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Queer economics looks at a particular example of ‘the tight connection between markets and the emergence and shaping of social identities. What makes it “queer” is focusing on the role markets have played in the birth of lesbian-gay-bi-transexual identities with particular interest in how certain identities are queered (i.e., their social valuation is switched across a social boundary between straight-respectable and gay-abjected). Queer economics also goes the other direction— namely, from perceptions of sexual orientations in markets to the behavior of individuals and businesses in markets resulting, for example, in inequality in earnings according to sexual orientation.
Conventional Economic Thinking
An economist ignorant of queer theory might imagine measuring the economic impact of queer culture on the circular flow of national output/consumption by measuring how many units of currency per year of queer culture are bought and sold. But then, does one count only sales of new lesbian, bisexual, gay, transgender, queer/questioning (LBGTQ) books, art, movies, television, radio, theater, receipts at gyms, Internet sex sites, sex clubs, and bars? Does one include phenomena deriving from LBGTQ cultures but aiming at mainstream culture such as dance clubs, Madonna videos, sexy couture, and even very mainstream clothing such as Abercrombie & Fitch’s with a gay esthetic permeating its marketing through, especially, Bruce Weber’s photos (McBride, 2005, chap. 2)? How should one account for designs created by LBGTQ people or sales by stores catering to LBGTQ consumers but also selling to straight folks?
This type of conventional thinking would see “the queer economy” as a distinct part of a nation’s gross domestic product. Yet this approach fails since boundaries for LBGTQ cultures do not exist, and this conventional thinking is challenged by the new field of queer political economy (Cornwall, 1997). LBGTQ cultures are more like queer glasses: They transform how people view all culture since they change what is permitted, what is valued, what is disparaged, and how we conceptualize our economic lives.
We begin then by looking historically at the queering of social identities. This took place especially at the rollover from the nineteenth to the twentieth centuries simultaneously with the redefinition of boundaries between classes and genders. This ver/mischung of the codifications of class, sexuality, and gender is of fundamental importance for queer political economy.
Part I: Markets Contribute to Creation of Identities Based on Sexual Orientations: The Rise of LBGTQ Identities
In the beginning, there were no sexual identities! Well, a bit more carefully, excluding earlier urban and cloistered, single-sex environments (e.g., see Boswell, 1980, on ganymedians in the eleventh century), there was no space in language and in thinking for what we label
LBGTQ. As D’Emilio (1983/1993) notes describing colonial North America,
There was, quite simply, no “social space” in the colonial system of production that allowed men and women to be gay. Survival was structured around participation in a[n extended] nuclear family. There were certain homosexual acts—sodomy among men, “lewdness” among women—in which individuals engaged, but family was so pervasive that colonial society lacked even the category of homosexual or lesbian to describe a person. It is quite possible that some men and women experienced a stronger attraction to their own sex than to the opposite sex—in fact, some colonial court cases refer to men who persisted in their “unnatural” attractions—but one could not fashion out of that preference a way of life. Colonial Massachusetts even had laws prohibiting unmarried adults from living outside family units. (p. 470)
In the nineteenth century in the United States, a bit earlier in Britain, a bit later in some countries and continuing in many places today, has been a transformation from, on one hand, an economic system where most people live and work in kinship groups in agriculture to, on the other hand, the market system with individualized wage labor and with more urban living. This transformation was engendered by and simultaneously contributed to reduced costs of transportation and communication resulting in the spread of concentrated factory production sites and the spread of wage labor. This, in turn, enabled people to be able to conceive of being economically independent from their kin and from agricultural activities. It allowed LBGTQ individuals to move to urban areas and to meet each other and to discover their often hidden (from themselves) same-sex erotic interests as they participated as customers of boarding houses, molly houses, bathhouses, coffee shops, and cruising spots in, for example, England in the eighteenth century. Somewhat similarly, though changed by the filter imposed by gender in Western cultures, lesbians emerged as a self-aware and socially distinguished group in the nineteenth and twentieth centuries (see Cornwall, 1997, for references).
A tight cognitive link between biological sex, gender, and sexuality (Rubin’s  “sex/gender system”; see also Escoffier, 1985), from our vantage, appears to have been hegemonic until approximately the end of the nineteenth century. It was taken for granted, as “natural,” that sexual object preference was determined by gender: “In the dominant turn-of-the-century cultural system governing the interpretation of homosexual behavior, especially in working-class milieus, one had a gender identity rather than a sexual identity or even a ‘sexuality’; one’s sexual behavior was thought to be necessarily determined by one’s gender identity” (Chauncey, 1994, p. 48). In other words, the concept of gender consisted of the dichotomy of “male” versus “female,” and this included sexual object choice. This tendency to focus on “gender” economized on cognitive categories, which simplified thinking by avoiding the ambiguities that can be expected in cases where there are small numbers of examples encountered by people as was certainly the case in rural settings.
The turn from the nineteenth to the twentieth century was a time not only of increasing urbanization in the United States but also of radical changes in the roles and extent of markets and the organization of production. The rise of wage labor in this country occurred early in the nineteenth century (e.g., “daughters of failing small farmers in the Northeast” began working in textile mills at Lowell; Amott & Matthaei, 1991, p. 295) and was followed in the second half of the century by dramatic growth of sex-segregated labor markets (Amott & Matthaei, 1991, pp. 315-348; Matthaei, 1982). Further and equally socially momentous was the rise of factories with thousands of workers under one roof, which led to enormous social upheaval as new codes for thinking about “productive” activities were developed.
Interaction Between Shaping Class Boundaries and Sexuality Borders
This blender of changing social roles created a vortex of changing social identities:
Working-class men and boys regularly challenged the authority of middle-class men by verbally questioning the manliness of middle-class supervisors or physically attacking middle-class boys. … [One contemporary] recalled, he had “often seen [middle-class cultivation] taken by those [men] of the lower classes as ‘sissy.'” The increasingly militant labor movement, the growing power of immigrant voters in urban politics, and the relatively high birthrate of certain immigrant groups established a worrisome context for such personal affronts and in themselves constituted direct challenges to the authority of Anglo-American men as a self-conceived class, race and gender. (Chauncey, 1994, p. 112)
These struggles over where to map key social boundaries led
politicians, businessmen, educators, and sportsmen alike [to protest] the dangers of “overcivilization” to American manhood. … Theodore Roosevelt was the most famous advocate of the “strenuous life” of muscularity, rough sports, prizefighting, and hunting. … The glorification of the prizefighter and the workingman bespoke the ambivalence of middle-class men about their own gender status … a “cult of muscularity” took root in turn-of-the-century middle-class culture. … Earlier in the nineteenth century, men had tended to constitute themselves as men by distinguishing themselves from boys. … But in the late nineteenth century, middle-class men began to define themselves more centrally on the basis of their difference from women … gender-based terms of derision [e.g., sissy, pussy-foot] became increasingly prominent in late-nineteenth-century American culture. (Chauncey, 1994, pp. 113-114)
This oversimplifies and ignores resistance to this respecification of gender (“They wonder to which sex I belong”: Matthaei, 1995; Vicinus, 1992), but this recoding of masculinity seems to have been powerful at this time.
Closely tied to this redefinition of “male” in the 1890s was redefinition of class:
Men and women of the urban middle class increasingly defined themselves as a class by the boundaries they established between the “private life” of the home and the rough-and-tumble of the city streets, between the quiet order of their neighborhoods and the noisy, overcrowded character of the working-class districts. The privacy and order of their sexual lives also became a way of defining their difference from the lower classes. (Chauncey, 1994, p. 35)
Just as a new “face” was being put on not-male (i.e., not-male became “female” instead of “boy”), so “middle-class” became “clean-face-and-well-laundered/mended-clothes” versus the “dirty” faces of slums. A quickly judged face was put on people living in slums: “The spatial segregation of openly displayed ‘vice’ in the slums had …ideological consequences: it kept the most obvious streetwalkers out of middle-class neighborhoods, and it reinforced the association of such immorality with the poor…. Going slumming in the resorts of the Bowery and the Tenderloin was a popular activity among middle-class men (and even among some women), in part as a way to witness working-class ‘depravity’ and to confirm their sense of superiority” (Chauncey, 1994, p. 26).
This simultaneous redefinition of gender, class, and occupations spilled over, “infected,” the definition of sexual orientation that was occurring at the turn of the century:
In a culture in which becoming a fairy meant assuming the status of a woman or even a prostitute, many men … simply refused to do so. … The efforts of such men marked the growing differentiation and isolation of sexuality from gender in middle-class American culture. … The effort to forge a new kind of homosexual identity was predominantly a middle-class phenomenon, and the emergence of “homosexuals” in middle-class culture was inextricably linked to the emergence of “heterosexuals” in the culture as well. If many workingmen thought they demonstrated their sexual virility by playing the “man’s part” in sexual encounters with either women or men, normal middle-class men increasingly believed that their virility depended on their exclusive sexual interest in women. Even as queer men began to define their difference from other men on the basis of their homosexuality, “normal” men began to define their difference from queers on the basis of their renunciation of any sentiments or behavior that might be marked as homosexual. (Chauncey, 1994, p. 100). Furthermore, “the queers’ antagonism toward the fairies was in large part a class antagonism … the cultural stance of the queer embodied the general middle-class preference for privacy, self-restraint, and lack of self-disclosure” (Chauncey, 1994, p. 106).
Thus, it is no accident that this social earthquake of a lingual transformation in American culture, creating as “pervert” the distinct person now known as lesbigay, coincided with the rise of wage labor markets. John D’Emilio (1983) and Jeffrey Weeks (1979) have sketched this well for gaymen: how gender segregation in workplaces and in institutions for living and for social interaction such as clubs, baths, bars, and access to “public” spaces facilitated the evolution of notions of sexual identities. Especially important was the growth of wage labor in urban areas allowing gaymen to support themselves outside of traditional, kin-based agricultural networks,1 and this, in turn, fed the rise of gay bars, baths, and so on, which, again in turn, made urban labor markets increasingly alluring for gaymen.
As Julie Matthaei (1995) notes, D’Emilio’s “argument is much stronger for men than for women” (pp. 31-32, note 11; see also Chauncey, 1994, p. 27). The very different values that evolved for women compared to men in the last half of the nineteenth century in American culture (D’Emilio & Freedman, 1988) and the very different earnings levels resulting from the sex segregation of labor markets (Matthaei, 1995, p. 13) led to rather different manifestations of same-sex eroticism for women than for men. Thus, Matthaei (1995, pp. 12-14) offers tangible accounts of women whose transgendered performances in prominent public careers were “masterful” for their entire adult lives. Women passed as men, and their partnerships passed as marriage at a time when apparently few men exhibited similar reasons for living in drag. Analogously, while two women (neither transgendered) could be referred to as living in a “Boston marriage,” no comparable term seems to have been used for two men living together. Thus, it seems important for socioeconomists to allow for the possibility of a (general equilibrium type of) simultaneity or interdependence in the social articulation of gender, sexuality, and labor and product markets.
What is “lesbian” and what is “gay” are fluid and are historically contingent on other social constructions. This poses a danger for economists who are as mentally conditioned as any other market players to seek discrete, firm economic identities that can be captured by yes/no decisions (zero/one dummy variables) across history. Although it may appear very likely (I conjecture, at our 2009 stage of imperfect “knowledge”) that Sappho, Jane Addams, and Willa Cather may have shared a chromosomal structure differentiating them (with “statistical significance”) from the chromosomal structures of more than 90% of the women who have lived on planet Earth, to then jump from conjectured or measured chromosomal patterns to inferences about the constructed trait now labeled “lesbianism,” not to mention observed market behavior or even erotic activity, seems foolish if lesbianism and, indeed, sexuality in general are lingually based and are as fluid over time and place as lingual structures are easily observed to be. Thus, Jane Addams was able in the 1890s to exhibit market behavior that a cliometrician might take for clear evidence of lesbian “identity”—that is, arranging in advance on her speech-making travels that each hotel provide a room with just one double bed for her and her “devoted companion,” Mary Rozet Smith (Faderman, 1991, pp. 25-26)—yet a few decades later, Willa Cather kept her relation with her partner, Edith Lewis, of almost 40 years private until her death (O’Brien, 1987, p. 357). In between, the notion of “romantic friendship” had been replaced in Euro-based lingual cultures by the psychiatric diagnosis/identity-disorder of lesbianism.2
Queer Theory’s Perspective on Social Boundaries: Articulating What Is Unspeakable, Unthinkable
The term queer theory was first used by Teresa de Lauretis (1991) to describe “the conceptual and speculative work involved in discourse production, and… the necessary critical work of deconstructing our own discourses and their constructed silences” (p. iv). This focus on the use of language—on what is explicit and what remains hidden— studies people’s discourse as a window into how these humans think and, especially, into how we (often unconsciously) categorize people and actions.
Humans depend on their linguistic communities to think, that is, to perceive, categorize, and articulate our desires (with erotic desires having an almost lexicographic priority). de Lauretis (1991) aimed to “problematize … to deconstruct the silences of history and of our own discursive constructions” (pp. iii, xvi). Judith Butler (1993) has noted,
The construction of gender operates through exclusionary means, such that the human is not only produced over and against the inhuman, but through a set of foreclosures, radical erasures, that are strictly speaking, refused the possibility of cultural articulation. (p. 8)
The object of study in queer theory is the social articulation of same-sex eroticism and why, in recent centuries in Western-dominated cultures, this human interaction has been articulated as queer, as abject Other. The subtlety and complexity of this articulation led many, most notably Michel Foucault, who were searching for an analytical handle in this domain of socioeconomic inequality to the notion of discursive structure. I describe this as a mental structuring of concepts, each of which has an “aroma” of connotations, where these concepts are linked via physically developed neurological links that guide, often in a probabilistic and certainly in a nonconscious way (Damasio, 1994, p. 215), how we make inferences about what is “true”—hence, Foucault’s (1972, p. 191; 1994, pp. 13, 68, 89) term épistémè. In short, discursive structures are (largely) linguistic cognitive structures—physically instantiated as ready-to-fire neural pathways in our brains—which develop as we learn our mother tongues and as we learn to understand, to map, our social embedment. Central to this queer thinking are the concepts of disgust, abjection, and Otherness.
The Social Roles of Disgust, Abjection, and Otherness
In colonial America, [convicted] sodomites were more often than not lower-class servants, and the shoring up of patriarchal power was imbricated in nascent class divisions. One has only to look to other colonial situations of the time to see that that was not the only way the category of sodomy was being mobilized; the Spaniards, for instance, prone to see sodomites among the Moors in Spain, saw native cultures as hotbeds of irregular sexual practices. (Goldberg, 1994, p. 7)
Stallybrass and White (1986) note, “The bourgeois subject continuously defined and re-defined itself [as a way of distinguishing itself and its social legitimacy vis-à-vis the nobility and landed gentry] through the exclusion of what it marked out as ‘low’—as dirty, repulsive, noisy, contaminating. Yet that very act of exclusion was constitutive of its identity. The low was internalized under the sign of negation and disgust” (p. 191). Slightly earlier, Stallybrass and White summarized this: “[Social] differentiation … is dependent upon disgust” (p. 191, emphasis added).
The ideas of abjection and of Otherness require careful explanation. The process of abjection gets started in the preverbal, deepest learning and mental formatting occurring when we are babies, and we develop perceptions of most-feared horrors that we may conflate with excrement, which is threateningly close to, even part of, ourselves. Since Freud and Lacan, there has been significant storytelling about such overarching psychic events shaping us. Julie Kristeva’s (1982) formulation of how we transfer the symbolic and emotional meaning of these early experiences into verbal (and oneiric) articulations throughout the rest of our lives has been especially useful in queer theory.
Reading “Otherness” as mere difference, as simply being a mathematical reflection across an arbitrary and rather inconsequential boundary, is easy when transgenders such as RuPaul appear so sleekly, so easily on MTV. This is how most of the students in my queer studies classes who are not lesbigay first read “Other.” Those who have not been subjected to the shame of being named faggot/dyke and of baring what they have (synecdochically) learned are their “most private,” most individualizing parts of them-selves before taunting gym classmates do not instantly jump to what queer scholars such as Judith Butler, Foucault, and de Lauretis or even writers such as Jean Genet and Dorothy Allison have grappled with. It is not enough to recite that the bloodiest hate crimes appear to be linked to the Levitical teaching about abomination, teaching that is carried out explicitly or implicitly by almost all churches that, at best, merely tolerate those lesbigays who adopt the pose of synthetic straight (i.e., desiring “marriage” and all the other trimmings of liberal respectability we have inherited). It is not sufficient to point out how these teachings seem to encourage some people to follow a metanorm (Axelrod, 1986) to shoot/stab/bind-and-push-off-quarry-in-February-in-Vermont faggots and dykes. Reciting these episodes of brutality seems to communicate nothing of what Other describes.
So let’s proceed didactically: “A performative is that discursive practice that enacts or produces that which it names” (Butler, 1993, p. 13). An example of a performative speech act is the creation of “currency”: The inscription “This note is legal tender for all debts, public and private” is exactly what makes currency legal tender. Performatives gain collective credibility only through constant reiteration. Thus, currency gains currency only through its reiteration and its anticipated reiteration by juridical institutions and by private traders.
Another familiar performative is the utterance “I pronounce you man and wife.” When certain institutionally designated people say this is a fact, then it becomes a fact, and it remains a fact to the extent that the husband and wife and their social interactions reiterate it. Similarly, “the norm of sex takes hold to the extent that it is ‘cited’ as such a norm, but it also derives its power through the citations that it compels” (Butler, 1993, p. 13). It does this by naming us, sexing us with culturally assigned connotations that place us in social space. Indeed, “the subject, the speaking ‘I,’ is formed by virtue of having gone through such a process of assuming a sex” (Butler, 1993, p. 3, emphasis added).
This assignment of gender roles gives us not only gender but also what we now call sexuality. This social process shaping female/male identities is the discursive means by which the heterosexual imperative enables certain sexed identifications and forecloses and/or disavows other identifications. This exclusionary matrix by which subjects are formed thus requires the simultaneous production of a domain of abject beings, those who are not yet “subjects” but who form the constitutive outside to the domain of the subject (Butler, 1993, p. 3).
“Abjection (in latin, ab-jicere) literally means to cast off, away, or out…. [T]he notion of abjection designates a degraded or cast out status within the terms of sociality….[It] is precisely what may not reenter the field of the social without threatening psychosis, that is, the dissolution of the subject itself … (‘I would rather die than do or be that!’)” (Butler, 1993, p. 243, note 2).
In particular, Foucault (1990a and especially 1988 & 1990b) has sketched how Western discursive structures since late antiquity have very slowly evolved to make the male-female couple the social-civic atom (Foucault, 1988, p. 153). This evolution also made monogamy, “sexual monopoly” (Foucault, 1988, p. 149), a hegemonic doctrine and obliterated awareness—people stopped taking for granted—that there are good reasons for erotic intercourse other than procreation (Foucault, 1984/1990b, p. 181). Finally, Foucault (1978/1990a) most forcefully initiated linguistic study of the “exclusionary matrix by which subjects are formed” (i.e., the social process through which one’s gender became more rigidly linked to the sex of her or his erotic partners).
Foucault (1978/1990a, p. 103) argued that this occurred through the development of the concept of sexuality. The breadth of Foucault’s vision and of what might be involved in understanding the formation of social identities can be glimpsed from his careful analysis of what he saw as a change in the way “truth” is discovered/revealed (episteme) from the seventeenth to the nineteenth centuries (Foucault, 1966/1994, 1972) plus his identification of “four great strategic unities which, beginning in the eighteenth century, formed specific mechanisms of knowledge and power centering on sex” (Foucault, 1978/1990a, p. 103) and were developed and “applied first, with the greatest intensity, in the economically privileged and politically dominant classes … the ‘bourgeois’ or ‘aristocratic’ family” (Foucault, 1978/1990a, p. 120).
- “[T]he first figure to be invested by the deployment of sexuality, one of the first to be ‘sexualized,’ was the ‘idle’ woman” (Foucault, 1978/1990a, p. 121). This was the wife of the bourgeois market player.
- The alarms about overpopulation economists associated with Robert Malthus brought about a “socialization of procreative behavior: …’social’ and fiscal measures brought to bear on the fertility ofcouples” (Foucault, 1978/1990a, pp. 104-105). This use of taxes/ prohibitions to promote (for some governments) or restrain fecundity (some rapidly growing countries) continues to be a frequently employed and debated type of public policy.
- “A psychiatrization of perverse pleasure: the sexual instinct was isolated as a separate biological and psychical instinct; a clinical analysis was made of all the forms of anomalies by which it could be afflicted” (Foucault, 1978/1990a, p. 105). Thus arose in the late nineteenth century the diagnosis of the pathological condition (identity) of being homosexual.
- “As for the adolescent wasting his future substance in secret pleasures, the onanistic child who was of such concern to doctors and educators from the end of the eighteenth century to the end of the nineteenth, this was not the child of the people, the future worker who had to be taught the disciplines of the body, but rather the schoolboy, the child surrounded by domestic servants, tutors, and governesses, who was in danger ofcompromising not so much his physical strength as his intellectual capacity, his moral fiber, and the obligations to preserve a healthy line of descent for his family and his social class”
(Foucault, 1978/1990a, p. 121). Laqueur (2003, e.g., p. 13) has confirmed Foucault’s view, noting how historically striking is this sudden social focus on masturbation: For well over a millennium and a half, masturbation was viewed as a minor theological infraction of good behavior, but in the eighteenth century, it suddenly reared up in Western social imagination as an especially heinous sin, perhaps the MOST heinous sin. It only gradually started to fade in importance in the twentieth century after the newly developed rainbow of erotic sins (the “psychiatrization of perverse pleasure”), ranging from homosexualities to diverse heterosexualities (heterosexuality was initially coined to label a particular variant of psychosexual “disease”), had grabbed the imagination of social facilitators: especially doctors and also, later, psychologists, reformers, ministers, and lawyers.
These newly positioned social facilitators, enunciators of norms of respectability, abjected so-called homosexual identities as exemplars of Other. The bourgeoisie “must be seen as being occupied, from the mid-eighteenth century on, with creating its own sexuality and forming a specific body based on it, a ‘class’ body with its health, hygiene, descent, and race” (Foucault, 1978/1990a, p. 124) This “queering” of certain behaviors and individuals, labeling them egregious transgressors of respectability, led those so labeled to react by adhering more strongly to each other as a distinct group, even flaunting the condemned behavior. Thus, the queer imprecations were queered by being embraced by their targets in newly evolving niches in labor, housing, and entertainment markets.
Somewhat similar to the way in which, at the end of the eighteenth century, the bourgeoisie set its own body and its precious sexuality against the valorous blood of the nobles, at the end of the nineteenth century it sought to redefine the specific character of its sexuality relative to that of others, … tracing a dividing line that would set apart and protect its body. (Foucault, 1978/1990a,pp. 127-128)
Thus, Foucault conjectured that the social construction of the identities that we now term lesbian, gay, bisexual, and transgendered was part of, intimately tied to, the emergence of markets in Western societies. As noted above, George Chauncey (1994, pp. 13, 27, 111-126), Lillian Faderman (1991), John D’Emilio and Estelle Freedman (1988), and David Greenberg (1988) trace some of the details of this lingual construction of class boundaries as well as the coevolution of concepts of sexuality with institutions such as markets, churches, military training, and professional networks of doctors, social workers, artists, businesspeople, educators, professors, research people, and so on in the United States. This process leads to people generally investing heightened importance to categories we now label LBGTQ but had often hitherto seemed not worthy of much public notice.
Part II: Perceptions of Sexual Orientations Affect Markets
This construction of LBGTQ identities is the lingual heritage of those growing up and learning to think in market-dominated cultures. This lingual inheritance determines in large part what we can think by determining the vocabulary of notions and connotations that are encoded in the neural circuits in our brains. It is these “flavors”/”smells” (i.e., connotations) of social identities that influence our perceptions of social labels and so enable us to articulate ideas about them. We grow axons and dendrites on neu-rons to connect neurons through their generation of and reception of neurotransmitters and thereby create these neural circuits (Panksepp, 1998, pp. 65, 85, 182-184). This physical embodiment of connotations in our brains makes the association of certain traits (e.g., “disgusting”) with a social identity “automatic” and almost instantaneous. It precedes and provides the basis for “thinking,” for deliberative cognition.
For just one example, this social language (and associated values and connotations) has made certain erotic desires and activities unspeakable, especially for politicians, and so has determined what data on erotic preferences and activity are (not) publicly funded and are (not) available as we seek to design public health measures to deal with human immunodeficiency virus (HIV) or to ascertain inequality in earnings (Badgett, 1995; Klawitter & Flatt, 1998).
Inequality in Earnings by Sexual Orientation
Part I sketched the intensity of “antigay animus” (Badgett, 2007, p. 25), but is there any evidence that this animus actually affects markets? This evidence is important even if we accept the prevalence of antigay animus because it is often argued that markets can act to discipline would-be discriminators who would refuse to hire LBGTQ people or who would pay them less than other equally qualified people for the same work. Indeed, this is a standard economic argument since
- the would-be discriminator is giving up profit by paying more than needed to accomplish the firm’s hiring goals by not hiring less expensive and/or more qualified workers who happen to be LBGTQ and
- competitive markets drive profits down to the minimum required to stay in business so this firm would be driven out of business.
This is the conventional neoclassical argument that, however, has been empirically refuted for, just for example, racial inequality, by Jim Heckman and Brook Payner’s (1989) demonstration that passage of the 1964 Civil Rights Act had an immediate effect on hiring black employees in textile mills in South Carolina. What blocks this neoclassical competitive-markets argument from dissolving inequality in employment is social norms that impose costs on those who violate them, as Heckman and Payner argued.
Badgett (2007, p. 27, Table 2.1) summarizes 12 econometric studies of inequality beginning with her pioneering work in 1995: “[Almost] every study using US data has found that gay/bisexual men earn less than heterosexual men, with a range of 13 percent to 32 percent” (p. 29). In particular, earnings for gay and/or bisexual men in the United States and the United Kingdom are estimated to range from 2% to 31% lower than for comparable straight men with similar human capital characteristics (education, age, region of country, partnership status, and, sometimes, occupation). Lesbians and bisexual women, on the other hand, in similar studies earn 3% to 27% more than straight women in most studies, although 3 of the studies found lesbians and bisexual women earning slightly less than straight women. As Badgett notes, “Lesbians do not earn less than heterosexual women, at least not when control-ling for our imperfect measures of experience and human capital” (p. 32). And lesbians do earn less than straight men with similar productivity characteristics.
The preceding evidence of inequality tied to sexual orientation suggests that there might be an ameliorative role for antidiscrimination laws. The effects of local laws, however, are not entirely clear. The first study of them (Klawitter & Flatt, 1998) found “no impact on average earnings for people in same-sex couples” (Carpenter & Klawitter, 2007, p. 279) compared to straight couples. Carpenter and Klawitter’s (2007) more recent study ends with a very weak conclusion on this potential ameliorative effect of legislation: “Policymakers should not abandon efforts to adopt and enforce policies that prohibit labor market discrimination against sexual minority individuals on the belief that they are ineffective” (p. 288). This tepid-ness results from their having found significant positive parameters for the effects of local antidiscrimination laws (in the presence, also, of a state law banning such dis-crimination) on gay-bisexual male earnings only for the effects of laws banning discrimination by private employers on the earnings of government workers! For female government workers, laws banning discrimination both by private employers and by public employers had a significant positive effect on earnings, but for both gay and lesbian employees of private employers, there was no significant effect.
What seems to be going on are two key selection effects:
- Selection by LBG people to live/work in safer areas with protection against discrimination: A much higher fraction of the survey’s LBG people (compared to straights) lived in localities with laws banning discrimination on the basis of sexual orientation (Carpenter & Klawitter, 2007, p. 283, Table 19.1), and also a higher fraction of LBG people lived in these areas than lived in areas with no laws banning discrimination. Badgett (2007) also notes that gay and bisexual men are choosing occupations where their coworkers will have less hostility toward them “or are going into more heavily female occupations than are heterosexual men” (p. 30).
- Selection of which localities adopt laws banning discrimination against LBG people: Localities with nondiscrimination laws have higher earnings for all individuals, both straight and LBG, than do localities without such laws. This suggests that more prosperous and urban areas are more likely to adopt such laws and also provide a more welcoming locale for LBGTQ people (Carpenter & Klawitter, 2007, p. 285).
The work by Carpenter and Klawitter (2007) is one of the few studies using data from a large survey (California Health Interview Survey [CHIS] of 40,000 households in California in 2001 and 2003) where sexual orientation is determined by respondents’ own reports (“Do you think of yourself as straight-heterosexual, gay (lesbian), or bisexual?” Carpenter & Klawitter, 2007, p. 281). This is one of the few direct sources of data on respondents’ sexual orientation in the United States, so researchers have had to be very ingenious to tease this out of earlier data sources.
The first econometric work on LBGTQ inequality in earnings by Badgett (1995) used the General Social Survey (GSS) and inferred respondents’ sexual orientation from their relative lifetime frequency of same-sex behavior since age 18. The GSS gives a rather small sample for each year, which is overcome by the 1990 and 2000 U.S. censuses where, however, there is no direct question on sexual orientation; rather, same-sex behavior is inferred for people who indicate they have an “unmarried partner” of the same sex. But even here, Badgett and Rogers (2002) found that 13% of couples in one survey of “cohabiting same-sex couples” (Badgett, 2007, p. 22) and 19% in another survey of such couples did not choose the “unmarried partner option” in the 2000 U.S. census, with this propensity not to respond being biased according to income: Lower income couples were less likely to choose this option on the census. This would tend to bias upwards resulting estimates of LBGTQ incomes, which means that the inequality in earnings according to sexual orientation is even stronger than indicated above, especially for gaymen.
The confusion on measuring the effects of local antidiscrimination laws might be due in part to the market impact of antigay animus being hidden by operating indirectly through a wage premium paid to married employees, all of which, until very recently, had to be in straight marriages. As Carpenter (2007) notes, “Employers who are uncertain about a worker’s sexual orientation might plausibly use marriage as a signal for heterosexuality” (p. 77). He finds, again using CHIS data on cities in California, that the male marriage premium in California is large (18% after allowing for earnings differences due to age, ethnicity, education, urbanicity, and occupation) and, indeed, it is largest in San Francisco, which has the highest percentage (28.4%) of adult men younger than age 65 say they are gay or bisexual. The premium is lowest in Riverside, which has the lowest percentage (4.5%) of adult men who are gay or bi. The marriage premium is also found to increase nonlinearly with age, as we would expect since an unmarried man age 50 is less likely to be straight than is an unmarried man age 20.
Markets Segmented by Sexual Orientation
A response by profit-seeking business to the emergence of distinct LBGTQ people was to aim products (e.g., club clothes, bars and clubs, books, music and periodicals, Internet sites) to them. This formation of queer market niches gave these businesses a degree of brand-name distinctness and hence market power by which to earn monopoly profits. Of course, this evolution of markets reinforces the social cohesion of self-identifying participants in queered markets, but it can also seduce non-queer, self-imagined non-homophobic people (“metrosexuals”) as well as not-gay-self-identified LBGTQ people who discover a certain pleasure (perhaps of tweaking norms of respectability) gotten when consuming these newly queered goods (e.g., going to LBGTQ dance clubs). This evolution suggests to marketers-producers that they can enlarge profits by aiming at self-conceived “sophisticated” heterosexuals.
Thus, we might argue that LBGTQ identities get doubly queered by markets: They act as a social blender by mixing and matching body-costume-identity parts across whatever social identities currently exist. This both reifies boundaries between identities (e.g., queering previously straight products like music/dance venues) and also dissolves these cultural boundaries (“queering” LBGTQ product niches by seducing non-LBGTQ people to join LBGTQ consumers and so making this product less queer). Thus, queering is like negation: Double queering results in un-queering.
Queer political economy shares with feminist and race theory interest in the social articulation of cognitive codes (what in psychology are termed schemas) that stigmatize bodies with certain traits and so amplify social inequality. This interest in the perception of bodies differs from both neoclassical analysis and classical Marxian analysis, which have constructed analytical methods that ignore “desiring bodies” and instead model the interaction in markets of bodiless actors whose “desires” have been largely erased. See Cornwall (1997) for detail on the erasure of preferences from economics.
Microeconomic analysis that ignores the interactions between social labeling and the operation of markets distorts our economic policy making, including, for example, marketing, land use planning, and fecundity projections. In particular, it blinds us to substantial inequality in earnings and occupational choice and the evolution of market niches by sexual orientation.
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