What In Heaven's Name Is the Public Interest?
Special interests must yield to the public interest. Individual interests are special interests. Thus, individual interests must yield to the public interest. This means, in practice, that individuals must be prevented by force from acting against the public interest. This widely shared conclusion is invalid.
Used this way, the “public interest” is an undefined and undefinable expression. It’s an incantation. If, as we are expected to believe, the “public interest” is the interest of the public, it does not exist, because “the public” is made of different individuals who each have his (or her, of course) own interest and tries to maximize his own utility (as he sees it). The public interest would literally only exist if all individuals were identical, that is, had the exact same preferences and values, and found themselves in the same particular circumstances.
Those who invoke the “public interest” are obliged to retreat in defining it as what a democratic political system decides. That does not make it the interest of the public but the interest of the numerical majority who consciously and knowingly vote for it. Aggregating the opinions of all voters in such a way that each one has an equal say and the result is coherent is a well-known mathematical impossibility, under certain reasonable conditions. The “public interest” typically turns out to be the outcome of political horse-trading and what politicians or bureaucrats put on the political agenda in the first place. In other words, the “public interest” is what is decided by those who have the power to impose their decisions on others. (See my “The Impossibility of Populism,” The Independent Review, Vol. 26, No. 1 , pp. 15-25.)
Another way to rescue the “public interest” is to view it as the churning of private interests in the state’s cauldron. The state will give privileges to A at the expense of B, and then to B at the expense of A or C. Often, the state will simultaneously give to A and take from A, and the same for B and C. This churning will, on net, decrease the utility of everybody.
For a recent example (they are not difficult to find), see a piece of Financial Times columnist Rana Foroohar, who generally falls in love with any proposed government intervention that, she assumes, will not harm her: “How to make free trade fairer,” October 30, 2023. Her column, about what she calls “fair” trade, is best summarized by its subtitle:
It’s time to change settlement dispute systems that favour multinationals over countries — and their public interest.
So “countries” have “their” public interest? All the same public interest or a different one for each country? Isn’t any corporation and even multinational corporation a legal resident of one country? Aren’t the interests of its owners part of that country’s public interest? Or are they part of the world’s public interest? And how does Foroohar weigh the interests of the corporation’s owners (or its workers or customers) against the interests of some others in the country or in the world? She can only answer such questions in an arbitrary and authoritarian fashion.
For another recent example, consider Vice-President Kamala Harris speaking in London in front of a large slogan: “Artificial Intelligence: In Service of the Public Interest” (see “US Upstages Rishi Sunak with AI Regulation Plan,” Financial Times, November 1, 2023). Since the public interest does not exist, Ms. Harris in fact wants to impose by force her conception, or her tribe’s conception, or the current US government conception’s, of that dangerous unicorn.
I recently gave another example in my EconLog post “The Arbitrariness of the ‘Public Interest’.”
The only conceivable public interest resides in the common interest of all individuals to be equally free to each pursue his own interests within broad rules—which usually take a negative form, such as “Thou shall not kill.” This is the classical liberal ideal that James Buchanan and Friedrich Hayek* have explored. On this essential distinction between the common interest and the confused “public interest,” the last chapter of Geoffrey Buchanan and James Buchanan’s The Reason of Rules is enlightening, if sometimes disquieting. They argue that we can only speak of the public interest if and when some individuals voluntarily accept to support the costs of the collective action necessary to reform a state that does not correspond to the requirements of a unanimous social contract or the common interest of all individuals (see notably p. 163).
* I provide an introduction to Friedrich Hayek’s social and legal thought in my separate reviews of the three volumes of his trilogy Law, Legislation, and Liberty: Volume 1, Rules and Order; Volume 2, The Mirage of Social Justice; and Volume 3, The Political Order of a Free People.