If you are like me, you tend to think a lot about your personal and family values at this time of year. ‘Merry Christmas’ or ‘Happy holidays?’ Turkey or ham? Who or what is the reason for the season? Sweet potato pie or pumpkin pie? Which is more blessed — to give or to receive?
This year, I have also been thinking a good bit about the values that have shaped policy and economics in our country for decades, sometimes centuries.
Many American economists and policymakers would tell you that in our country, we value free markets. Economic theory says free and competitive markets maximize efficiency, and this idea is the cornerstone of American capitalism.
But, while market freedom may be our highest economic value, it is not our highest value, and I would not argue it should be. If it were, there would be no such thing as economic policy; we would have one policy, and it would be to have no policy.
What higher values do we see in American policy?
We value economic efficiency, even if it means restricting freedom of markets. This value is apparent when we regulate monopoly markets, forcing monopolists to maintain lowered prices and forego profits they would earn in a truly free market. The result of these policies is to move the market toward the perfect efficiency of perfect competition.
This emphasis on market efficiency over market freedom has been around since at least 1890, when the Sherman Anti-Trust Act was passed making monopolies and monopoly-like cartels illegal in the U.S.
We value consumer protection, even if it means giving up market efficiency. We see this in laws that set price ceilings or floors like rent controls or anti-price gauging laws. In some cases, our government creates monopoly-like conditions in order to protect consumers. They do this through licensing requirements for providers of health care, legal services, child care, etc.
We value innovation over competition. This value shows up in patent and copyright law. We grant temporary monopoly status to creators and innovators in order to encourage individuals and firms to take creative risks.
We value safety and order, often above all else. This value shows up all over our criminal justice system. We choose to restrict certain markets because they are deemed unsafe or disorderly. Examples of these policies are cigarette tax, alcohol tax, and criminalization of possession or use of specific drugs.
This is, of course, not an exhaustive list of American economic values or even of examples of manifestations of each of the values listed.
And usually, policymaking is so complex it is hard to identify what values are being displayed in a particular law.
So, here is an idea for a fun conversation starter at your next holiday gathering. I bet your friends and family can come up with several additions — or contradictions — to my list as you enjoy whatever pie you value most.