Lubbock Left

I’ve been reading Dan Ariely lately. He’s the poster child for Behavioral Economics, and his book Predictably Irrational is fascinating (Amazon link).

In late 2008, when Alan Greenspan made the shocking statement that the free market did not behave as expected, I nearly fainted. Since that time, I’ve been interested in what proponents of behavioral economics have to say. So far, I’m finding their methods and conclusions fascinating, and I’ll have more to blog about behavioral economics now and then over the next few weeks.

For now though, I want to examine one of Dr. Ariely’s ideas through a partisan lens.

Try this thought experiment: Say you’re at thanksgiving dinner at your grandparents’ house. The whole family is there: aunts, uncles, cousins and all. You eat a delicious dinner with turkey, stuffing, casseroles — the works. At the end of the dinner, you stand up, take out your wallet/purse, and say, “Grandma and Grandpa, that dinner was delicious. It must have cost a lot to prepare. How much do I owe you? Three hundred? Four hundred?” What would the family’s reaction be? Almost certainly, jaws would drop and eyes would bulge at the highly inappropriate faux pas you just committed.

What is so embarrassing about trying to pay for a family thanksgiving dinner? Essentially, the embarrassment comes from trying to operate under market norms where it is more appropriate to operate under social norms. The important thing was to come together for a meal as a family and share in that fellowship. Bringing up money at a time like that would be like farting in church.

I am convinced that this market norms / social norms switcheroo happens all too often in the political world, and politicians and pundits (usually Republicans, but sometimes Democrats too) have been getting away with such transgressions unchallenged for too long. Without a winning moral argument, they substitute a market argument, even if it’s inappropriate (not to mention false most of the time even in market terms, but that’s a different post).

Health care is a perfect example. The social norms surrounding health care are pretty self-evident, I think. Public health is a public good. It’s good to live in a nation where, you and your fellow citizens will be healthy and have access to the health care they need. Desiring good health for your neighbor is a moral good. These ideas represent the framework in which our health care discussion should be taking place — the framework of social norms.

However, we see market norms setting the terms of the discussion on both sides of the health care issue. Health care is too expensive. Health care is too inefficient. Health care providers should compete to innovate. Cost, efficiency, and competition are important aspects of health care, to be sure — but they are secondary issues compared to having a working health care system nation-wide.

As I mentioned in the comments of my previous post, I think environment/pollution issues suffer from the same market norms vs social norms problem. The financial details are not as important as the big picture — we have to minimize pollution and maximize environmental protection for the good of everyone living on the planet because it’s the right thing to do.

Education is another arena in which we often get bogged down in a market values discussion when social values are more important. It’s more important for us to value education across the board as a nation than it is to send more or less money to this or that school or district. The social norm of valuing education for all is primary, and the market norms of cost and competition among schools are secondary. Yet, thanks to No Child Left Behind and similar legislation, our national dialogue about education has been stuck in a framework of competing students and schools instead of focusing on the public good of an education for all.

I’m not saying we shouldn’t ever talk about market values; someone needed to buy the ingredients for that thanksgiving dinner, after all. However, having the thanksgiving dinner with the whole family present is the key thing. I’m not saying that money isn’t an issue — it’s just not THE issue.

The thing about market norms vs social norms is that once you get started with a discussion under one framework, it’s very difficult to switch out of it and into the other one. In other words, we will lose sight of our big-picture social goals if we let the discussion bog down in this or that economic aspect. We have national priorities that need to be taken care of, and I believe that looking at them primarily through a market worldview tends to put us in the wrong mindset to get them done.