BEYOND POLITICS Markets, Welfare, and the Failure of Bureaucracy A ““illiam C. Mitchell _Randy T. Simmons Foreword by Gordon Tullock The Independent InstituteContents fables and Figures ord, Gordon Tullock et Failures and Political Solutions: ‘View irom Welfare Economics Market Process, 4 : ailore a8 Justification for Restraining the Allightsresered No parti publication may be reproduced or ransmind in ony form ee attire 90 Jit ad by any means clectronic or mechanical icudig phorocopy, recording or ay ime ‘Sorage and eteval etm without petmanon wring fon the Publier Copyright © 1994 by The Independent Istute Published in 1994 in the United States of America by Westview Pres, Inc, 5500 Cental A ‘ue, Boulder, Coloado 80301-2877, and n the United Kingdom by Westew Pres, 3 onsale Rosd, Sarsmertown, Oxfocd OX? 7EW Library of Congres Cataloging in Pubsion Data jcipation as Salvation, 24 Mein ons of the Polity, 25 “eyond poli mark, wel, and thelr of ueauragy/ Bcnipeneae Scentific 7 ‘ila €’ Meet nd Randy Sooo ” gone Saenclle Mansgers.20 nam Ieguds bistigrapbieal erences sd nde. ISHN 0.8135.25053— SBN 08153 2308-1 pb) Soci choe 2: Baresecy 1 Snes nie Hishteaas7 1954 movao Printed and bound in che United Seats of America “happen perm ne ngme Chimes salen Polity as an Economy (of Sorts), 41 Heer arta at Fundamental Naor of Cllective Choice, 44 39 ae118 Market Failure and Government Intervention: e View from Welfare Economics WELFARE ECONOMISTS dethroned markets they also admin- the coronation of government. Even the most elementary of modern ies texts routinely inform the reader that markets—free and unfree from serious and inherent imperfections. We are told of un- pplied public goods, exorbitant and ubiquitous social costs of private inevitable husiness eycles, unprotected consumers, and unfairly d wealth and income. discussions have a powerful impact because they are intuitively ap- and understandable to the general public and especially to idealistic Moreover, the causes of failure are seemingly clear and the solu- lily at hand. When markets fal, this argument goes, we must resort ‘can rely on politics and governmental administration. Resources allocated efficiently, and wealth and income will be fairly distrib- is, more equally divided. Furthermore, political activity will en- individual citizens while the unseemly, raucous, and self-interested tion in the market will debase them, sh most economists reject the more extreme indictments por here, the thrust of economists’ arguments in recent years has been in jon. Moreover, social scientists untutored in the formalities of es aud the general public are eve wore inclined wo take a jaune view of the workings of a market economy. For them, any activity ted by self-interest is at best suspect and at worst contaminated. Smith’s notion of an “invisible hand” at work in market forces is regarded as a contradiction in terms; public benefits cannot emerge competition and self-interest. In contrast, since political actors are red selfless and well informed, the public interest can be readily and ely divineds since the political process is considered costless, the interest is easily achieved, And political conflict debases no one. ‘eject this simplistic political view and contend that market failure is, a