You have a choice to make, and your choices are infinite. Does this inspire or terrify you? The desirability of having greater choice is hard to argue with. If you get to choose whom to marry, instead of being promised to a husband when you’re barely of age, you get to utilize the full range of your human capacities for love and empathy. Even more quotidian decisions, like choosing among Baskin-Robbins’ 31 flavors, are improved with greater choice. If you innately love rocky road more than any other ice-cream flavor, a rocky road scoop will give you more utility than a simplified decision between chocolate and vanilla ever could. Here, the positive returns to more choice seem obvious.
More utility is better, declaims traditional economics. If “utility” is social science’s fancy word for happiness, then you might have to be insane to want fewer choices, less utility, and depressed happiness. So economists assume every homo sapien is also a homo economicus, a rational decision maker whose only end is maximizing her utility. Utility and the rationality of actors are so foundational to modern economics, that any economist questioning their legitimacy is automatically considered a pariah.
Orthodox economists have within their treatises constructed armies of these rational decision makers who, in my imagining, march lockstep down the aisles of your local Walmart, mechanically exchanging a swipe of their credit card for merchandise whenever price is lower than their would-be utility. I do not begrudge economists their simplifying assumptions. The world is a big, messy place, and it is not for economists to capture all the nuance. For that, man had to invent poetry and, later, the novel. And if our world were ruled by an equal number of economists and poets, then the magic through which economists distill billions of humans’ desires and intents into indifference curves and utility-possibility frontiers would be no problem.
If our policymakers could cite Homer and Austen as easily as they do Milton Friedman, no one would need worry about the dehumanizing effects of collapsing the machinery of human desires into several equations. In such a world, every cost-benefit analysis of a new regulation would come with a literature review section that cites Tolstoy, Shakespeare, and Shelley. If we were allowed to consult experts on the human condition, when making policy decisions affecting the world in which humans live, we wouldn’t have to fret so much about the danger of treating America’s 350 million individuals as if they all ran on the same decision-making, utility-maximizing software. And so the metrics by which we judge public policy come to be about totalling up utility, about costs in dollars and benefits as they accrue to GDP.
Economists have sold us on their vision of a world where many choices exist, and the role of public policy is to solve for the choice that keeps inflation in check or grows GDP or insert the favorable performance of your favorite economic indicator here. Cass Sunstein, until this past August head of the White House agency most responsible for judging regulations, wrote that “in an executive order issued in January 2011, the administration doubled down on cost-benefit analysis…. Obama made an unprecedented commitment to quantification of both costs and benefits.” Where Mr. Sunstein’s congratulatory Bloomberg editorial was titled “The Stunning Triumph of Cost-Benefit Analysis,” I think the rest of us should be a little skeptical.
Allowing public policy to be exclusively the domain of economists is dangerous. In assuming that choice is good, more choice is better, and that there’s only one way of finding the best outcome (that is, quantifying costs and benefits till the end of time), we lose something essential in our decision making.
Take, for example, climate change. For an empathetic human watching the wiping out of New Orleans, Staten Island, and Haiti, it’s obvious that only two choices exist: either we spend the billions necessary to heal our planet and protect our towns from the inevitable battering to come, or we dawdle over our spreadsheets and figures until the entire world is drowned and there are no economists left to run the numbers. Economists do serve a purpose, and their methods can lead us to more or less cost-effective fixes. The danger comes, however, when we adopt the habit of infinitely quantifying and cost-comparing — useful when writing a budget — and gloss it onto our entire world. Maybe there are 1,000 valid ways of financing the search for renewable energy, but we don’t have 1,000 choices about whether or not to act on climate change. Mr. Sunstein’s spreadsheets may account for the lost future productivity from the thousands of lives lost in natural disasters, but I’d wager that they have no cells for entering in the loss and guilt we as humans feel when watching entire neighborhoods, cities and nations violently torn apart and massacred in ways that we might have prevented.
Human desires and intents are more complicated than what can be captured by quantifying costs and benefits. And sometimes our real choices are much simpler than the dozens of counter-factuals an economist might want to run to find the optimal course of action. It’s a dream to think of the powers that be allowing some dissenting non-economist voices in our public policy debates, but if ever they do, those voices might remind us of the full humanity of the “public” in public policy.