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Market-Based Approaches

My house, my rules.

It’s the ultimate power move.

Many of us were subjected to this edict as we grew up. Our parents ruled the roost. And we had no choice but to comply.

I was no different.

I knew that I would need to finish my homework before I could watch television. And if it snowed, I’d need to shovel the sidewalk before making any snowmen.

It didn’t matter if I thought the rules were fair. They were final.

If I rose in protest, my pleas would be ignored. If I asked why the rules were the way they were, my parents would reply with Because I said so.

I was left with only two choices. I could obey. Or I could rebel and face the consequences.

I was a good kid, so I generally took the first approach. But plenty of my friends and classmates followed the second route, particularly as we all reached adolescence.

The rebelliousness forged conflict between my peers and their parents, just as their days under one roof were dwindling. With the freedom of adulthood nearly at hand, the whole situation seemed so pointless.

And yet, it was entirely predictable.


More than two centuries ago, a crisis played out on the shores of North America. A crisis that was essentially spurred by the words Because I said so.

The “parent” in this situation was the British crown. And the “children” were the residents of the American colonies.

The crisis centered on a plan to tax the colonists for such items as stamps and tea. The colonists reacted with rage, dumping chests of tea into the Boston Harbor.

The British reacted by passing a series of restrictive laws, known in the colonies as The Intolerable Acts. The colonists responded to this affront by declaring independence from Britain and winning the Revolutionary War that ensued.

The erstwhile colonists had done it. They’d freed themselves from the unilateral edicts of the British crown. And while the next steps remained uncertain, one thing was abundantly clear. My house, my rules was never going to fly.

The founding fathers took two steps to wipe out this option, for once and for all. They created a representative government, giving many Americans a say in the legislation they’d encounter. And they embraced an emerging economic model called capitalism to fuel the nation’s fortunes.

Many of the early theories of capitalism stemmed from the work of Scottish economist Adam Smith. In such publications as The Theory of Moral Sentiments and The Wealth of Nations, Smith wrote of the “invisible hand” of the market defining patterns of prosperity.

As the leading intellectuals of the era parsed Smith’s work, they came up with a novel idea. Perhaps market-based approaches could efficiently govern society. The United States of America was among the first nations to put such a theory into practice.

Over the years, these twin tenets — free markets and a representative democracy — have become the core of the American ethos. They’ve proven that no matter the outcome, we have a chance, and we have a say.

Still, we tend to tire of this winning formula. We seek to cut through the red tape, to sidestep debate, and to avoid bipartisanship. We aim to rule with iron fists.

Even if it’s more trouble than it’s worth.


The mandate came at a moment of exasperation.

Nearly two years into a bruising pandemic, America seemed to be stuck in neutral. Many Americans had received a vaccine to protect them against a deadly virus, but many others had not. Progress in quashing COVID had waned.

Into this quagmire came a hand grenade, courtesy of the Occupational Health and Safety Administration (or OSHA). Employees at large businesses would need to get vaccinated or face twice-weekly COVID testing. Businesses that didn’t comply would face steep fines.

It was a bold move with noble intentions. But it was ultimately a futile one.

OSHA’s directive quickly met legal challenges, which wound their way through the courts. Eventually, the United States Supreme Court blocked the action, arguing that OSHA had overstepped its authority. It turns out that Because I said so wasn’t a valid justification for such a broad government directive.

The high court’s ruling left a vacuum of ambiguity. Should businesses enact their own vaccine mandates to help stamp out the virus? Was the entire matter now moot?

As the debate waged on, I thought back to a move one major corporation had made before OSHA drafted its ill-fated policy.

Delta Airlines had asked its employees to get the COVID vaccine. But if they refused, Delta would charge employees $200 per month. The airline justified the surcharge by stating that it would cover the financial risk unvaccinated employees would levy on the company. To hammer home the point, Delta pointed out that it was paying an average of $50,000 in medical bills for each of its employees who were hospitalized with COVID.

On its face, this directive seems like the ill-fated OSHA one. Yet, it didn’t face legal resistance —or just about any resistance, for that matter. In fact, 90 percent of Delta Airlines employees got vaccinated weeks before the policy even took effect.

Why such different outcomes? Well, Delta Airlines skillfully explained the reasoning for each facet of its directive. They gave employees a choice on how to proceed. And they relied on a market-based approach to get the vaccine-hesitant off the fence.

It all came down to a simple point. Decisions have consequences. And the more directly we feel those consequences, the more likely we are to change our behavior.

In a capitalist society, we’re most likely to feel the sting of consequence financially. So, if eschewing a vaccine helps us to potentially spread a devastating virus, we might face anger and ridicule, but not the medical bills of those we infect. But if the decision makes our wallets $200 lighter each month — while our bills and expenses remain the same — we’re more likely to change course.

I often wonder why we don’t take this approach more often when tackling the big problems our society faces. Instead of trying to herd people like cattle to the desired outcome, why don’t we let market-based approaches guide them there?

We would likely make more progress at staving off climate change with market-based approaches. We could speed up adoption of new technologies. And we could optimize the way we live work.

Sure, such an approach is not universal. Texas’ move to a market-based approach for electricity providers failed spectacularly when the state faced a massive winter storm. And such approaches threaten to exacerbate, rather than eradicate, patterns of pay inequity.

But those are the exceptions, not the rule. Market-based approaches belong in the conversation more broadly. Top-down directives do not.

So, let’s leave My house, my rules behind. Let’s stop acting on our authoritarian impulses. And let’s let the invisible hand take over.

We’ll be setting ourselves up for greater success.

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