This piece first appeared in the Washington Post.
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 aren’t many to talk to. 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.