Women And Central Banks: Symbolic Politics Versus Real Policies

20 11 2013

Earlier this year, there was a controversy in the UK about the number of women represented on the paper money in circulation in England and Wales. The controversy was sparked by a decision of the Bank of England to remove Elizabeth Fry from the £5 note and to replace her with an image of Winston Churchill.

Feminists took to Twitter and the blogosphere to protest the move, complaining that with the exception of Queen Elizabeth, whose face is on every coin, no women were represented by the UK money supply. A legal fund was established to cover the costs of a lawsuit against the Bank of England. Mark Carney, the recently appointed Governor of the Bank of England and former Governor of the Bank of Canada, decided that this purely symbolic issue wasn’t a battle he wished to fight. To shut the campaigners up, he took a few hours out of his day on 24 July to announce that novelist Jane Austen would be featured on new £10 notes. Carney actually travelled to Jane Austen’s house to make the announcement and do a photo-op. The announcement and the photo-op appears to have satisfied the campaigners.

It appears that the campaign in the UK has inspired a similar online campaign in Canada, where the new series of polymer banknotes has been criticized for its failure to include images of non-royal women. (Queen Elizabeth is on all Canadian coins).  The Bank of Canada recently retired a controversial banknote design that had featured images of some early twentieth century women who were suffragists (and also racists).

The replacement note features an icebreaker with no known racial biases.

You can see an online petition about the issue of women on Canadian currency here.  The preamble to the online petition compares the number of women on Canadian and British banknotes with the currency in Australia.

An all-male line-up on bank notes is not acceptable in Canada, anymore than it was in the United Kingdom. Australia provides an excellent example of including nation builders of both genders on its bank notes. Most of the current notes feature a notable woman as well as a man, and a website that provides biographies of each of the people depicted. 

Somewhat curiously, the petition doesn’t refer to US currency. On one level this is odd, as US money would be the foreign currency most familiar to Canadians. However, Canadian political debates often involve making comparisons to developments in other Commonwealth countries while studiously avoiding references to policies in the United States.

I have mixed feelings about the campaign to have more women on currencies. I suppose that if I had a daughter, I would want her to be exposed to positive images of successful women.  However, I think that this fixation on actual banknotes obscures more important gender-related issues related to  central banks.

As critics have noted, none of the members of the Bank of England’s Monetary Policy Committee are women.  (See image below). A recent study found that of the 175 decision-makers responsible for monetary policy in the nine OECD central banks surveyed, only 20 are women (11.4%). Moreover, neither Canada nor the United Kingdom have ever had a female central bank governor.  Perhaps this is a more important issue for feminists to discuss than the pictures on banknotes.

I would argue that an even more important question is the differential impact of monetary policy on women and men. Changes in monetary policy affect different groups in society differently.  Social class, region, and generation, are the most important categories here, but gender also influences how one experiences monetary policy. [1]

Deflationary policies tend to benefit retired people on fixed incomes at the expense of young people just starting careers. Japanese monetary policy, which is not coincidentally set by a gerontocracy, has been deflationary for over two decades.[2] This is a rare example of a Japanese government policy benefiting Japan’s women, who are, of course, famously long-lived.

In the UK,  where monetary policy is set by middle-aged men, the artificially low interest rates of recent years have hurt holders of annuities. In British society, annuitants are typically elderly.  Since women live longer than men, on average, the current monetary policy might be said to undermine the interests of women. Gender has certainly not yet been mainstreamed into monetary policy analysis.

No images of women appear on US currency, with the exception of the allegorical woman on the Liberty Dollar.  Some of the men on US currency were pretty despicable by today’s standards. Luckily, no slaveholders have ever graced the banknotes of either Canada or the UK! However, the politically incorrect nature of US Federal Reserve Notes hasn’t prevented a woman, Janet Yellen, from being nominated as the new chair of the Federal Reserve.  On a more practical level, the US is ahead of Canada and the UK. Of course, there is no evidence to suggest that Yellen’s monetary policies will differ from those of her male predecessor or that gender will influence her thinking about interest rates.

[1] Takhtamanova, Yelena, and Eva Sierminska. “Gender, monetary policy, and employment: The case of nine OECD countries.” Feminist Economics 15, no. 3 (2009): 323-353.;

[2] Paul Johnson Christoph Conrad, and David Thomson. Workers Versus Pensioners: Intergenerational Justice in an Ageing World. Manchester: Manchester University Press, 1989.

The MPC: White Male Central

Some Thoughts About the Appointment of Mark Carney as Governor of the Bank of England

26 11 2012

Driving home today, I heard that Mark Carney, the current Governor of the Bank of Canada, has been appointed Governor of the Bank of England. See here, here, and here.

The initial reaction of the commentators I heard on the radio was uniformly positive. One said that Carney’s appointment was an “inspired choice”. The commentators made frequent reference to Canada’s stellar performance since the 2008 GFC and the regulations that contributed to the stability of the Canadian banking sector.

As a business historian, I have a number of thoughts about today’s news.

First, historians need to do far more to explain how Canada came to develop such a stable, if non-innovative, financial system. I have an article in the current issue of Enterprise and Society that deals with one piece of this puzzle. However, there are many other important topics in the financial history of Canada that need additional research. It’s an under-researched area.

Second, business historians and business scholars more generally need to do more to try to understand how the reliance of the Canadian economy on natural resources has influenced its financial sector and made it different from that of, say, the United States, Britain, and other similar economies.  It may be that the success Dr Carney enjoyed in Canada is not replicable in the United Kingdom, which has a very different economy.

Third, we need to investigate how Canada’s historical experience with financialization (and de-financialization) compares with that of other countries. See here.

Fourth, it is somewhat ironic that the Bank of England is now turning to the Bank of Canada for talent, as the Bank of Canada was created in the 1930s in part because the experts in the Bank of England persuaded the Canadian government of the wisdom of such a policy. See here.

Fifth, given that the current British government believes that the United Kingdom is full and that the number of net migrants needs to be drastically cut, it is ironic that they are importing a non-British person to run the Bank of England.


Update: you may be interested in this piece on Mark Carney’s views of the Occupy movement. In 2011, at least, he was surprisingly sympathetic to it.

The Bank of Canada at 75

11 03 2010

Bank of Canada building

Canada’s central bank turns 75 today. There have been a number of stories about the anniversary in the media. See here, here, and here.

Governor Mark Carney’s speech on the anniversary says little about the actual history of the institution. The historical parts of his speech focused mainly on the decision of Bank to allow the value of the Canadian dollar to float in 1950. He said:

“In 1950, Canada faced adjustment problems of its own, and the Bank, as a learning institution responded. Large capital inflows threatened to drive up inflation in Canada in the context of our then-fixed exchange rate. In an effort to maintain price stability, the decision, unpopular internationally, was taken to float the Canadian dollar, which duly appreciated. While this was inconsistent with the rules of Bretton Woods, it was consistent with their spirit, as a floating dollar allowed both for domestic stability and for the market to determine the rate, rather than being set by government for national advantage. Canada’s move to a flexible exchange rate was a precursor to the breakdown of the Bretton Woods system 20 years later.”

I think that Mr Carney’s decision to focus on this episode is curious. Today, free-floating exchange rates are uncontroversial. Is it really necessary to defend this decision taken by the Bank in 1950? Aren’t there more controversial actions in the Bank’s history that he might wish to address? The really interesting thing about Mr Carney’s speech are the major omissions.

First, while Mr Carney spoke about the creation of the Bank in 1935, he did not mention that it was nationalized by the government three years later. Wouldn’t it be interesting to know why it was nationalized? Wouldn’t it be possible to draw some useful lessons from this episode?!?!?

Second, Mr Carney ducked the issue of whether the central bank should be independent of elected politicians. Arguments both in favour and against central bank independence can be made. Perhaps the most exciting event in the history of the Bank of Canada was the 1961 fight between Governor James Coyne and the government of John Diefenbaker. It is unfortunate that Mr Carney did not offer some thoughts on this issue. Perhaps Mr Carney wanted to avoid mentioning this episode because it made Canada look like a Mickey-Mouse country.

I looked at the materials on the BofC’s website related to the 75th anniversary. The PDF file “Canada’s Economy since the Founding of the Bank of Canada” set off my BS detector. It included a chart showing that “Real gross domestic product per person has grown almost sixfold over the past 75 years—an indication of improved economic well-being.” There is also chart showing that more Canadians own cars today than they did before the advent of central banking. The document says: “When the Bank of Canada was founded in 1935, the country was still widely regarded as a nation of “hewers of wood and drawers of water.” Back then, there were far more jobs in agriculture than in manufacturing. Today, four out of five jobs are in the services sector.”

Yeah, all of that is true, but it doesn’t necessarily prove that the Bank of Canada was a good economic manager. A somewhat more convincing stat would be to compare the rate of growth in the 75 years before 1935 and the 75 years since. Even then, it would be risky to draw any conclusions from the numbers, since so many other things were going on in the economy. Christ, even my undergraduate students should be able to see through that one.

The National Post published amusingly nutty perspective on the bank’s history from Martin Masse, a former advisor to erstwhile Foreign Affairs Minister Maxime Bernier. See here. Mr Masse thinks that it was a mistake for Canada to leave the gold standard.

If Andrew Coyne says anything interesting about the anniversary on his blog, I shall let my readers know.