Market Ideology and Public Policy

Abstract

Much public choice theory takes a free market model as its benchmark for evaluating political behaviour. It assumes that market systems are inhabited and operated by rational egoists and that under competitive conditions the results will be generally beneficial. This of course is a replay of Adam Smith’s ‘hidden hand’, whereby the self-interest of butchers and bakers promotes the prosperity of the whole society. By contrast, according to these theorists, politics is a difficult and treacherous terrain for harmonising the self-interest of individuals.