Why aren't there more women at capitalism's heights?

By Chrystia Freeland
Friday, July 2, 2010

Watching Elena Kagan's confirmation hearings this week, it is tempting to declare -- as some have of late -- that we have entered the age of women. Not just in politics but in school and in the broader economy women are doing well. Yet this female triumphalism overlooks an important exception: The areas where the real money and power reside are occupied almost exclusively by men.

Consider the industries occupying the commanding heights of capitalism: technology and finance. Google, Amazon, Apple and Facebook were all founded by men and are led by male CEOs. All of the big Wall Street banks are run by men. Hedge funds and private equity firms -- where the real action is -- are a male preserve. Sebastian Mallaby's fine new history of hedge funds zeroes in on 14 chief protagonists -- all male. In 400 pages, he interviews only two female hedge fund executives. Mallaby didn't speak to more women because there are so few. Of the top 10 highest-paid hedge fund managers in 2009, none were women.

The absence of women at the economic summit is particularly significant because those at the very top of the income distribution have reaped the lion's share of the rewards in the past couple of decades. For all their success elsewhere, it is precisely this economic apex that women are failing to scale.

The most dangerous explanation for the lack of female plutocrats -- Oprah, of course, is in her own category -- is probably the one made infamous by Larry Summers (whose column I once edited): the view that women are less well-represented at the intellectual extremes and tend toward the genetic mean. Fewer women may be born with learning disabilities, the argument goes, but there are also fewer who are geniuses. Then there is the testosterone thesis: A growing body of research suggests that people with lower testosterone levels are more risk-averse, making women less likely to win big in the high-risk, high-reward global economy.

There is reason to be skeptical of these explanations. For one thing, the type of scientific aptitude measured by IQ tests may not be a prerequisite for financial superstardom: The uber-investor George Soros was an indifferent math student. And the financial crisis has shown that an extreme affinity for risk may not correlate all that well with long-term business success.

Surely social factors are at play, too. Whenever a job is high-status, we define it as being male. How many would picture a Wall Street "titan" in a skirt? When I studied in what was still the Soviet Union, almost all of the doctors and factory finance directors were women. In a system where power was vested in Communist Party functionaries, medicine and accounting were low-status professions -- or women's work. In the West, of course, those were considered masculine jobs. Where I grew up in northern Alberta, most of the futures traders -- an important business in a farming community -- are women. That's because the really high-paying jobs are in the (male-dominated) oil patch.

Feminists bear some of the blame for peddling their own brand of sexism: that women are more nurturing, better communicators. Some have argued that these skills are at a premium in the 21st-century economy. Yet that thesis doesn't do much for the young MBA grad trying to convince Wall Street she has the cojones to make big bets. Broadly speaking, feminism long defined itself, and allowed itself to be defined, as an ideology of the left, and discomfort with capitalism in its rawest form meant that finance was not an area it tackled head-on. It is hard to encourage girls to become business titans if part of your message is that business isn't such a good thing.

Feminists should applaud Kagan's poised performance on Capitol Hill, but let's not stop there. The job now is for women to accumulate their own capital.

The writer is global editor at large for Thomson Reuters. She is writing a book about the global super-elite.

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