Thinking like an Economist: How Efficiency Replaced Equality in U.S. Public Policy

Between the 1960s and the 1980s, an economic style of reasoning—one focused on efficiency, incentives, choice, and competition—became prominent within U.S. public policy, including in domains that were once not seen as particularly “economic”. Drawing on historical research on policy domains ranging from environmental to welfare to antitrust policy, I show how particular intellectual communities introduced and disseminated this style of reasoning, and examine its lasting political effects. As the values of economics—especially various forms of efficiency—became institutionalized through law, regulation and organizational change, it became harder for competing claims about rights, universalism, equality, and power to gain purchase. While economic reasoning had the potential to conflict with conservative as well as liberal values, in practice it was particularly constraining for the Democratic left—the implications of which continue to be felt. The talk will illustrate this argument through the story of environmental policy, in which laws written explicitly to set standards without consideration of costs were challenged by an unlikely alliance of liberal economists and regulated industries—shifting the very grounds on which clean air and water could be defended.