Introduction

I write and advise unapologetically from the perspective of a black gay business person. I advocate that purpose driven organizations should explicitly ground themselves in the learnings of social movements led by marginalized groups because for me and my community, movements have created intersectional spaces that speak to us deeply. Not only that but, when organizations embrace movements, it is profitable by capitalist standards and drives positive impact by social standards.

Strategic plans are about asking questions then developing our best hypotheses to meet demands of a given moment. In this week's newsletter, I am examining how my immersion in economic education informed the way I question the economic theories that underpin modern organizations. I hope this helps us see how centering diverse communities can drive strategy conversations that lead to more inclusive organization strategies.

Background

Economic theory is the logic by which all organizations knowingly or unknowingly conduct their activities across the public and private sector. As it turns out, Adam Smith’s economic “invisible hand” is not as invisible as he thought.

I struggled with economic theory during my undergraduate education because a lot of time was spent on equations but very little time was spent answering the key social question of my life...

Why does capital move unfairly leaving women and people of color out of the global economic picture? 

Even at 18 years old, I saw having an understanding of how and why this unfairness persists as essential to developing strategies to cope in the real world, no less attempt to thrive. Unfortunately I found no intellectual solace in my economics major and had to turn to other social sciences like sociology to shore up this insight.

The following chart confirms my instinct:

Image source: The International Monetary Fund  (IMF)

The chart from the IMF shows that combined less than 2% of economists' academic writing tackles gender or race.  Yet nearly 4 times the academic research is spent on a subject about which much more is known, monetary policy.

The lack of racial analysis in economic academia is alarming because systems of oppression are interlocking and of primary social concern. The reality is that at the same time social movements seek to abolish systems of policing that indiscriminantly kill black people, we must seek to abolish the economics that block anti-racist economic change. The movement is not an “either or” but is and must continue to be a “yes and” movement to ensure long-term success.

Definitions to set a common foundation

“Economics is defined as a social science concerned with the production, distribution, and consumption of goods and services.  It studies how individuals, businesses, governments, and nations make choices about how to allocate resources.” -Investopedia

In previous articles, we have talked about the wage gap, wealth gap, and value gap along lines of gender identity and race. So how is it that the social science concerned with choices of how to allocate resources can be fundamentally unconcerned with data that shows resources are allocated in a discriminatory manner across all types of markets? Closing these gaps would drive massive capitalist economic growth, so the question becomes, what are the structural and ideological barriers keeping us from research that reflects the urgency of now?

Barrier: Equations = Economic Purity

An obsession with “economic purity” and predictive equations has taken the “social” out of social science in economics. An obsession with mathematical equations based on ideas about perfect information, perfect people, and perfect markets instead of firmly balancing mathematics with the imperfect human experience. This obsession with proving human behavior instead of responding to it, feeds both the economics and business disciplines to present themselves as science, not social science.

Barrier: The myth of rationality

There are many other fundamental flaws with the underpinnings of economic theory but my favorite is the myth of rationality.  One human’s rational is another human’s foolish. The idea of rationality is illusive yet it is the foundation of modern economic theory.

As for our central question about why is race and gender underlooked we must ask, do the gatekeepers of economics who are mostly cis white males believe racial discrimination is rational? If so, the very foundation of modern economics is rotten at the core. If not, it is a variable on which labor markets are fundamentally built and discrimination should be a fundamental focus of economic study and research budgets.

How we change

Organization leaders and practitioners need to lead the way. We should actively seek to create positive racial and gender impact in our work and demand that the academic institutions support intersectional economic thinkers so that we have research and consultants that can support our efforts.

Some ideas to get involved:

• Get smart on the general academic spaces within economics
• Get smart on the racial and gender sides of economic history
• Learn the difference between capitalism, crony capitalism, and racial capitalism
• Use power you have in your job to expand who has a voice in your organization
• Hire consultants that bring an equity lens to their work
• Ask if intersectional economists make it through colleges where you’re an alumna

In academia, theory underlies practice. If we ensure research represents theory, the practice of economics and business disciplines will improve.