October 18, 2019

Women’s Money and The Duty We Owe To History To Rewrite It

I want to start with a story about my Nan. The fact that she is MY nan is not important. She was so typical of many women from her generation, with their prime in the mid-twentieth century, that she could be anyone’s Nan. Her husband, my grandfather, was an incredibly kind man. He retired as a Chief Constable in the NSW police force and was the senior policeman at Bathurst during the famous riots. 

My grandmother’s father passed away in 1919, as a hero of Gallipoli, but the date is important because prior to 1922, women did not have the right to equal inheritance, the upshot of which meant that she entered her marriage entirely dependent although Australia was one of the first countries that allowed married women to own property.

It is hard for many of us in the room to think about that kind of financial state but I think it is best summed up by Sir William Blackstone, a Privy Council Judge who famously observed that “the very being or legal existence of the women is suspended during the marriage and…consolidated into that of the husband.‟

My nan spent her life cooking and cleaning for her family and earned a government stipend doing cooking and cleaning in the police watchhouses that my grandfather ran and occasionally sitting as a JP. With her husband as the local copper, this situation wasn’t exactly the separation of powers that our constitution intended – but nonetheless it was the country and justice was efficient (if nothing else). 

She was smart relative to her level of education and access to information. She was hard-working, hard-wearing and for all intents and purposes, essentially invisible. Like a child, She has little control of her destiny – but that is how it was. She had no real property rights until she became a widow – a period of only 12 weeks in the winter of her life.  For the majority of her 68 years, she had been, systematically shut out of the financial and property markets, except alongside her husband – due to it being an explicit male system.

On a side note and utter technicality, I think that because she was in the public service while married, (cooking and cleaning for the NSW Police,)  Nan was in violation of the marriage bar – a law that made it illegal for women to work in the public service once they were married. My Nan, along with many women who weren’t married to a copper and had to lie about their marital status, became what was known as a white-veil criminals.  In 1956, this marriage bar was lifted for teachers, so that it was not illegal for women to be married and work as teachers. Of course they were both paid terribly because equal pay was not available until 1972, and arguably still not today.

Of how recent these dates are is not shocking enough, here are a few other things that had to be put up with well into the generation of my Mother.

It wasn’t until 1961 that women were able to gain access to the contraceptive pill but only via a prescription and with a husband. Many people don’t realise is that its purchase attracted a 27.5% ‘luxury tax’. It was a luxury available to wealthy, married women, to access the pill. 

It wasn’t until 1965 that women won the right to drink in bars. Young women take this simple freedom for granted now – and so they should. So they should.

Even after the legislative bars were lifted, working women even in our generation were routinely refused mortgages in their own right or were granted them only if they could secure the signature of a male guarantor. Without being so overtly gendered, the algorithms that determine who can participate in financial markets and property markets were written by men – men from a very different time, my Nan’s time.

The implicit norms that prevented my Nan, and millions of women like her from reaching her potential, were male norms. Lower-income, childcare responsibilities, and desperately low levels of superannuation all skew access to personal finance away from women – even to this day in the way some lenders calculate serviceability. 

Oscar Wilde said, “the duty we owe to history is to rewrite it‟. 

And that is exactly what Professor Lo, an econometrician working with the Computer Science and Artificial Intelligence Lab at MIT are doing. Rewriting history using Ai and the liberating power of big data to breakdown these implicitly male norms. 

Let me tell you about Professor’s Los application of Ai to the finance market.

In his pursuit of precision and a predictive way to dynamically manage investment – his book is called Adaptive Markets – Lo posits that the financial markets work more like biology than physics. He said markets didn’t behave ‘efficiently’ as we thought – They are evolutionary and chaotic and driven by lots of irrational decisions, like fear and greed.

His analysis of the factors that were predictive of default on mortgages had very little to do with being female. Some of the outputs of his research indicated that single and low-income women, even mothers, were less likely to default – I wonder if that is because they have so much more to lose.