A second reaction is based on ‘avoidance’. This strategy is adopted by those who are aware of public choice arguments but see them as a direct threat to their most cherished ideas. So why is public choice theory such a threat? I think in part because it offers a more plausible account of ‘power relations’ than its neo-Marxist competitors. Public choice rejects the naive pluralist view that power is evenly distributed across interest groups by offering a non-Marxist account of elite power. Instead of assuming that large ‘classes’ such as ‘capital’ and ‘labour’ are the primary power players on the political stage public choice focuses on how individual incentives affect the capacity of different groups to organise and hence to wield power over others. Yes, business interests can be powerful – but not because they are businesses or because we live in a ‘capitalist’ society. Instead, they exercise power because in some sectors where there are a relatively small number of big players business interests may find it easier to overcome collective action/free-rider problems than other groups such as taxpayers and consumers-who find it much harder to form a cohesive political force. In more fragmented and diverse sectors by contrast ‘business interests’ often lack political clout – and may be less favoured than say labour unions or public bureaucrats with a monopolistic position in the state sector. From a public choice perspective there is no such thing as ‘business’ and ‘labour’ per se. Rather, there are different types of business and labour interest the political success of which depends on the specific incentives and organisational problems facing the actors concerned. As such, public choice offers a more empirically compelling account of the varied special interest outcomes we observe in democratic polities than simplistic theories of ‘class rule’.
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Dr Mark Pennington is the author of Robust Political Economy: Classical Liberalism and the Future of Public Policy.