Fellow Economists: Let’s Be Citizens Again

Balance and equilibrium are not just core principles of American constitutionalism — They are the bedrock of civic friendship.

Patricians versus Plebes. Rentiers versus Yeomen. Gown versus Town. It’s a tale as old as politics itself. Today the conflict is between Experts and The People. The former is a credentialed class of strivers that mostly works with symbols and abstractions. The latter is an eclectic group whose livelihood depends on delivering practical results, with little time for palace intrigue. Donald Trump, returning to the White House atop a populist wave, has redrawn the battle lines. The self-proclaimed smart set is in retreat — for now.

The managerial class stands indicted. From the global financial crisis to the coronavirus pandemic, a decade-and-a-half of misguided policy further empowered those already with power and stripped those with little power of what they had.

But populist excesses can be just as dangerous as aristocratic abuses. Outbursts of popular passion are almost always destructive. Balance and equilibrium are not just core principles of American constitutionalism. They are also the bedrock of civic friendship. Social flourishing requires concord, or at least peace, among the few and the many.

As an economist, I feel this tension acutely. Economics straddles the divide more than any other social science. On the one hand, we are hard-nosed evaluators of tradeoffs, using our specialized toolkit to uncover the hidden logic of the social world, which often shows “folk wisdom” about markets and governments to be totally wrong. On the other hand, we strive for citizenship, offering our policy recommendations in the realm of values, where our conjectures and paradigms have no special privilege.

That’s the theory. In practice we economists have spent the better part of the postwar era squarely in the expert’s seat. We tell ourselves we’re simply helping the public get what it wants. But we’ve been known to put our thumbs on the scale: There is an inherent advantage to experts specifying the tradeoffs and prescribing how best to navigate them because generalists lack specialized knowledge. It’s no surprise that economists have enjoyed such success, not just in staffing the federal bureaucracy at the highest levels, but in defining the range of acceptable public debate. We’ve convinced the public that informed citizens let the economists take care of governing.

Procedural reforms to improve government frequently fall prey to this power asymmetry. In 1981 President Reagan signed an executive order requiring all federal agencies to conduct cost-benefit analyses on regulations that had an economic impact of $100 million or more. No more would entrenched bureaucrats write self-favoring rules that created massive costs for those outside the Beltway. However, as the decades passed, it became clear this was no panacea. Cost-benefit analyses are notoriously sensitive to initial assumptions about what we count as costs and benefits. It’s very easy to start with the result you want and work backward to “prove” you should do exactly what you wanted to do in the first place. And who is best positioned to do this? The economists. We’re not simply helping markets work better. We’re deciding what “better” means.

So economists are aristocrats after all. That doesn’t mean we should switch sides and join the mob. The golden mean is much harder but more fruitful. Economists must embrace citizenship again by properly situating their (valid) expertise within (equally valid) public deliberations about the values that govern our communities.

We need to change how we talk to the public about cost-benefit analysis, as well as economic efficiency more generally. We’ve inadvertently elided the moral judgment that all acts of government presume. The distribution of costs and benefits among the public matters. Some things economists treat as benefits might not be ethically desirable, while some things economists treat as costs may still be worthy. Most importantly, evaluating tradeoffs this way all but guarantees the only stakeholders with a seat at the table will be graduate-degree-holding members of the laptop class, forestalling genuine democratic deliberation.

As usual, Milton Friedman put it best: "Any system that gives so much power and so much discretion to a few men that mistakes […] are capable of causing such far-reaching harm is a bad system." That applies to all would-be economic experts, including Friedman himself: left or right, Keynesian or monetarist, Democrat or Republican. Economists do have something unique to contribute to public discourse. But that doesn’t mean we automatically deserve to be heard. Let’s be something far more radical than policy wonks or endowed chairholders. Let’s be citizens.

Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business at Texas Tech University and a researcher with TTU’s Free Market Institute. He also holds fellowships with the Independent Institute in Oakland, Calif., and the American Institute for Economic Research in Great Barrington, Mass.