Capitalisn’t: Sex, Power, and the Ivory Tower

Kate: Just a quick disclaimer. Our descriptions of the case and events in this episode are based on media reports and allegations in court documents.

Hi, I’m Kate Waldock from Georgetown University.

Luigi: I’m Luigi Zingales at the University of Chicago.

Kate: You’re listening to Capitalisn’t, a podcast about what’s working in capitalism today.

Luigi: And, most importantly, what isn’t.

Kate: We are here at the University of Chicago recording together for the first time in a really long time.

Luigi: In a really long time, indeed.

Kate: We’re here for a podcast retreat, which took place yesterday. It was a really lovely time. We did trust falls, we built a log cabin. We did an escape the room. It was a lot of fun.

Luigi: No, we didn’t. We should thank a lot of our listeners who sent us feedback. Very useful.

Kate: Yeah, that’s true. We’ve had a survey up on our website, and you can still go there and let us know what you think about the podcast. On today’s episode, “Sex, Power, and the Ivory Tower,” economists experience their first major Me Too movement. What does it mean for women broadly, and what can we do to prevent situations like this in the future?

This situation revolves around an assistant professor of finance, Enrichetta Ravina. She was formerly at Columbia. Now, she’s visiting Northwestern. Luigi, do you know Enrichetta?

Luigi: Yes, I do.

Kate: How do you know her?

Luigi: I met her several times, because she was an advisee of Paola Sapienza, who is a coauthor of mine. I met her through her, and I met her on the job market. I think she had a very interesting paper on the job market.

Kate: All right, so for some background, Enrichetta is an assistant professor of finance. She does research on how individuals make investment decisions, particularly those that pertain to retirement savings. She started out at NYU for a couple of years. She was poached by their uptown neighbors, Columbia. When she started at Columbia, she was given the opportunity to work with a tenured, senior professor, Geert Bekaert, who offered her access to some proprietary data on four million people and their retirement decisions.

As they began to work together, and as she spent more and more time cleaning this data to make it usable for research, she alleged in court that Geert became increasingly sexually aggressive towards her. His behavior ranged from either talking about his sexual exploits to touching her inappropriately.

At this point, she filed some complaints against him to Columbia’s higher-ups. She alleged that she was allowed to take a paid leave, but that that paid leave was later revoked. Columbia accelerated her tenure process, even though there were letters written by other faculty members at Columbia stating that junior faculty needed to be protected, and that at the rate that her tenure review was going, her work couldn’t be properly evaluated. So, there was a trial in the Southern District of New York, which resulted in a finding that Geert was liable for retaliating against Enrichetta, and ordered to pay $1.25 million in damages. Although, it should be noted that he wasn’t liable for damages related to gender discrimination.

Luigi, you wrote an article on ProMarket.org called, “Why Every Good Economist Should Be a Feminist.” What compelled you to write this article?

Luigi: I’m a man, but I’m not deaf or blind. Over my life, I’ve seen a lot of cases of discrimination. Let me just mention one. When my first wife was studying in Italy, architecture, she experienced a very unpleasant situation, because all the professors were male. It was very hard to get ahold of them, for them to be the mentor of the master’s thesis. It was clearly a situation in which the female candidates were competing for attention from the professors. Competing in, if you want, with sexual innuendos. I thought that situation was wrong, but at the time I didn’t have the legal language to understand what the problem was.

Then, I came to the United States, and I discovered all the movement about sexual harassment. For me, it was very important when I listened to the Anita Hill case in 1991. You probably were not even born when this case took place—

Kate: I was a kid, but I was born.

Luigi: That was a very interesting case, because that was the first time that you had a case of alleged harassment that was debated in front of the entire country. I have to say that, coming from Italy, it was at the beginning a bit hard to even understand what the issue was, because there was no allegation of any physical contact. It was just an unfriendly environment that was created by Clarence Thomas. So, that reminded me a lot about the situation that my wife at the time experienced in Italy. But then, I also study contract economics, and I think that neoclassical economics tends to ignore the issue of power. They try to put power under the rug, assuming that markets are perfectly competitive, that nobody has any control, that everything is determined by technology and taste, and market equilibrium.

But when you start working on incomplete contracts, you realize how important power is in many situations. That also gave me the mental framework to understand why power imbalances can be so detrimental. In that particular case, why is it right that professors should not have relationships with students? Because even if the student is consensual, the power imbalance really shifts the dynamic and creates an environment which is very detrimental for everybody else.

How do you feel if the professor sleeps with a colleague of yours? Regardless, that colleague would be favored in one way or another. That creates an unequal situation for everybody. So, that’s the reason why this case piqued my interest, because it’s not so much about the sexual harassment that was not found in court, but this issue of power imbalance that there is in academia. I think that particularly regarding the control, or the possession, or the influence over important datasets.

Kate: Yeah, so to be fair, I think we should discuss Geert’s perspective on this issue, which was that once he brought Enrichetta onto this paper and into the process of using this data, she signed her own agreement with the company, which was pretty clear. At that point she was working with the data. She was training RAs to work with the data, and so she obviously at that point had her own relationship with the company. So, how could he have really had all the control? How could he have held all the power to be able to hold her up essentially?

Luigi: From a technical point of view, I think that the power of the data rested with a company, not with Geert Bekaert. However, there was a relationship between Geert Bekaert, Enrichetta, and the company. This relationship was not on equal footing, because Geert was a consultant for this company for a long time. There was some relational trust between the two that could be used to shut out, to some extent, Enrichetta from the project. Or, to some extent, delay the entire project. I think that that is what, this is my understanding, why the jury found retaliation.

Kate: Related to this point about power, how does one reach out to companies and get access to proprietary data? This is something that I’m trying to do right now. It’s something that I’m very frustrated about, because there has just been this constant back and forth with these companies. One second they say yes. One second they say no. So, most of the time when people have access to proprietary data from a company, it’s because of personal connections. It’s because someone knew someone from college, or someone had done some consulting research for somebody.

There’s usually some sort of cronyism involved. That tends to be more likely at higher levels. I don’t know that many people who have their own companies. But when you become a senior, well-known, tenured professor, you tend to establish more connections with the industry, and so you get more opportunities to work with proprietary data.

Luigi: I think your description is absolutely right. I find cronyism in everything. I think that here there is an efficiency reason why that is the case, in the sense that I need to, as a company say, trust who has access to my data, and so I tend to trust somebody I work with. So, there is an efficiency consideration.

However, I think the Sloan Foundation is undertaking a major project to try to equalize access to data to everybody, which I think is very important. Actually, the Sloan Foundation, some social scientists, and Facebook have agreed on a common platform to give access to data to everybody under certain conditions. I think that that’s the direction we should go.

Kate: In my own research, I study bankruptcy. A lot of the papers that I’m working on revolve around one dataset of court documents, which, you’re right, it’s publicly available. But the catch is that each page of court documents that you access costs 10 cents, and so, if you really wanted to pull the whole body of publicly available bankruptcy documents, that would cost you millions and millions of dollars.

There is a system, or a way to get around this, which is that you can write to every single judge in the country, begging for access for free to get those court documents, which is what I did. I physically mailed letters to 90 different judges. Eighty-nine of them granted me that access. Then I had to spend a few months scraping a bunch of data. At some point, I got in an argument with a couple of the courts and there was a threat that I had taken too many court documents. Someone called me and threatened to sue me for $750,000 when I was a PhD student. And —

Luigi: And you said, “You’re welcome, because I don’t have any wealth.”

Kate: Yeah. The ironic thing is that I would have immediately had to file for bankruptcy. They would have gotten nothing out of it, except I would’ve gotten the personal experience of bankruptcy, which is what I was studying using those court documents. So, maybe there would’ve been some learning experience, some education for me in the process. But, yeah, there’s such fierce competition over getting access to data in our field that those are the kinds of lengths that you need to go to, to be able to publish well.

Luigi: That’s very entrepreneurial on your part, and very sort of equal access. You didn’t have any particular favor by anybody. You followed the law, and you got this data, so nobody can withdraw the data from you at any point in time. This is the great thing about disclosure mandated by the government. They cannot subject your paper to any review, because you can write whatever you want, freedom of speech.

Kate: Yeah, it’s mine.

Luigi: So, you’re lucky that you’re not in that situation, but I think that it’s a problem when you are in that situation, because you are in a situation of power imbalance.

It just happens that most of the time, the people with power are men. The people that are working with them can be men or women, but, regardless, I think this creates a situation that can lead to abuses of power.

Kate: Yeah, so I know I’m reiterating what you said earlier, but I thought it was great that in your article you pointed out that this sort of relationship, one person having special access to data and another person working on that data, in a way that their career hinges on the success of the publication using that data, it creates a power imbalance between the two. I think in academia there’s a lot of different subtle ways in which there are power imbalances between senior and junior faculty. But, also, often between senior men and junior women.

I think it’s important to point out that we may think of power as your boss versus a subordinate. But in academia, there’s tons of different subtle ways in which there can be power imbalances. I think it’s important that we think very deeply, and very carefully about identifying those ways, and making sure that they’re not exploited.

Luigi: Yeah, you’re right. I remember many years ago that when I hired an administrative assistant who was completely not knowledgeable of the university environment, I realized how difficult it is to understand the power relation in academia, because when you go to a company, you have a title. You have a bigger office. You have a hierarchy that is very visible, and then you know how to relate to that hierarchy.

In academia, we are all on a first-name basis. The offices are more or less all the same. You don’t see this hierarchy, because in a sense as an assistant professor, you’re not assisting anybody. You’re just doing your work the same way I do, so there is not really a formal hierarchy in that sense. But I think that academic reputation and, of course, the power of tenure, the ability to judge, gives senior faculty a disproportionate amount of power, vis-à-vis the junior faculty.

I think this is normal. I’m not saying that this should be changed, but sometimes we need to think about how to minimize the potential damage that this power imbalance creates.

Kate: Yeah. I think academia is not the only area in which this is true, but I think the broader takeaway is that reputations and connections are particularly important for PhD students, who oftentimes don’t have any publication record when they’re up for getting a job. But I will say that one component of the tenure package or the tenure review process is getting letters from other people in the field, in which they’re vouching for you, and they’re making statements about your contribution to the field.

That’s another serious place where there can be a huge power imbalance. Most tenured faculty in finance are men, so if you’re a female PhD student, you rely entirely on what’s often an all-male committee. In my case, everyone on my dissertation committee was a male, in which case you really need to have those people pushing for your reputation.

Luigi: No doubt that reputation is very important in academia, but two warnings. First, a good advisor can probably get you an interview with a good university, but cannot get you hired at a good university. At the end of the day, your paper and your presentation are what make a difference. No matter if you have even the most important academics and Nobel Prize winners that pushed for you, if you don’t have the quality, you don’t get hired.

Two, you’re right that there is this difference between business and academia, but precisely the fact we ask for external reviews makes, to some extent, the power of senior faculty a little bit less important, because you rely on external review. But it makes the power of reputation very important. It’s true that in academia reputation is a major issue, and there were a number of emails that Geert Bekaert sent that were disparaging.

Kate: Yeah, so now that we’re on the topic of hiring, or speaking more directly about the case, in your article that you wrote, what was your prescription for how we can change hiring practices?

Luigi: Full disclosure, they’re not my prescription. I was mentioning two ideas that I thought were interesting. One comes from a colleague at a different university, at Northwestern, Paola Sapienza. She has this idea that when you hire, especially senior faculty, from a different university, you require that senior faculty to sign a statement that he behaved according to the ethics code of the place where he was working before.

Why this is so important is because it’s all too common in academia that if you are accused of sexual harassment, you end up having an internal investigation. Then, if you’re found guilty, you are asked to leave the university with a nondisclosure agreement, so that there’s no scandal, and you move on. That resembles to me a lot like what the Catholic Church used to do with pedophile priests, sort of move them around, but not fix the problem. And —

Kate: Yikes —

Luigi: You don’t think that’s the case?

Kate: No, I’m just cringing because it’s always an unpleasant topic.

Luigi: Yeah, it is an unpleasant topic, but the reason why I make this comparison is, because everybody cringes about what the Catholic Church has done. We should cringe about what universities do. I realized that when we hire staffers, we ask for their criminal record and stuff like that. When we hire faculty, we don’t. That’s pretty crazy, especially because a staffer, you can fire him or her any time of the day. Tenured faculty, it takes a long time to fire him or her. So, I think that we need to introduce some form of screening.

Of course, it’s very difficult to ask for opinions, and there is this nondisclosure agreement, et cetera. So, I think Paola’s idea was clever, because it was putting all the burden on the person. Of course, the person can lie, but then that’s cause for termination as soon as you find out, and so that makes the position much weaker.

Kate: Right, but if there’s nondisclosure agreements, wouldn’t nobody ever find out? You’re technically not allowed to find out.

Luigi: I’m not an expert here, but I think that if there is a case, you can start digging in the past. Then this may be found out. I’m not saying that the solution is perfect. If you have a better one, I’m all ears. But I think that something needs to be done to minimize this risk of moving around, because, let’s be fair, the problem is generally concentrated in a few people who are repeat offenders.

I’m sure you heard the famous case of the faculty, the astrophysicist at Berkeley who was a genius astrophysicist, but he had harassed women for 20 years. There is another case of a political science professor at Harvard that just retired in a hurry, because finally women came out. There are dozens of them over decades that felt harassed by him. So, I think that it’s pretty bad, because a few men ruin the reputation for everybody. I think one way to reduce this problem is to try to filter out for those few.

Kate: When I first read your article, I was a little bit off put by the suggestion. I think that that was because I had discussed this case before with other former PhD students, with other junior faculty members. The way that the case was presented to me had always been, this is a woman from Columbia who didn’t get tenure. She was suing Columbia because she was angry about not getting tenure, on these trumped up sexual-harassment charges.

It wasn’t until after I started reading about the case for this episode that I really realized that that wasn’t at all what was going on. I was annoyed by your suggestion that, “Oh, we should institute this system that relies on formal complaints,” when I didn’t realize that there had been a formal complaint that had been filed by her. So, it’s appalling to me that the facts were so distorted by most people in our profession, in a way that’s just so clearly biased against her.

I am embarrassed that the presumption is that it’s always the woman’s fault for filing any sort of accusation, and that she’s a troublemaker for doing so. I just believed it. I didn’t even bother to look up the facts of the case. And, B, that she had filed these formal complaints. That’s something that’s really difficult to do. It’s something that I certainly would be really scared of doing if I were ever in her position.

She should’ve been elevated and recognized for taking the right steps throughout the process, throughout the harrowing process that she was going through. Yet, rather than being celebrated for doing the right thing and trying to follow the institution’s rules, she was just rejected by the system.

Luigi: Yeah. To be fair, she testified at trial saying that she thinks she doesn’t deserve tenure at Columbia, so I don’t think this was a way to get tenure the legal way, through a process. I think this was her complaint about the way she was treated. I think that that’s the way we should analyze it. Also, to be fair vis-à-vis the colleagues, I think the vast majority of colleagues supported Enrichetta. In fact, they wrote a letter to the dean, I think, that was suggesting a potential solution for this case. This is the stuff I refer to in my article.

They say, “Look, we understand this power imbalance. In order to mitigate it, it must be that whenever there is an intellectual dispute about an article, about a paper you’re writing, about the research project, between a senior faculty and a junior faculty, the intellectual property right, the right to continue the paper should belong to the junior faculty.” Of course, a lot of people say the reaction to this is that senior faculty will stop writing with junior faculty. I don’t think that’s the case, but as every rule has some costs, the question is whether the benefits outweigh the cost. As a junior faculty, what is your view on this?

Kate: It’s kind of like people saying, “Oh, because of the Me Too movement, women are never going to get hired. Men are going to be too afraid to work with them.” I think it’s an unoriginal and distracting argument that has no merit. I don’t even think it’s worth talking about, to be honest.

Luigi: I think that there will be papers not being written. But people are ignoring the other side of the picture, that a lot of smart junior faculty don’t want to work with senior faculty, because they are afraid of being taken advantage of. I think that if we’re thinking about what we’ll gain and what we’re losing, I think that we’re gaining so many more people willing to work with senior faculty. We’re going to get a little bit less senior faculty wanting to work with junior faculty. But probably the ones that shouldn’t be working with them to begin with. So, I think in the overall scheme of things, it is a good rule and should be implemented.

Kate: I definitely agree with the points that you made in your article. I think that they were valid points that should be taken seriously and should be implemented. But there’s also a part of me that gets a little frustrated when the bigger picture isn’t addressed. I mean, there has been this culture of women and women’s research not being respected and elevated the same way that men’s research is. I think that is the deeper point that I would like to see addressed and discussed.

I pulled up a few quotes from my favorite website, “Econ Job Market Rumors,” which is the place to go if you’re trying to figure out what schools are hiring whom. But it’s also a place to go if you’re an angry “incel” who wants to rage about how much he hates women. I think I searched for women and math, and I’d like to just read a couple of things that came up.

“There are no impressive women in my cohort. Several of the men are the smartest I’ve ever met. This pattern is broadly true across all years.” Another person writes about a few different big companies— Uber, Google, Facebook, etc.—“Why are all the great companies still started by only men? Because there is no BS tolerable at the startup phase. Sorry, women, you are done here.” Another person wrote, “Men are empirically better at linear, analytical, scientifically driven thinking. Although some women can achieve competency, there will never, ever, ever be as many female math geniuses, ever.”

This is just the type of language that I think is totally regular. It’s so normalized, that it’s appropriate for men to say this to women’s faces when they’re PhD students. I experienced that sort of treatment.

Luigi: Really? People told you to your face that you cannot do math?

Kate: Yeah. I mean, I’m sorry to toot my own horn, but I was asked to take a special math class, just to prove my abilities when I was a grad student, when I was, I think, a third year or a second year. This was a stochastic calculus class that I took at Courant, which is NYU’s math department. It was amongst other grad students, and I did the best in the class. I was the number one performer. I don’t know why the other guys in my cohort weren’t also instructed to take that class, but that’s an aside.

This type of math is what’s useful in options pricing, but I wasn’t interested in options pricing research. I kind of knew from the very beginning that I wasn’t interested in it, so I never really applied those skills. Very quickly I pivoted back to working with data. Despite this, a fellow student of mine came up to my desk and said, “Come on, Kate, be honest. You know you’re working with data because you can’t do math.” It’s like, “How much more does one need to prove?”

It’s not about ability, it’s about preferences. People do the sort of research that they do because they’re interested in it. One should never be made to feel bad about that, particularly not bad because of the fact that you’re a woman. Anyway, I think that I’m getting sort of emotional as I talk about it, but it also feels good to get stuff like that off my chest. I mean, it’s not something I feel like I talk about every day. I’d like to know other people’s experiences, too. I’d also like to be able to create a forum where people can get stuff off their chests, anyone who has experienced sexual harassment. But not just that, anyone who has been made to feel like a second-class citizen in their own profession. Or, if anyone has good solutions for what we can do about this to change our culture. I want to hear about all of that.

Luigi: So, if you want to share your experience, or give us some proposals, go to our Facebook page, Capitalisn’t Podcast.