I. Role Prejudice as an Economic Problem1

It is well recognized among economists that arbitrary discrimination in the labor market creates a general economic loss. Where certain people are excluded from jobs for reasons which have nothing to do with the performance of the jobs themselves, the loss to consumers plus the loss to those who are excluded is greater than any gain to those who are favored. There is now copious literature on this subject.

It is less well recognized that discrimination among existing members of the labor force is only a special case of a much larger process of role learning and role acceptance, which begins almost from the moment of birth. It is not merely that differences in skills are learned, as in Adam Smith's famous passage about the porter and the philosopher,2 but images of possible roles on the part of both the role occupants and the role demanders are likewise learned in the long process of socialization. The existing division of labor at any one time, therefore, may reflect "role prejudice" that is, a learning process by which certain irrelevant biological or genetic characteristics of individuals are associated with certain roles. Some genetic distinctions are significant for role performance, but many are not and yet are widely believed to be significant. These beliefs are products of a false social learning process, which can be a source of economic loss even larger than false discrimination within an existing labor force. Discrimination in an existing labor force indeed emerges as one consequence of the much larger process of the development of role prejudice.

Role prejudice tends to develop when there are genetic differences in the human population which are visible but are not necessarily significant for role performance. We see this clearly by considering those genetic differences which are undetectable except by refined methods and therefore are socially invisible. Some of the blood types are perhaps an example. In ordinary life we are quite unaware of a person's blood type. Consequently, it can be safely assumed that there is no role prejudice against blood types of different kinds, unless these happen to be associated with other characteristics which are socially visible. For the major types, this association is fairly minimal. Consequently, we would be very surprised to find a distribution of blood types in any occupational group or income group of any size which is markedly different from the distribution of blood types in the population as a whole.

For any particular distribution of genetic characteristics, it is clear that we can postulate "no-prejudice proportions" in all the different occupations and structures of society. In the case of the socially invisible and irrelevant characteristics mentioned above, the no-prejudice proportions, subject to random variation, in any group of society would be expected to be the same as the proportion of the characteristic in the society as a whole. If there were any case and I must confess I have not been able to think of one of a genetic characteristic which is relevant to role performance but which is socially invisible and not in the information system, then the existing structure of proportions of the characteristic in different occupations might not be the same as the proportions in society as a whole, and those occupations which this invisible characteristic favored would have a larger proportion than in the society as a whole, but this would still constitute a no-prejudice distribution. Paradoxically enough, without knowledge there can be no prejudice; without some knowledge, there can be no false knowledge.

Role prejudice may easily arise where there are highly visible and observable genetic characteristics, such as sex, race, height, size, color, and so on. Historically these have frequently been perceived as having some relevance to performance in different roles. But this relevance tends to be exaggerated, because a rational tendency to economize information can easily turn into an irrational process of stereotyping and false knowledge.

The genetic division of the human race into men and women qualifies in most societies as the major form both of discrimination in the existing labor force and of role prejudice. This is not surprising, as the genetic difference between the sexes is far greater than it is among the races in terms of the structure of information of the genetic code. There is one role indeed that of bearing children is which there is 100 percent genetic specialization between the sexes, in the sense that no men will be found in the childbearing population. The very social visibility of the distinction between the sexes, however, makes it a prime candidate for role prejudice, which creates a huge reservoir of false knowledge, false education, and false learning processes. All are costly to society in exactly the same sense that an unknown and unutilized natural resource is costly in the sense of opportunity foregone. We can, oddly enough, think of role prejudice as a large natural resource which can be mined by the development of true knowledge and better learning processes to the benefit of the whole society.

Where the sex distinction is completely irrelevant to role performance, role prejudice can be said to exist wherever there are substantial deviations from the 50 percent rule that is, 50 percent of each sex in the occupation this being assumed to be the proportion of the sexes in the total society. The difficult case, of course, is where there is some genetic foundation for partial role differentiation. It is the cases between the 50 percent and 100 percent that are difficult, and in these cases there is often no information system at the moment at any rate which can inform us as to the exact proportion of the sexes in different occupations which constitutes zero role prejudice. Fortunately, however, we do not have to know where the exact position of the ideal proportion is if the existing proportion clearly represents a gross disproportion. In order to set up a social policy we do not have to know exactly where the ideal lies. We merely have to identify those cases in which the deviation from the ideal is so clear and striking that we can find wide agreement as to the desirable direction of change. At the bottom of the mountain, one knows which way is up, even though one may not know exactly where the top of the mountain lies. Maximizing is an illusion, but betterment is not.

It is the contention of the American Economic Association Committee on the Status of Women in the Economics Profession (the Committee) that there is gross disproportionality in the proportion of women to men in the economics profession, and especially in university teaching, as revealed in the data which have been collected. Fortunately, we do not have to argue whether the genetic differences between women and men would result in a no-prejudice proportion of women in economics of 40 percent or 50 percent or 60 percent when the actual proportion is less than 10 percent. This gross disproportionality, of course, arises from sources in the long history of the human race, most of which are outside the economics profession. This, however, does not excuse the economics profession from setting in motion processes which will raise its proportion of women. We are a sector of the knowledge industry and a group of people concerned with eliminating sources of unnecessary economic loss. Only if we are successful beyond our wildest expectations, considering the vastness of the mine of ignorance and false learning, will it be necessary to raise the question as to whether we have gone too far.

The critical question, therefore, is that of the "betterment production function," as it might be called. The social indicator of betterment is in this case clearly an increase in the proportion of women in the profession, especially in those branches where the proportion is least. If the rate of change of this proportion is regarded as the product, the question is: What are the inputs which produce this output, and particularly, what are those inputs that can be most easily expanded and that have the highest marginal productivity? We might also look at those inputs which have a high negative marginal productivity and which can be contracted. Four broad classes of inputs may be named: Information, Persuasion, Rewards, and Punishments.

1. Information

Information properly organized changes the images of the world of people who receive it and consequently changes their behavior. There are two aspects of the information process theoretical structures and information about fact. Better theoretical structures are an essential ingredient in the advancement of knowledge, and in this particular case it is important that the theory of role prejudice, as outlined above, should be widely recognized as a legitimate extension of economic and social theory. One of the greatest enemies of the fact of prejudice is the spread of the idea of prejudice. Once it is recognized as a theoretical construct, the facts of perverse social learning which previously have been invisible become glaringly visible. The improvement and elaboration in detail of the theory of role prejudice is still an important task for the future.

Coupled with a wider appreciation of the theory, the development of statistical information, case studies, and a continuing series of social indicators can serve as a constant criticism of what is false in existing theories of the world and a reinforcement of what is true. It is tempting to think of every advance in knowledge as the result of a combination of new theoretical insights with new information collection and processing procedures. In social systems, however, knowledge does not merely reflect the world it changes it. And in this case particularly, the more we know about role prejudice, the less there is likely to be. Getting lost is one way to improve one's knowledge of the terrain, but studying a map is a better way, and diminishes the amount of getting lost.

2. Persuasion

The mere existence of knowledge and information is not always enough to insure its spread. One of the major sources of ignorance is inattention, and to insure the spread of new knowledge it is often necessary to call it to the attention of people in ways which are dramatic and persuasive. The fact that persuasion can be abused to propagate false knowledge does not excuse us from its proper use in the propagation of truth. Persuasion plays a particularly important role in the change of values, and without getting into the ancient controversy about the truth of values one has to recognize that change in our image of the world inevitably changes our values about it. As scientists, we have to guard against the information filter which our values create. We cannot pretend, however, that information is value free. Change in knowledge and change in values are joint products of a single process.

A problem of particular difficulty is that of irrelevant and unconscious sources and attitudes, even in the academic and intellectual community, which is supposed to be on its guard against irrationality. The relations between the sexes are often characterized by high levels of emotion, and hence are particularly subject to the distortions which arise from unconscious or irrelevant sources. It is one of the functions of ethical persuasion to raise our awareness and to set up defenses against attitudes and prejudices which arise from this source.

3. Rewards

It is widely recognized in the learning process that positive and negative payoffs are of great importance. Every economist is familiar with the proposition that any human activity which is rewarded above some neutral level will expand and those rewarded below this level will contract. The structure of knowledge and values in the human mind, likewise, grows towards its own more positive payoffs and away from the less positive and negative payoffs. It is by constructing a reward structure that society is most likely to achieve change. These rewards may be either internal or external. Our own applause, as Paul Samuelson suggested, may indeed be the greatest reward of all. No economist, however, can deny the significance of external reward, whether the applause of others or those more tangible things, such as subsidies, tax remissions, and price changes. Curiously enough, although psychologists seem to agree that rewards are more successful than punishments in the learning process, it seems harder to legitimate a reward structure. A suggestion, for instance, that dues paid by members of the American Economic Association should be scaled down if the organization or department to which they belong had a high proportion of women might be hard to legitimate, even though it might be effective. Nevertheless, the search for reward structures should go on.

4. Sanctions and Punishments

Punishments always seem to have been easier to legitimate than rewards, perhaps because of a belief that they are cheaper, in spite of much evidence that they do not contribute as much to learning. Nevertheless, there is one extremely good reason for the use of sanctions. In the case of public goods and public bads it is well recognized by economists that legitimated threat of some kind is essential if we are to avoid some "tragedy of the commons." Private reward structures, such as the market and the price-profit mechanism, are particularly well adapted to the provision of private goods, but are poorly adapted to public goods, where without some sanctions in the collection of taxes public goods would simply not be provided in adequate amount. Private reward systems are also poorly adapted to dealing with public bads such as pollution, of which role prejudice is a prime example, in the sense that everybody is somewhat diminished by it. The "freeloading principle" applies here, for if there are no sanctions it will pay the individual not to participate in a collective sacrifice required for the increase of a public good or the diminution of a public bad. To rely on purely private rewards and exhortations for the diminution of role prejudice is rather like trying to finance a government with purely voluntary contributions.

To say that sanctions are necessary does not mean to deny that there are acute problems both in the quantity and the quality of sanction, and that bad sanctions may be worse than no sanctions. This, however, does not excuse us from the search for good sanctions, which must not be larger than necessary, must be credible, legitimate, precise, equitable, and so on. Sanctions should call on violators and not on the innocent; they should be appropriate that is, any punishment should fit the crime and it should be recognized that, like all deterrents, punishments are most successful when they are not carried out. Economists will recognize, however, that no system of sanctions can be perfect and that there has to be some kind of tradeoff between imperfection in the system of sanctions which will inevitably lead to some failures of both justice and of deterrence, and the failure of the provision of public goods or the elimination of public bads which too weak a system of sanctions might involve.

The power of the American Economic Association to invoke sanctions is small indeed, and it could be argued that, apart from publicity which under some circumstances is itself a sanction a professional association should not legitimately engage even in linguistic sanctions like censure. Nevertheless, it is only realistic to be aware of the fact that sanctions of government can be invoked by groups in the society in the furtherance of what they believe to be general betterment. Even a profession is not exempt from participating in the society of which it is a part. It is important that vigilance be maintained against both the abuses of sanctions and their undue neglect, even though the primary emphasis of the intellectual community is properly on information, persuasion, and rewards.

The Committee is aware that it has a special task which is part of a much larger social process. Role prejudice in particular is by no means confined to women. Men also suffer from role prejudice, and it accounts for other kinds of discrimination than one based solely on sex. Nevertheless, as economists we believe in the division of labor and we believe that the pursuit of our particular task is to complement rather than compete with the labors of others in the long process of social betterment. The guidelines that we are proposing, while they are particularly applicable to our special case, are all simply examples of the fundamental general principle that where there is clearly not enough, the simplest and most necessary guideline is "more." In what follows we spell out in detail this essential principle.

Reprinted with permission from American Economic Review, December 1972, pp. 1049-1053 (this is Part I of the full report published there on pp. 1049-1061).