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Sex, Lies and Financial Crisis

by Aida Hozic and Jacqui True on March 8, 2016

Pervasive lies and scandals inflected by gender and race/ethnicity are the early-warning devices for financial crises and the symptoms of their wilful forgetting.

Over the last month the turmoil in financial markets underpinned by the slump in global – and especially China’s – growth has caused alarms to go off. Some commentators have speculated that this is the return of the financial crisis; that February 2016 looks an awful lot like September 2008 before the collapse of Lehmann Brothers; that even America’s economy is not strong enough to buoy the world economy up; it may not even be strong enough to keep itself afloat.

You thought it was over but the Global Financial Crisis (GFC) has not yet ended – the cycles of bust, apparent recovery, and austerity with no ‘boom’ in sight endure. Crises tend to be long-lasting because they are generated by structural tensions and political actions and because they have grave, painful, and often violent ongoing consequences; but crises are also construed by narratives, visual imaginaries and public performances that frame and interpret them in particular ways – compressing the time to respond and delimiting the possible responses. The consequences of the GFC should be apparent to all by now – high youth unemployment, extreme indebtedness, declining real wages and state services, ever increasing political and economic inequalities, high rates of suicide and domestic violence, stagnation and deflation, political extremism. But, at least in the rich world, we continue to be distracted by profoundly gendered and racialised debates about immigration and border control, affirmative action, Planned Parenthood and/or the nature of our family unions.

ScandalWith all this white noise, how would we even know if a genuine financial crash is imminent or if we simply need a survival guide for the new normal of slow growth? In Scandalous Economics: Gender and the Politics of Financial Crises we argue that lies about economic decision-making, purported by powerful, often conservative, elite (fe)male subjects talking up rock solid markets, and scandals involving sex and moral outrage against ‘others’ are the early-warning devices for financial crises and the symptoms of their wilful forgetting.

What better early-warning sign of a possible crisis than the scandalous  – gendered – narratives of wilful forgetting on display this January at Davos, Switzerland, where the global elite meet annually to plot challenges and solutions to problems of the world economy? According to the theme of this year’s meet, the Fourth Industrial Revolution is well under way and it will be delivered by women. So say Davos men who represented 93% of the participants at the gathering. Women were again a minority among the movers and shakers. But those who were there – the TED women of the global economy – had an important role to play: to share messages of hope and optimism in the face of political and economic uncertainty and to sell digital disruption as the panacea for the world’s increasing inequalities, including gendered ones.

Gathering at The Girls’ Lounge,a really special place,” the women of Davos were also concerned that the narrative about gender in the global economy needed to be changed. They suggested developing “a different vocabulary for moving the needle so that gender equality can be discussed as a business, growth and diversity issue—not a women’s issue.”  Thus it was suggested “gender inequality” could be substituted with “talent” or “archetype inequality” to help speed up diversification of corporate boardrooms, an imperative in the unending quest for better financial returns post-GFC. In short, proposed these CEO gals, among them Sheryl Sandberg of Facebook and ‘Lean-in’ fame, if women could just forget about being women (“girl entrepreneurs” would suffice) – they could lead the world to the new dawn.

And yet the crisis has never left us.

As the doco-pic, The Big Short, nominated for best picture at the Academy Awards this month, exposes, financial markets are lies built upon lies where banking institutions pretend there’s value in the products they are selling us and we pretend to believe them. The fundamental flaws in this consensus only unfold in times of catastrophic economic downturns, thus confirming Mary Poovey’s analysis that financial crises are always also “crises of representation,” opening the chasm between value and its vernacular representation – money.

Scandals, we argue, thrive in times of financial uncertainty because of their productive power. They represent a specific genre of crisis narratives; as highly publicised stories about personal transgressions they are intrinsically gendered and the perfect stop-gap measures for the “crisis of representation.” When the ground seems to be shifting, scandals can generate both new meanings and reassuring boundaries. In the aftermath of the GFC, they have pushed financial crisis away from the political limelight where the politics of our economic life in common could be publically debated. Just think of the running headlines – from DSK to General Petraeus, from Julian Assange to Payton Manning, from Bill Clinton to Hillary Clinton, from Donald Trump to Donald Trump. Scandals put women back in their place by seemingly doing them a favour. And so, ever since the GFC, the ‘spectre of gender’ has been paradoxically visible in both scandals about the sexual exploits of men and in rational arguments about the returns from women’s inclusion in the financial order.

If this taster of the goings-on at the pinnacles of global governance is not enough to persuade you that gender is back – and with a vengeance at this ‘ensuing crisis’ moment, then we entice you to read the rich plurality of contributions from around the world in our volume. The feminist political economy analysis featured in Scandalous Economics promotes a way of seeing beyond the silences and the scandals that have constructed an impoverished field of policy options. Feminist analysis helps us think ethically about the global political economy starting from the social relations that constitute its institutions and practices. Let us share a hint from Scandalous Economics: when trying to understand the recurrent crisis follow the women and the narratives in which they are featured; where women are mentioned or neglected may tell us more about the future of the global economy than watching, or [worse] predicting movements of the stock market.

Aida Hozic and Jacqui True
Aida Hozic is Associate Professor of International Relations and 2015-2016 Colonel Allan R. and Margaret G. Crow Professor, College of Liberal Arts and Science, University of Florida. She is the author of Hollyworld: Space, Power and Fantasy in the American Economy (Cornell, 2002) and numerous articles situated at the intersection of international political economy, cultural studies and international security. Jacqui True is Professor of Politics and International Relations and an Australian Rsearch Council Future Fellow in the School of Social Sciences at Monash University, Australia. She is the author of The Political Economy of Violence against Women (New York: Oxford University) awarded the American Political Science Association's 2012 prize for the best book in human rights and the BISA International Political Economy Group best book in 2013.

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