Book dives into how we may value efficiency over fairness
Sometimes I think as a society, we’ve been trained to look at our collective problems through a pinholesized aperture.
I look at the cost of health care, relative to our poor outcomes — among 11 high-income countries, the U.S. health care system ranks last in terms of performance, even though we spend the most — and know that there must be a better way to keep our country healthy.
I look at the $1.7 trillion in student loan debt and believe there must be a way to return to the status quo of my time in college, when four years of tuition at the University of Illinois cost less than $10,000.
I look at the fact that the Child Tax Credit, which was enacted during the worst of the COVID-19 pandemic and lifted millions of children out of poverty, has now been scuttled because of debates about efficiency and who “deserves” the help, and wonder why it’s so hard to do the right thing for people who need a leg up.
Thanks to Elizabeth Popp Berman, a professor of organizational studies at the University of Michigan, and author of the new book, “Thinking like an Economist: How Efficiency Replaced Equality in U.S. Public Policy,” I better understand why these things are so difficult. Berman argues that our most powerful institutions have been steeped in what she calls the “economic style of reasoning,” and this lens has closed off a broader discussion of how to think about these societal challenges.
The “economic style of reasoning” is not just utilizing the tools of a particular discipline to examine a problem, but is instead an entire worldview that is fundamentally rooted in valuing “efficiency” above all. Those who embrace the economic style believe that efficiency is a neutral trait, a measuring stick no different from a ruler, but Berman argues that efficiency is itself a value, and often a value that is at odds with the actual wishes of the citizenry.
For example, many believe everyone has a fundamental right to health care, a moral claim that does not invoke “efficiency.” However, when the economic style is applied to managing a system of health care, the moral claim is shunted aside in favor of competition and markets. Those who embrace the economic style have an unshakable faith that these mechanisms create the best outcomes for the most people.
But this is obviously not true. As the economic style grew in influence from the 1960s, perhaps peaking in the 1990s and remaining dominant today, we have seen ever-increasing inequality in the United States.
The economic style is bipartisan in the sense that both Republicans and centrist Democrats embrace it wholeheartedly, though we also see it often abandoned by Republicans (and some Democrats) when it comes to things like defense spending, where markets and efficiency don’t seem to come into play.
Or tax cuts for the wealthy, which will forever be in the Republican playbook.
Some voices that would like to consider issues of equity and morality as we examine policy around things like inequality, antitrust issues, and the environment, are starting to make some noise, but the economic style still dominates. West Virginia’s Joe Manchin, a centrist Democrat just flushed the last chance for legislation that would retain some kind of child tax credit over concerns about “cost.” Classic economic-style thinking.
Berman makes no specific policy recommendations, but the import of her book is clear to me.
It’s OK to believe there’s value beyond markets and competition, and while efficiency can be a useful goal in many cases, sometimes we should embrace deeper values around fairness, and dare I say it, right and wrong.