Zohran Mamdani, Free Buses, and Thinking Like an Economist

No graphs or maps today. I wanted to cash in on the Zohran Mamdani bonanza before something else becomes the topic of the day. But I’ll get back to Zohran in a minute. I recently read Elizabeth Popp Berman’s book “Thinking Like an Economist,” and it has given me a lot of reflect on. If you haven’t read it, the thesis is essentially that the “economic style of thinking,” which prioritizes efficiency maximization at the expense of other goals, came to dominate policymaking, at least among those in the centrist and left-of-center milieu. As a result, Democratic presidential administrations have been constrained in their ambitions. She cites, among many examples, President Obama’s adoption of what was originally a conservative health plan that emphasized free markets and competition as his signature policy proposal. Indeed, Berman argues, the economic style of thinking is so dominant that policies that do not emphasize efficiency but instead prioritize universalism or equality, like Medicare for All, are considered unserious. In the book, she goes on to detail how this style of thinking became so entrenched and then cites further examples of it in action.

Reading the book, I couldn’t help but think about how I used to, and to some extent still do, “think like an economist.” To be clear, that’s not always a bad thing, I don’t even think Berman would say so, but it did lead me to care more about maximizing efficiency than maximizing equity. Coming out of my economics master’s program, I was obsessed with the Earned Income Tax Credit as THE tool to reduce poverty. It’s so efficient! It gives people money AND encourages them to work! The problem, of course, is that the EITC misses the people who are most in need of assistance—those who are not working. Shifting my thinking on this happened over a long period of time, and through lots of exposure to ideas that emphasized equity and the right to live a dignified life from sources such as Matt Bruenig, People’s Policy Project, and the Bernie Sanders 2020 presidential campaign. I’ve come to be much more supportive of universal programs, such as a child allowance, than of means-tested benefits like the EITC.

Another policy that Berman discusses is the carbon tax, which people who think economically love because it’s the most economically efficient way to reduce carbon emissions, but which has proven itself to be unpopular when it has been tried in practice. This point really struck home with me, because I used to love the idea of a carbon tax. In fact, I’m still not convinced that it can’t work in some form. However, her point is that a focus on efficiency blinds people to other realities.

All of which brings me back to Zohran. Let me first say that I do not live in New York, but as a Person Who Follows the News, I understand my responsibilities, which include caring about who is the mayor of New York. Part of Zohran’s platform is to make buses in the city fare-free. This proposal has gotten pushback from some people who are otherwise sympathetic to Zohranmania. A quote from that linked blog by Ned Resnikoff is illustrative: “Is making transit free for everyone more or less effective than subsidizing fares for lower-income riders?” Here is a great example of the focus on efficiency at the cost of equity. In this analysis, someone who can afford a bus ticket getting one for free is a bigger problem than someone who can’t afford a bus ticket not getting one at all, because of barriers to signing up for benefit programs. I would have agreed with this analysis when I was in my Economist Era, but I’ve shifted to thinking more about equity than efficiency. Under an equity analysis, the excluding anyone due to their income is a problem.

It’s not that efficiency, or cost-benefit analysis, should never be considered. There are ideas that are too economically inefficient to work, and there are times when economically efficient solutions make sense—the acid rain cap and trade program is one example. It’s just that we should not use efficiency as our only, or even primary, mode of analysis. When you’re in the left-of-center policymaking space, it’s very easy to focus on efficiency. But it’s this kind of thinking that has left the Democratic Party largely bereft of bold ideas and led voters to become disenchanted. Zohran and those who think like him can help lead the Democrats out of this mire, one free bus at a time.