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The story of how economic reasoning came to dominate Washington between the 1960s and 1980s--and why it continues to constrain progressive ambitions today For decades, Democratic politicians have frustrated progressives by tinkering around the margins of policy while shying away from truly ambitious change. What happened to bold political vision on the left, and what shrunk The story of how economic reasoning came to dominate Washington between the 1960s and 1980s--and why it continues to constrain progressive ambitions today For decades, Democratic politicians have frustrated progressives by tinkering around the margins of policy while shying away from truly ambitious change. What happened to bold political vision on the left, and what shrunk the very horizons of possibility? In Thinking like an Economist, Elizabeth Popp Berman tells the story of how a distinctive way of thinking--an "economic style of reasoning"--became dominant in Washington between the 1960s and the 1980s and how it continues to dramatically narrow debates over public policy today. Introduced by liberal technocrats who hoped to improve government, this way of thinking was grounded in economics but also transformed law and policy. At its core was an economic understanding of efficiency, and its advocates often found themselves allied with Republicans and in conflict with liberal Democrats who argued for rights, equality, and limits on corporate power. By the Carter administration, economic reasoning had spread throughout government policy and laws affecting poverty, healthcare, antitrust, transportation, and the environment. Fearing waste and overspending, liberals reined in their ambitions for decades to come, even as Reagan and his Republican successors argued for economic efficiency only when it helped their own goals. A compelling account that illuminates what brought American politics to its current state, Thinking like an Economist also offers critical lessons for the future. With the political left resurgent today, Democrats seem poised to break with the past--but doing so will require abandoning the shibboleth of economic efficiency and successfully advocating new ways of thinking about policy.


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The story of how economic reasoning came to dominate Washington between the 1960s and 1980s--and why it continues to constrain progressive ambitions today For decades, Democratic politicians have frustrated progressives by tinkering around the margins of policy while shying away from truly ambitious change. What happened to bold political vision on the left, and what shrunk The story of how economic reasoning came to dominate Washington between the 1960s and 1980s--and why it continues to constrain progressive ambitions today For decades, Democratic politicians have frustrated progressives by tinkering around the margins of policy while shying away from truly ambitious change. What happened to bold political vision on the left, and what shrunk the very horizons of possibility? In Thinking like an Economist, Elizabeth Popp Berman tells the story of how a distinctive way of thinking--an "economic style of reasoning"--became dominant in Washington between the 1960s and the 1980s and how it continues to dramatically narrow debates over public policy today. Introduced by liberal technocrats who hoped to improve government, this way of thinking was grounded in economics but also transformed law and policy. At its core was an economic understanding of efficiency, and its advocates often found themselves allied with Republicans and in conflict with liberal Democrats who argued for rights, equality, and limits on corporate power. By the Carter administration, economic reasoning had spread throughout government policy and laws affecting poverty, healthcare, antitrust, transportation, and the environment. Fearing waste and overspending, liberals reined in their ambitions for decades to come, even as Reagan and his Republican successors argued for economic efficiency only when it helped their own goals. A compelling account that illuminates what brought American politics to its current state, Thinking like an Economist also offers critical lessons for the future. With the political left resurgent today, Democrats seem poised to break with the past--but doing so will require abandoning the shibboleth of economic efficiency and successfully advocating new ways of thinking about policy.

54 review for Thinking Like an Economist: How Efficiency Replaced Equality in U.S. Public Policy

  1. 5 out of 5

    David Childers

    A cliché reflecting the sometimes adversarial view by sociologists of economists and their outsized role in public debates is the lament that there is a Council of Economic Advisors but no Council of Sociological Advisors. This book is, in essence, an attempt to treat the question of why that is as not just rhetorical, with detailed historical study of how economics and economists began to take roles in an expanding variety of government agencies and legal processes in the US, and what kind of d A cliché reflecting the sometimes adversarial view by sociologists of economists and their outsized role in public debates is the lament that there is a Council of Economic Advisors but no Council of Sociological Advisors. This book is, in essence, an attempt to treat the question of why that is as not just rhetorical, with detailed historical study of how economics and economists began to take roles in an expanding variety of government agencies and legal processes in the US, and what kind of decisions and actions they took in those roles. Unlike most earlier discussion of the topic, which concentrates on macroeconomics and limits attention to publicly prominent figures and grand intellectual debates, the focus is particularly on microeconomics and its place in government agencies in administration of issues like social services, environmental and safety regulation, and antitrust. A rough summary of the narrative for government programs is that an economic style of policy analysis focused on quantitative evaluation of programs in terms of costs and benefits was developed at the Rand Corporation for military planning in the 1950s, spread to the Defense Department in the Kennedy administration, and to policy offices throughout the executive branch during the Johnson administration, from which over time, economic considerations and styles of reasoning began to set the terms of policy debates from the Nixon through Carter eras. In parallel, certain economic views on market regulation by economists studying Industrial Organization spread from academia to think tanks, parts of the antitrust executive establishment, to legal academia as "law and economics" and eventually brought the perspective of economists through courts and legislation into antitrust law. The role of Democrats and liberals, who applied economic reasoning in the service of goals of more effective and efficient government, in driving this process is heavily stressed, emphasizing a counterpoint to existing narratives which equate economics with a certain kind of market fundamentalism that was always a distinctively minority viewpoint in the profession and was mostly absent from the early stages of the processes that brought economics to be a major player inside government. Beyond the historical narrative, the book has an explicitly political argument, that the forms of reasoning brought by economists, emphasizing quantitative analysis and tradeoffs of cost and benefit, crowded out other forms of policy argument, especially those based on rights or values but also those based on kinds of costs and benefits not easily quantified, especially using the economic tools of the time, and so ended up constraining particularly policy makers on the left. Brought to contemporary debates, this at times in the book shades into treating economics as a synecdoche for the policy views of Clintonite center-left in the Democratic party and the constraints as acting specifically to exclude those further left. While this is substantially less inaccurate than earlier critiques which treated economics as a synecdoche for the Reagan and Thatcher right (surveys of US economists suggest that a very large majority are Democrats, and as Popp-Berman points out, the Reagan administration fired large numbers of economists and shrank their role in policy), this squashing down of the diverse views of the contemporary profession in the service of relitigating the 2016 Democratic primary is at best only partly served by the account of an earlier generation of Democratic economists. More interestingly, the discussion of the more general limits of the microeconomic style of policy analysis as carried out in practice in the domains studied here does raise important questions about the practical effects of such reasoning. While an early chapter does review several of the (not all mutually compatible) definitions of efficiency used in economics, in practice, many of the later discussions of arguments made by economists are less clear about which definition is being used, in part reflecting what to later economists would be considered muddled views by economists of the time on these issues[^1]. Further, neglect of measurement issues and political economy considerations may have lead to systematically biased assessment of costs and benefits. Most paradoxically, and new to me, the hostility to deontological reasoning and "rights" embedded into many economic assessments due to the inability to quantify values and make tradeoffs, may fail to account for the practical implementation of what counts as a "right" in the US legal system which creates a mechanism for parties to resolve disputes based on interpretation of rights. In practice, it is argued, economic arguments for accounting for tradeoffs may have been interpreted by courts as creating a right for certain costs to be accounted for, leading to conditional implementation of such considerations which may have substantially different effects than systematic disinterested implementation of such criteria. None of this is necessarily to say what the counterfactual where economists had not taken such a role in policymaking and implementation would have been. Perhaps, as the author intimates, it would have led to fewer barriers to policies advocated by the left on more universal grounds, such as universal healthcare or stricter environmental regulation based on ideas of universal rights to health or a view of pollution as a moral crime instead of merely a cost. I am a little more agnostic, as deontological arguments (among others made based on forms of reasoning less emphasized in economics) seem to span a fairly wide swathe of the political spectrum. But the call for humility regarding the practical consequences of applied consequentialism is well-taken. Regardless of one's views on the political implications, the practical history here provides a useful context for understanding what economists actually have done in government, which has previously been conspicuously absent from debates on its' role. [^1]: I will spare the technical critique of the literal incoherence of Kaldor-Hicks criterion or the widespread misapplication of quasilinearity assumptions, mostly to avoid hyperventilating, but suffice to say that writing criteria of this nature into law may be far from advisable even on purely economic grounds.

  2. 5 out of 5

    John Mihelic

    I like Elizabeth Popp Berman’s “Thinking Like an Economist.” It is a good book. I say that because her book made me change a structural paradigm I have in my head. Prior to reading this text, I had in my mind that everything went wrong when the business right took the Powell Memo, the libertarian right took Goldwaterism, and the religious right rose post Roe and it was all thrown into a mixer during the Reagan revolution. You can all sorts of well-being charts that dog-leg sometime between 1973 a I like Elizabeth Popp Berman’s “Thinking Like an Economist.” It is a good book. I say that because her book made me change a structural paradigm I have in my head. Prior to reading this text, I had in my mind that everything went wrong when the business right took the Powell Memo, the libertarian right took Goldwaterism, and the religious right rose post Roe and it was all thrown into a mixer during the Reagan revolution. You can all sorts of well-being charts that dog-leg sometime between 1973 and 1981 or so. Elizabeth Popp Berman’s introduces the idea that part of the change has to be seen as the takeover of economic reasoning of a cost-benefit or structuralist model into how policy was set over an idea of doing the right thing because they were the right thing based on “commitments to universality, rights, and equality” (99). Basically, it is the triumph of the consequentialists over the deontologists. She does note the basic issues where my priors lay, noting that there was a lot of political issues entangled in the rise of the right as you can’t separate the economic from the political (140). The thing that really makes the book stand out is her use of and grasp of history – and that she shows that the institutionalization of the economic shift to efficiency wasn’t just dominated by one party. Embracing this move was a bipartisan approach from Kennedy though Clinton and beyond. If there’s a weakness to the text it is that she drops most of the history after Reagan, but we live in the world of the shift she outlines so including the new Democrats in depth might be beating too much of a dead horse. The bipartisan embrace means that this move is also internalized to the point where you don’t have to make the argument for efficiency anymore, but instead if you desire broad based policy you have to argue from that point and anticipate these sorts of objections about how you are going to pay for that if you want to do something because it needs to be done. The present gets little notice but there is mention of the Neo-Brandeisians (though exemplars like Tim Wu and Lina Khan aren’t mentioned by name) and an acknowledgement that there is a whole realm of policy argument to the left of the economic efficiency argument and that there is a possibility, at least in antitrust, that there is more than a very narrow understanding of what consumer welfare means under the Sherman Act. Ultimately though, for me it circles back to the many-headed policy demon that was already in my priors. Instead of completely reframing the challenge, it is a drawing of a different sort of structural barrier to any real positive change for a broad base of people.

  3. 5 out of 5

    ALEKOS VENERIS

    One of the most interesting books that I have read recently. It explains how the 'economic style of thinking' institutionalized in the American policymaking. So many negatives recent facts are explained from this minor detail that ,in reality, is very important. The micro-economic thinking is like virus, that has conquered the liberals educated people. It does not allow them to think big. The conservatives don't have problem to abandon it when it does not serve their interests. On the contrary One of the most interesting books that I have read recently. It explains how the 'economic style of thinking' institutionalized in the American policymaking. So many negatives recent facts are explained from this minor detail that ,in reality, is very important. The micro-economic thinking is like virus, that has conquered the liberals educated people. It does not allow them to think big. The conservatives don't have problem to abandon it when it does not serve their interests. On the contrary the liberal are limited by this. I think ,in their effort , to show that are smarter and better than the 'fanatics' conservatives, are trapped. Who is the smarter ,I don't know. However, recently liberals are cynical like conservatives. The 'economic style of thinking' has become a way to find a job when at the same time they exhibit their virtue. Because of this , I think that this mindset will continue to be dominant. Meaning more inequality, more regulatory capture...But without tracking the problem, there would be no hope to abandon it. Congratulations to the writer for her contribution!

  4. 5 out of 5

    Raymundo

    Es un libro interesante que se enfoca en por qué hay un excesivo enfoque sobre eficiencia en Estados Unidos. El primer capítulo es muy bueno, y es el resumen del libro. Creo que el libro es solo para especialistas, ya que cuenta cada detalle, cada oficina y cada persona involucrada en los debates de política pública en EUA desde 1950 hasta la actualidad. También no es claro que en ciertas políticas la alternativa sea mejor. Primer capítulo excelente, todo lo demás demasiados detalles.

  5. 4 out of 5

    Jonathan Hawkins-Pierot

    Hopefully the inexplicable addition of a slash "I/O" to abbreviate industrial organization is due to an overzealous copy editor (analogous to the dreaded "maximum likelihood estimator" to "most likely estimator" correction, or changing "if and only if" to "if") and will be corrected in the paperback edition. They could have checked literally any department website! Hopefully the inexplicable addition of a slash "I/O" to abbreviate industrial organization is due to an overzealous copy editor (analogous to the dreaded "maximum likelihood estimator" to "most likely estimator" correction, or changing "if and only if" to "if") and will be corrected in the paperback edition. They could have checked literally any department website!

  6. 4 out of 5

    Karlo

  7. 5 out of 5

    Justin

  8. 5 out of 5

    Erik

  9. 4 out of 5

    Xavier Bonilla

  10. 4 out of 5

    Sandeep

  11. 5 out of 5

    Jeff

  12. 4 out of 5

    danah

  13. 4 out of 5

    Joseph

  14. 5 out of 5

    KT

  15. 5 out of 5

    Brian Eshleman

  16. 4 out of 5

    Mark Macalma

  17. 5 out of 5

    Lawrence

  18. 5 out of 5

    Veronica J

  19. 4 out of 5

    Chris

  20. 5 out of 5

    Lynda

  21. 5 out of 5

    Eric Bottorff

  22. 5 out of 5

    Miloš Младеновић

  23. 5 out of 5

    Alex

  24. 4 out of 5

    Jpiccs

  25. 4 out of 5

    Wyatt

  26. 5 out of 5

    Sergei Wallace

  27. 4 out of 5

    Caleb

  28. 4 out of 5

    Ben

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    Samuel

  30. 5 out of 5

    Carrie Fischer

  31. 4 out of 5

    Aprovertte

  32. 4 out of 5

    Felipe

  33. 4 out of 5

    Filip Lubinski

  34. 4 out of 5

    Human

  35. 4 out of 5

    EGRG

  36. 5 out of 5

    Eva Forslund

  37. 5 out of 5

    someone

  38. 4 out of 5

    Byron

  39. 4 out of 5

    David Rodriguez

  40. 5 out of 5

    Aleksander

  41. 4 out of 5

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  42. 5 out of 5

    Sebastian Gomez

  43. 5 out of 5

    Lara Kalaidjian

  44. 5 out of 5

    Nikhita

  45. 4 out of 5

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  46. 4 out of 5

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  47. 5 out of 5

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  48. 4 out of 5

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  49. 4 out of 5

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  50. 4 out of 5

    Nick Mirin

  51. 4 out of 5

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  52. 4 out of 5

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  53. 4 out of 5

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  54. 4 out of 5

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