Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government

311 Pages·1994·32.045 MB·English

by  Hugh Stretton, Lionel Orchard (auth.)

PUBLIC GOODS, PUBLIC ENTERPRISE,
PUBLIC CHOICE
Also by Hugh Stretton
CAPITALISM, SOCIALISM AND THE ENVIRONMENT
HOUSING AND GOVERNMENT
IDEAS FOR AUSTRALIAN CITIES
POLITICAL ESSAYS
THE POLITICAL SCIENCES
URBAN PLANNING IN RICH AND POOR COUNTRIES
Also by Lionel Orchard
MARKETS, MORALS AND PUBLIC POLICY
(edited with Robert Dare)
Public Goods, Public
Enterprise, Public
Choice
Theoretical Foundations of the
Contemporary Attack on Government
Hugh Stretton
and
Lionel Orchard
© Hugh Stretton and Lionel Orchard 1994
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenhnm Court
Road, London WI P 9HE.
Any person who does any unauthorised net in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
First published in Great Britain 1994 by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.
ISBN 978-0-333-60725-1 ISBN 978-1-349-23505-6 (eBook)
DOI 10.1007/978-1-349-23505-6
First published in the United States of America 1994 by
Scholarly and Reference Division,
ST. MARTIN'S PRESS, INC.,
175 Fifth Avenue,
New York, N.Y. 10010
ISBN 978-0-312-10742-0
Library of Congress Cataloging-in-Publication Data
Stretton, Hugh.
Public goods, public enterprise, public choice : theoretical
foundations of the contemporary attack on government/ Hugh
Stretton, Lionel Orchard.
p. em.
Includes bibliographical references and index.
ISBN 978-0-312-10742-0
I. Public goods. 2. Social choice. 3. Government business
enterprises. 4. Economic policy. I. Orchard, Lionel. II. Title.
HB846. 5.073 1994
338.9-dc20 93-31621
CIP
8 7 6 5 4 3
02 01 00 99 98 97
to Sue
Contents
PART ONE
Motives 1
Authors' purposes 1
Citizens' purposes 3
Institutions' purposes 7
Culture and motivation 15
Summary 17
Theorists' purposes 19
2 A Very Short History 21
An age of innocence: Buchanan, Arrow, Samuelson 21
Individual gain as the only political motive: Downs, Tullock,
rn~ ~
Factual versus axiomatic accounts of bureaucracy 36
Rent-seeking 38
Coming of age: the state of the art in 1971 40
Empirical studies of private gains from government 42
Explanation, prediction and Occam's Razor 44
Direct and representative democracy 45
The size of government 46
Public enterprise 47
Critics 48
PART TWO
3 Public Goods 54
Public goods theory 54
Social choice theory 57
The theories together 65
The uses of public goods 71
Summary 77
4 Public Enterprise 80
Facts 80
Questions 83
Criteria of efficiency 84
vii
viii Contents
Consumer sovereignty 87
Incentives in theory and practice 92
Workers' incentives 94
Directors' incentives 103
Death, takeover, reform 113
Enterprise and system 120
5 Public Choice: The Attempt 123
The theory 123
The defence of homo economic us 126
Bureaucracy 134
Rent-seeking 135
Positivist pretences 141
Meanings of unanimity 144
Processes and outcomes 148
Disabling the democracy to discipline the bureaucrats 151
Authority and the public interest 154
Endowments 158
6 Public Choice: Living with Failure 163
Explaining diverse, unstable, complex behaviour 163
Protecting the law 167
Relaxing the law 169
Psychology 169
Morals 173
Affection 178
Scientistic ambitions 179
PART THREE
7 What to do Instead: How to Mix a Mixed Economy 184
Modes of production 184
Households 187
Private enterprises 194
Public enterprises 205
Determining the mix 208
Theory for mixed economies in changing times 216
8 How to Think Instead: The Resources of Political Theory 220
Conservatives 220
Socialists 225
Contents ix
Feminists 235
Environmentalists 245
Liberals 252
Communitarians 266
Notes 278
Works Consulted 286
Index 297
Part One