...I try not to pontificate on secular issues while wearing my economist's mitre...
All economists in the neoclassical tradition are conservative on economic matters; I am no exception. There is no point being an economist if you don't think that prices convey meaningful information and if you don't believe that they affect behavior in a systematic (and sometimes even quantifiable) manner.
At the same time, not everything is traded in markets, and hence prices provide an incomplete picture of the workings of an economy. People also have systematic biases in how they process information, and we know that decision making in the face of uncertainty – particularly "long odds" – seems to "get things wrong" in a manner that distorts markets for insurance and other forward-looking behavior. In addition, information is costly to produce, obtain and process and so people often rely upon habit and mimic the behavior of those around them rather than directly weighing the costs and benefits of a decision.
Economists tend to focus on decisions that involve purchases. That's in part because transactions that involve money are the easiest to measure. In contrast, economists tend not to focus on how we allocate time. Anyway, while economists are convinced that money matters, people have "frivolous" hobbies and non-trivial addictions, care about status, and exhibit altruism towards not just family but even strangers. Money is not all that matters, and sometimes it is not the most important element of behavior. In short, both markets and economic analysis have limits. Of course so do political systems. Humility is paramount.
It is easy to confuse values with analytics. No one likes higher taxes, given the ceteris paribus [everything else held constant] alternative of lower taxes. However, the US is the most prosperous large society in history, and also one of the most lightly taxed members of the OECD (the Organisation of Economic Co-operation and Development, the rich countries' club). It is simply wrong to state that we can't afford to pay for X or Y, unless you believe America isn't great -- Spiro Agnew's nagging nabobs of negativism. Both our own history and comparisons with other OECD members suggest that higher taxes do not result in economic armageddon. We are not a poor, developing economy: "we can't afford" is not a statement about economics but about values: "I don't think we should pay for...".
Now there are things I don't think we as a society should pay for but on which we do in fact spend money—and likewise I have my list of what we ought to do but don't. However, when speaking as an economist, I can only justify a role for government where markets don't function well, and where cost/benefit analysis suggests that government can work, sort of. Since these activities often involve services that aren't priced in markets and where output and quality are hard to quantify -- if that wasn't the case, markets would "work" -- governments are typically asked to do the impossible. Sometimes they succeed, a testament to the dedication of most civil servants.
I also have my personal values. From an ethical standpoint I don't like trafficking in youth or murder for hire. But as an economist I can view those as simply markets in which supply equates demand. Markets are amoral; I am moral (albeit flawed and sinful). I'm quite happy to see us interfere with those sort of markets, a stance that I'm thankful is widely shared. Of course I can try to identify externalities and otherwise attempt to justify intervention wearing my economist's hat. But I don't think it's merely a matter that the price of murder is too low, it's that such behavior is morally repugnant at any price. Much harder is the "democratic" nature of markets, in which participants "vote" with their pocketbooks. Some have deeper pockets than others, and so cast more votes.
I also note the tension between programs best run at a national level and those at a local level, relative to the current mix. Many of these lines were drawn in the early 1780s; some were redrawn through civil war, and our Supreme Court continues to render judgments. Independent of such core disputes, economic change means that for some issues the "nation" element is undervalued, while in others the heterogeneity of local needs is not sufficiently appreciated in our political structure. It is very difficult to grapple with that, as it mixes "hard" economic analysis with political philosophy in a manner that is very difficult to disentangle.
I like to think I'm pragmatic on such things. Hence I believe there is no single mix of local, state and central government that will handle the wide variety of needs of a modern society equally well – and even if we came up with one today, it wouldn't be the ideal system by tomorrow. I thus see "states rights" and "federalism" as stances that cannot look to economics for justification. Likewise there is no time-invariant list of what governments should and should not undertake. I have my beliefs, but I try to temper them with empirical analysis of which issues are big and which are small, and of what works and what doesn't. I don't find ideology particularly helpful for either task.
Even when I can offer arguments based on economic analysis, I believe such structural decisions remain fundamentally political: our nation is premised upon openness to a multiplicity of voices wanting their own values and priorities to be reflected in policy. If philosophers were kings...well, economists certainly aren't kings, and that's not going to change. I don't always avoid the temptation, but I try not to pontificate on secular issues while wearing my economist's mitre.
