Elizabeth Popp Berman, "Thinking like an Economist: How Efficiency Replaced Equality in U.S. Public Policy" (Princeton UP, 2022)

Jul 14, 2025

Elizabeth Popp Berman, Director at the University of Michigan and author of "Thinking like an Economist," discusses how the dominance of efficiency over equality has shaped U.S. public policy. She explores the historical shift from progressive economic values to an efficiency-driven approach that began in the 1960s, influenced by military and technocratic reasoning. Berman also critiques the paradox of corporations promoting environmental initiatives while contributing to pollution, and she reflects on the impact of this economic thinking under the Biden administration.

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INSIGHT

Rise of Economic Reasoning Style

Economic reasoning style, centering on efficiency, became dominant in US policy from the 1960s to 1980s.
Ideas like taxing pollution as an externality, now seen as natural, were once foreign concepts to policymakers.

ANECDOTE

RAND Corporation’s Origins

The RAND Corporation, funded by the Air Force post-WWII, applied economists to optimize defense decisions.
Techniques solving military problems later spread to broader government policy contexts.

INSIGHT

Economic Techniques Institutionalized

The use of scientific, economical decision-making techniques spread from the Department of Defense to all executive agencies by Lyndon Johnson's executive order.
This institutionalized cost-effectiveness analysis in government despite some technical limitations.

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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.

Elizabeth Popp Berman is Director and Richard H. Price Professor of Organizational Studies at the University of Michigan and the author of Creating the Market University: How Academic Science Became an Economic Engine (Princeton).

Morteza Hajizadeh is a Ph.D. graduate in English from the University of Auckland in New Zealand. His research interests are Cultural Studies; Critical Theory; Environmental History; Medieval (Intellectual) History; Gothic Studies; 18th and 19th Century British Literature. YouTube channel. Twitter.

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