Harvard Educational Review
  1. Thinking Like an Economist

    How Efficiency Replaced Equality in U.S. Public Policy

    Elizabeth Popp Berman

    Princeton: Princeton University Press, 2022. 344 pp. $35 (cloth).

    “The institution is run by an administration that prefers tranquility to equality, resisting the transformative changes necessary to address these critical issues” (Beyene et al., 2019). Three Master of Public Policy students at the Harvard Kennedy School made this bold declaration in the fall of 2019. Dismayed by a dearth of curricular focus on systemic racism and a lack of faculty and administrative commitment to “racial literacy,” they called for the school to “require a course on the history of racialized policy” in order “to prepare graduates for leadership in a 21st century democracy” (Beyene et al., 2019). A year later and halfway across the country, critics spoke against the approach of the UChicago Urban Labs, arguing that the prominent policy think tank’s approach to program development and evaluation creates a “neglect of structural analysis [that] contributes to problems it purports to solve” (Vargas, 2020). And at the University of Michigan’s Ford School of Public Policy, students have been organizing to require a course on the history of policy since the early 2010s. 

    Each of these cases questions the dominant “economic style of reasoning,” or what Elizabeth Popp Berman defines in Thinking Like an Economist as an approach to policy making that uses economic models to simplify, weigh costs and benefits, and generate causal relationships in pursuit of developing the most cost-effective and efficient policy solutions” (5). In this ambitious text, at once a work of history and sociology, Berman recounts in impressive detail how this economic style advanced from universities, to policy think tanks, and throughout Washington DC, subtlety shifting both Democrats’ and Republicans’ thinking toward adopting neoliberal perspectives on an array of social policy agendas. 

    The story begins in the 1960s, when academic economists and the RAND Corporation (established in 1948 to conduct analysis for defense initiatives) began to work closely with the federal government to develop and apply more scientific, neutral, and efficient approaches to policy making. As Department of Defense spending grew during the Cold War era, the field of economics’ focus on costs, benefits, and resources seemed like a natural solution. Soon, RAND systems analysts arrived in Washington, DC, to develop the Planning, Programming, and Budgeting System (PPBS), rooted in microeconomics, for identifying the most cost-effective defense goals. By the late 1960s, thousands of government employees had undergone training in systems and cost-benefit analyses, and PPBS expanded throughout departments as a path forward in the face of increasing Cold War spending. In response, government offices hired new economics PhDs who were ready to lend their training to this analytic approach; economic think tanks sprung up to offer policy research to the government; universities created the first public policy degrees to train future bureaucrats; and Congress established the Congressional Budget Office. Ultimately, implementation of PPBS varied, but the economic mindset persisted, supported by this range of new institutions. 

    Throughout Thinking Like an Economist, Berman explores how politicians, researchers, and practitioners across political lines “allowed the economic style to define the boundaries of legitimate policy debate,” to dictate what they considered worthy and efficient goals and expenditures (217). She takes a critical yet judicious stance; her argument is neither a partisan critique nor a complete dismissal of economics as a useful tool. In fact, she often gives credit to economists, noting, for example, institutional economists’ tendencies toward progressive social reforms (27) and empathetically outlining the motivations of those who sought data as a proof point to expand welfare reforms (111). However, she is also careful to advise that considering various values “in the language of economics often comes at the cost of some violence to the originals” (10). In other words, what we gain from assessing occurrences like environmental pollution or school closings in terms of their costs and benefits can obscure arguments that rest on more abstract values of universalism and equality.

    Thinking Like an Economist will be at home on the bookshelves of social scientists from a range of disciplines, with examples ranging from health care (119) to transportation markets (141). However, of most interest to readers of HER will be the dual stories of the relationship between education and the economic style of reasoning. Most practitioners and scholars of education are likely familiar with policy approaches and debates that center on the efficacy or missteps of market-based and accountability reforms, such as high-stakes testing, grant programs like Race to the Top, and the rise of charter schools. What they might gain from Thinking Like an Economist is a deep understanding of the mindsets, values, and organizations that laid the foundation for these reforms.

    The first and most apparent of these stories is told in chapter 5, where Berman details how an economic style of reasoning arrived in social policy circles in the 1960s. She begins with the expansion of government through President Johnson’s Great Society programs, a time when government agencies—including the Department of Health, Education, and Welfare—were required to implement PPBS to determine the most cost-effective social policy goals. Simultaneously, the government allocated greater resources to research and evaluation to measure funding for initiatives like Title I schools. The combination of these two developments not only created a landscape in which “commitments to universality, rights, and equality [were] sidelined by an emphasis on efficiency, incentives, and choice” (99), but also funded numerous roles for academic economists in these agencies and think tanks. These scholars saw education not necessarily as an inherent good or a requisite for democratic participation but as an individual, human investment where the money spent educating an individual would show its worth later through their economic productivity in the workforce (107). Berman articulates how this manifested in student loan policy and the shift from institutional to individual aid: from a particular economic perspective, students should bear the cost of education as an investment in their own human capital and economic productivity, and individual aid would spur schools to compete for attendees (107–108). 

    The more nuanced second story, woven into each page of the book, explains how scholars and their academic institutions generated, cultivated, and ultimately disseminated the economic style of reasoning throughout the policy world. Berman looks at the creation and growth of the public policy discipline throughout the latter half of the twentieth century, allowing us to see the origins of a field in which students are now objecting to a curriculum grounded in the economic style of reasoning. We learn how academic economists created organizations like the National Bureau of Economic Research and the Brookings Institution, which would go on to play an outsized role in policy making (29). With the rollout of the PPBS, seven universities created the first graduate programs to train government employees in the economic techniques and rationales of the system. These programs grew in number and soon solidified as a new discipline—public policy—to “produc[e] a new breed of analyst . . . comfortable with an economic style of reasoning; focused on choice among alternatives, cost effectiveness, and quantitative analysis (62–63). When covering the role of academic institutions, Berman’s scope is comprehensive, touching on law school faculty (83), the competing positions of various institutions (93), and a need to build “organizational homes for different perspectives” (227). She also shows how these institutions evolved to primarily train students in economic cost-benefit analyses, often forsaking the aforementioned racial literacy, structural analysis of inequality, and policy history. 

    In her writing, Berman achieves both depth and breadth. If I could ask for any addition to the book, though, it would be greater exploration of the role philanthropic foundations have played in the proliferation of the economic mindset. The intersections of philanthropy, economic reasoning, evaluation, and federal policy are far-reaching, particularly within the realms of education and social policy. As one example, the Ford Foundation’s Gray Areas program in the 1960s sought to reform welfare service delivery in urban areas through a range of experimental economic development and evaluation programs like youth employment, preschool education, and community recreation (O’Connor, 1996). Despite limited success, this model was incorporated into the Economic Opportunity Act of 1964 (Tompkins-Stange, 2016). Including more discussion of these kinds of programs might have allowed the book to explore questions about the role of private wealth and power in advancing economic reasoning in public sectors. Still, Thinking Like and Economist stands as a powerful text for understanding the historical dynamics of policy making and will empower researchers and scholars of education to pinpoint the causes and effects that have lead us to a world of policy making in which the cost-benefit analysis reigns supreme. 

    A seemingly innocuous line has stayed with me long after reading the book. In chapter 3’s discussion of how, in 1968, one thousand government employees from a wide range of agencies enrolled in a three-week course on PPBS and quantitative economic decision-making, Berman notes that a majority of these trainees reported that learning economic concepts had been the “greatest professional benefit of the course” (63). Berman uses this example to demonstrate the early proliferation of economic concepts across government departments and in the professionalization of public policy. But it also prompts the question, Just what immediately drew this deep admiration from individuals? 

    While Thinking Like an Economist does not provide any simple answer, I wonder whether the appeal stems from the ability of economic analysis to reduce decisions to a straightforward calculation rather than to embrace their complex and uncertain reality. The extent of educational inequality or the consequences of climate change will never be neatly definable or calculable, but it may be that a very human fear of the unknown has led us to govern our world by these delineations, blocking our ability to envision other paths forward. The subtle power of Thinking Like an Economist might be its prompt for us to try. 

    abigail orrick

    Beyene, Y., Kumodzi, K., & Simms, D. (2019, November 29). Institutional racism lives at HKS, compromising its effectiveness as a public service institution. The Citizen. https://citizen.hkspublications.org/2019/11/29/institutional-racism-lives-at-hks-compromising-its-effectiveness-as-a-public-service-institution/
    O’Connor, A. (1996). Community action, urban reform, and the fight against poverty: The Ford Foundation’s Gray Areas program. Journal of Urban History, 22(5), 586–625. https://doi.org/10.1177/009614429602200503
    Tompkins-Stange, M. E. (2016). Policy patrons: Philanthropy, education, and the politics of influence.Harvard Education Press. 
    Vargas, R. (2020, June 11). It’s time to think critically about the UChicago Crime Lab. The Chicago Maroon. https://chicagomaroon.com/36836/viewpoints/column/our-history/


White Ignorance in Global Education
Francine Menashy and Zeena Zakharia

Book Notes

Thinking Like an Economist
Elizabeth Popp Berman

Race at the Top
Natasha Warikoo

You Are Your Best Thing
Edited by Tarana Burke and Brené Brown

Challenges to Academic Freedom
Edited by Joseph C. Hermanowicz