intellectual Transformation and the Marginalization of Morality, Harvard Professor Julie Reuben writes that in the early twentieth century, the college catalogs explicitly stated that their mission was to shape character, and produce leaders. Students were to learn social and civic responsibilities, and to learn how to lead virtuous lives. However, under the influence of an intellectual transformation which gave supreme importance to scientific knowledge, and discounted all other sources and types of knowledge, consensus on the meaning of virtue and character fragmented and was gradually lost. Universities struggled very hard to retain this mission of character building, but eventually gave up and retreated to a purely technical curriculum. Because this abandonment of the bigger questions of life has been extremely consequential in shaping the world around us, it is worth digging deeper into its root causes

Enlightenment philosophers had hoped that reason would lead to a superior morality, replacing what they saw as the hypocrisy of Christian morality. They thought that Truth was comprehensive, embracing spiritual, moral, and cognitive. However, by 1930’s this unity was decisively shattered. The triumphant but fatally flawed philosophy of logical positivism drove a wedge between factual cognitive knowledge and moral/spiritual knowledge. It became widely accepted that science was value-free, and distinct from morality. Prior to the emergence of this division, social scientists had defined their mission as understanding and promoting human welfare. Social and political activism had been a natural part of this mission. However, this changed in the early twentieth century with the widespread acceptance of Max Weber’s dictum that social science, like physical science, should be done from a value neutral perspective of a detached observer.

Positivist philosopher A J Ayer said that moral judgements had no “objective” content, and hence were completely meaningless. Similarly, Bertrand Russell said that despite our deep desires to the contrary, this was a cold and meaningless universe, which was created by an accident and would perish in an accident. These modern philosophies displaced traditional answers to the most important questions we face as human beings. According to modern views, we must all answer these questions for ourselves. No one else has the right to tell us what to do. All traditional knowledge is suspect, and instead of following custom or authority, we should arrive at the answers in the light of our limited personal experience and reason. Indeed, this is a core message of Enlightenment teachings which is built into the heart of a modern education.

The treasure of knowledge which is our collective human heritage has been collected by hundreds of thousands of scholars, laboring over centuries. Imagine what would happen if we were required to use our reason to establish and validate every piece of knowledge that we have. It would be impossible to learn more than a very tiny fragment of this knowledge. As a practical matter, we accept as givens vast amounts of material taught to us in the course of a modern education. This is necessary; if told to re-discover mathematics from scratch, even the most brilliant and gifted child would never get beyond the rudiments of the material in elementary school textbooks. But for the most important question we face in our lives, we are told that all traditional knowledge is useless; we must work out the answers for ourselves. There is a huge amount of discussion, conversation, and controversy contained in the writings of ancients. But we were educated to believe that the wisdom of the ancients was merely meaningless verbiage of the pre-scientific era. Thus, we never learned about Lao Tzu’s saying that loving gives you courage, while being loved gives you strength.  We learned fancy techniques and tools, but never learned how to live.

Real education can only begin after removing positivist blinders, and realizing that we have no choice but to trust the stock of pedigreed knowledge. It takes a lifetime of reasoning to arrive at a few simple results – we can look at the lives of those who made remarkable discoveries and see how, despite the magnificence of their contributions, their work was confined to a narrow and specialized domain.  Furthermore, they were only able to see far by standing on the shoulders of giants of the past. In benefitting from the stock of accumulated knowledge, our main task is to discriminate, to extract the gold nuggets from the mountains of dirt, and to avoid being deceived by fool’s gold. Today, as always, and in all fields of knowledge, the best path to expertise is via discipleship, unquestioning acceptance of instruction from experts. A premature application of reasoning and critical thinking leads to rejection of thoughts which contradict our prejudices, and makes learning impossible. Discipleship requires putting away preconceptions, emptying our cups, and opening ourselves to complex systems of thoughts entirely alien to anything we have ever conceived before. It is only after absorbing an alien body of knowledge that we acquire the ability to understand, reason and critique. A modern education creates multiple barriers to the pursuit of real knowledge that we desperately need to lead meaningful lives, by renaming ancient knowledge as ignorance, and by presenting us with illusions masquerading as knowledge. Like the wife of Alladin, we have gladly given away the ancient lamp for the bright and shiny modern one, without being aware of our loss. The path to recovery is long and difficult, as unlearning requires being open to possibilities and exploring directions that seem patently wrong to our modern sensibilities. It is not easy to suspend judgment and let go of what we have already learned, in order to acquire new ways of looking at the world. Yet, this is exactly what is required, if we are to learn to live, and not waste this unique and precious gift of life that has been granted to us for a brief moment only.

See also: The Secrets of Happiness, and Re-Enchanting the World. Published in The Express Tribune, 26th December, 2016.Posts on Diverse Topics: My author page on LinkedIn. Other works: Index .

subprimecrisisThis is my book review on Amazon — I thought it would be of interest to WEA readers.

In a complex world, discovering causality is very difficult. Many things happen simultaneously, and post hoc ergo propter hoc reasoning is a common fallacy that is hard to detect and critique. Here is how I understand Meltzer’s arguments. Meltzer defines Capitalism as private ownership of means of production, and free enterprise with minimal government regulations. In practice, ALL economies have government regulation of free enterprise, and a mix of private and public ownership. This gives Meltzer a free hand in proving that Capitalism works. Wherever he sees growth, he attributes it to the “capitalist” portion of the mixed economy. Wherever he sees failure, he attributes it to the “communist” portion – government regulations and control of production.

For example in a 90% capitalistic economy in the USA, a small injection of regulations (say 5%) leads to disaster and catastrophe. However in China, an economy which remains largely communist (government owns more than half of means of production), growth is attributed to the small injection of capitalist methods. Whereas the gradual liberalization of Chinese is praised, the Russian experience is not mentioned at all. At insistence of free market ideologues like Meltzer, Russia was forced to adopt a radical free market strategy (Shock Therapy of Jeffrey Sachs) which led to disaster.

In addition to wrong attribution of causality, I disagree with Meltzer on some factual claims. He considers the Reagan-Thatcher era of de-regulation to be a general success on economic fronts. Here is my capsule summary of banking regulation history, which is drastically different from Meltzer’s portrayal of the same history. Wild speculation by banks led to collapse of banks in 1929, wiping out life savings of millions, and creating massive misery which lasted for decades in the USA. In wake of this failure, a regulatory structure which included the Glass Steagall act, was put into place which PREVENTED competition and speculation by banks. This worked very well for fifty years, with only minor and inconsequential bank failures until the 1980’s. Then, with much fanfare, Reagan deregulated the S&L industry via the Garn-St. Germain Act, announcing a new era. Inside Job: The Looting of America’s Savings and Loans by Pizzo, Fricker & Muolo documents how the deregulation led to systematic looting and the S&L crisis. As a result of the crisis, Taleb estimates (see page 43 of The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: “On Robustness and Fragility”) “large American banks lost close to all their past earnings (cumulatively),about everything they ever made in the history of American banking – everything.” Similarly, repeal of the Glass-Steagall act, which prevented banks from speculating, eventually led to the global financial crisis of 2008, in which free enterprise by banks led to the loss of trillions of dollars. An antidote for the belief that the private sector is more efficient and less corrupt than the government is a series of articles by Matt Taibbi, for instance “The Bank of America: Too Crooked to Fail” [ see […] ]

To summarize, unregulated free markets led to the Great Depression. Regulations and Keynesian economics (which allows Governments to help the unemployed) led to stability and prosperity until the 1970’s. De-regulation and liberalization in the Reagan-Thatcher era led to a massive increase in concentration of wealth at the top, and repeated financial crises, including the S&L crisis of the 80’s and the global financial crisis of 2008. HOWEVER, free market ideologues like Meltzer have an ENTIRELY different interpretation of this same history. According to them, the Great Depression was caused by mis-management of the monetary policy by the US Government. The same mistake caused the S&L crisis in 1980’s, and again, government (mis-)regulations are to blame for the global financial crisis.

One point on which Meltzer and I agree is that the Dodd Frank act is not worth the paper it is written. However, to Meltzer, this is evidence that regulations don’t work. Many others, including myself, see it as evidence of regulatory capture. The 37 page Glass-Steagall act clearly and strictly prevented banks from speculative investments, and worked very well for half a century. The strength of the financial sector prevented the passing of the necessary regulations, and created the 900+ page monstrosity of Dodd-Frank, full of loopholes one could drive a truck through. Effective and necessary regulation could not be passed because the strong private sector prevented it from happening.

How can we decide who is right? From the birds eye perspective taken by Meltzer, I believe that it is impossible to be sure. However, when one gets down to the nitty gritty details of history – who did what to whom, a pretty clear picture of the causal chains emerges. In this respect, Naomi Klein’s book The Shock Doctrine: The Rise of Disaster Capitalism is fantastic. I can honestly say that I learnt more about real world 20th century economic history and theory from this one book than I did from my Ph.D. in Economics at Stanford. The reader is invited to read both books and decide on the answer to Whether Capitalism works? for herself or himself.

One of the core and central properties of markets is that they lead to increasing concentration of wealth at the top. This is because market allocations of goods and services respond to money, automatically conferring great power to those with wealth. For instance, market incentives lead to the production of luxury handbags anmythrealityd briefcases for plutocrats priced at $40,000+. According to the World Health Organisation (WHO), the price of one such bag can save more than 300 lives.

The extremely ugly realities of market societies are hidden from view because markets generate myths to glorify achievements, project illusions and conceal defects. Indeed, the creation of market myths is a second core and central property of markets, which is not mentioned in any current economics textbook. Market myths are crucial to the survival of market societies since knowledge of realities would lead to a revolution of the bottom 99% who are exploited by the super-rich. In this essay, we analyse a few of the central myths of market societies, and contrast them with the realities.

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