Is the notorious public interest really in the public’s interest?
Defining of the public interest is always very, very difficult.
Sir Keir Starmer, currently Prime Minister of the UK and leader of the UK Labor Party
Take Away
The ubiquitous concept of the Public Interest, if it can be defined at all, serves as the fundamental criterion for establishing the legitimation of power. Political power, then would be legitimate and necessary, and even acceptable, only inasmuch as it serves the public’s interest. However, not only abused by autocratic rulers who employed this phrase to identify what was best for the crown or for their estate. Also in today’s unlimited democracies most politicians, keen to get votes try hard to appeal to the masses by successfully hiding their agenda behind this utterly empty but irresistible slogan. Above all, it is the politically calculated and covert modification of commonly used terms that seriously weakens the sovereignty of citizens. Moreover, the deliberate changing of the words’ meaning critically damages the institutions and conventions of a state.
Public Interest
Although the earliest coining of the ubiquitous Public Interest phrase can be dated back to the 1590s[1], neither a Public Interest theory worthy of the name has since been developed nor did the idea ever make any operational sense for the past 435 years. The socio-economically significant political terms the “common- or general- or public interest” to our days still lack any clear let alone operational definition[2]. Not only provides this ambiguous, emotionally charged and politically domineering phrase the logical justification for the supply of any public goods and the rational grounds for their implementation. The phrase still keeps arousing the fantasy, first of social scientists, then intellectuals and finally of politicians as “secondhand dealers in ideas” (F.A. von Hayek). Due to its ambiguity, there exist countless competing conceptions of the public interest. Shaped and conditioned by the changing Zeitgeist, these interpretations range from such platitudes as “the public interest is the public’s interest” or the metaphysical claim that it is “God’s own plan”, to the romantic idea, that the public interest is a “process, rather than a policy” in which the needs and points of view of all citizens ought to be equally considered. Although, a conceptual definition of the public interest ought to play the decisive role in determining all state actions, a precise classification of this “multi-purpose” term apparently is of no concern for those who use it constantly. In other words the Public interest is such a broad concept that is flexible enough to respond to the facts and circumstances of any particular case. Indeed, it is regrettable that especially economics, more than the other social sciences, is liable to the periodical introduction of new, popular, yet mostly meaningless buzz words.
It was George Stigler’s pathbreaking 1971 article The Theory of Economic Regulation[3], which at last set forth a clear and testable economic theory of public regulation and thus fundamentally changed how economists organized their thoughts about government regulatory measures. Prior to the time when George Stigler (1911-1991) published his works of the economics of regulation, the notion that elected selfless politicians and bureaucrats sought first to favorably respond to the broad public demand for government services, dominated the relevant literature.
Social Justice
Spoken or written statements reveal parts of what we have in mind in order to inform and persuade others. They can be designed or may just happen, to implant in others beliefs and preferences they might otherwise not have. Language, then, always was, is and will continue to be the constant yet unnoticed current that shapes and coordinates our thoughts and words. Thus it is a remarkably subtle tool in the hands of both, the manipulators who abuse it by design and the unconscious, who do not perceive the work it is doing. Sadly yet, it seems as if we barely begin to realize that the intentional alteration of the meaning of words or sayings we grew accustomed to, has grave implications for the fabric of a free society. Above all, it is the politically calculated and covert modification of commonly used terms that seriously weakens the sovereignty of citizens. Moreover, the deliberate changing of the words’ meaning critically damages the institutions and conventions of a state. Thus, in general terms the most critiqued aspects of any Public Interest theory are its ambiguity and its inability to address imperfections in the regulatory regime. Further, it provides no framework for assessing when and if the Public Interest has been served. Even the quote at the top of this essay by the self-described ‘Socialist’ Sir Keir Starmer seems to suggest it.
Almost like the battle cry Social Justice[4], the Public Interest is a political concept that follows the respective biased ideals of the ruling elites. With its never-ending applications that are impacting the rights, health or finances of the public at large, it proves hopeless to pin down the Public Interest’s exact meaning. More importantly, the slogan provides an ideal opportunity for eager interventionist politicians to justify their role and allow them to tamper with society’s fabric, structure and the economy. It is mainly for these reasons that most politicians, trying to increase votes and their popularity can easily hide behind this ubiquitous phrase. In other words, without much troubles the best talkers can subvert the institutions of democracy by arrogantly commandeering the meaning of words, by stirring up people’s passions and thus shape the Zeitgeist. As a seemingly indisputable and for all intents and purposes irrepressible and almost sacred idiom, the Public Interest thus is a case in point.
According to John Stuart Mill’s well known harm principle, the only purpose for which a government’s power can be “rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others”.[5] There are arguments claiming that the harm principle was neither meant to be a guide for human behavior, nor that it is definite or precise enough to be useful for a definition of harm. However, to be sure, most government programs intended to protecting its citizens from physical threats posed by others or responding to and preventing the spread of infectious diseases would certainly meet Mill’s creed. In general terms, most of these Public Interest measures may be summarized as being among the core duties of any modern state that is founded and centered on the Rule of Law. In spite of this, especially during the past decade or so, countless democratically questionable mandates pushed the Public Interest doctrine to the fore. As a result unconstitutional infringements of civil rights, the seizure of confidential data, censorship of the media, confiscation of private property, of research facilities or the freedom of speech followed. These mostly biased measures are revealing the extent to which state control is exerted in the Public Interest over our private live.
Politics and the English Language
History is replete with examples of nations that abruptly committed some sort of self-destruction. And yet, instead of listening to their critics and discuss the relevant issues directly with them, today notably the fashionable craze and doctrinally loaded lobbies like ‘Diversity, Equity and Inclusion (DEI)’, ‘Woke’ or ‘Cancel Culture’ routinely claim the Public Interest concept in order to silence their sceptics. In a radical fabrication to evoke the sort of hysteria necessary to advance an otherwise rather unpopular agenda, these crusaders have hijacked the Public Interest doctrine to back up their thinly veiled socialist aspirations. It is hard to suppress the feeling that their rather ignorant acolytes are attracted to Socialism because they foolishly believe, it means Capitalism without the parts they don’t like.
Assuming these movements act in a ‘politically correct’ sense of the Public Interest, most of these self-styled guardians of democratic values, are actually claiming free speech for themselves but not for others. However, as it is known all too well that people who cannot speak their mind freely will never be able to think clearly and no democratic society could nor will prevail when dissent is silenced and opponents are treated as heretics or worse, when they are sidelined as conspiracy theorists. At any rate, these predominantly antidemocratic crusaders but also the past pandemic have renewed heated debates about the moral, legal and economic issues pertaining to the social impact and the consequences of the Public Interest concept.
The response of most governments to public concerns has led to communal conditions and a variety of political proposals and pushed the Public Interest doctrine to the forefront. These actions not only bring to mind F.A. von Hayek’s warnings of the dangers of Socialism of all stripes[6]. George Orwell’s significant essay on ‘Politics and the English Language’ is equally alarming as most advanced welfare states have amassed administrative functions and controls of and intrusions into individual lives.[7] However, it was Orwell’s dystopian novel Nineteen Eighty Four[8] that put into words the extreme level of control and power possible under truly totalitarian regimes. This distressing book explores how such governmental systems would impact the people who live in it. It grows even more haunting as parts of its futuristic agony already became an uneasy reality. For good or for evil, a sort of a global ‘police state’ undertakes large-scale surveillance, denunciation and covertly accumulates executive powers to an extent unthinkable in democratic societies up to now. As political power more often than not multiplies at the expense of the social power enjoyed by free individuals, the effects of these policies and programs most likely will lead to a permanent increase in scale and scope of state control.
By and large, the literature is littered with extensive and contradicting accounts. The political ideal to hold the mystical models of the Common Good, the General Welfare or the Public Interest in higher esteem than any individual action, thus seems as old as statehood. Among countless other sources, we can find this ideal in Plato’s Republic in which he claims that only indisputable government officials have the wisdom and foresight to determine the Common Good. For Aristotle the sole purpose of the state is to make it possible for the citizens to achieve virtue and happiness. As mentioned above, it was Richard Cosin who supposedly coined the Public Interest phrase in his work in the 1590s. Most totalitarian systems justified their countless socio-economic regulations during the Mercantilist era with the Public Good in order to promote national power.[9] Jeremy Bentham’s legendary claim that the “greatest happiness of the greatest number … is the measure of right and wrong” also comes to mind.
Over time hypotheses, promises and downright guesswork in political philosophy were dedicated to the study of the Public Interest. And yet, common among most social philosophers was the rather naïve and often condescending doctrine that in the Public Interest governments ought to serve the people in a way to make them the beneficiaries of their governing. Shaped and politically charged by an ever shifting Zeitgeist, it is no surprise that numerous conflicting interpretations and conceptions of this enticing slogan have evolved over time.
Auguste Comte
Alongside other seemingly insuppressible political mantras ranging from utter platitudes to meaningless clichés to a troubling ill-considered philosophical line of reasoning, it seems as if Auguste Comte has hugely influenced the underlying philosophy that shaped the current Public Interest reasoning. In his positivistic philosophy Comte insisted that social wholes are better known than the elements of which they consist and thus social theory, ought to start from our knowledge of the directly examined entities[10].
These ideas led Comte to consistently suggesting that only society as a whole is authentic and individuals who are forming any social order are but an abstraction. In other words, individual actions must be suppressed if they do not serve the mysteriously shrouded Public Interest. In such a model, in which the values of the whole society would be equal to those of any particular individual, the Public Interest would have a substantive content, and by definition, both the function and the motive of all government officials would be to formulate all their decisions in the Public Interest.[11] Yet, contrary to the view that political actors are supposed to work together to altruistically advance some notion of the Public Interest, the reality frequently proves different.
However, today’s dominant applications of this mainstream version of the Public Interest can probably be found in Vilfredo Pareto’s and A.C. Pigou’s works[12]. Broadly summarized, their models assume that the accurate role of any democratically elected government is to operate for the greatest benefit of society as a whole. Accordingly, each citizen implicitly takes it for granted that a society must be viewed as a single entity and thus has a sole set of values that must be condensed into an outline for implementing a detailed policy. This single set of values supposedly makes up the Public Interest and hypothetically represents the will of the people. This assumption keeps arousing the fantasy of social scientists, intellectuals and politicians. Thus during the past decades the Public Interest phrase became riddled with serious semantic traps and acquired an almost mystical meaning that entails a combination of inspiring expectations and appealing conjectures.
No Rules
Although, a conceptual definition of the Public Interest ought to play the all-decisive role in determining any government program employing the Public Interest, an operational classification of this multi-purpose term apparently neither was nor is of any concern to those who use it constantly. Due to the lack of a clear explanation, the objectives which the Public Interest is to serve thus must be confined to some very general, elusive and at long last, empty blueprints. By necessity, these outlines are and will continue to be insufficient to determine any concrete plan, even if we take all the technical means as given. Due to the fact, that the phrase is loose, ambiguous and politically quite easy to hide behind it, there is no rule book for working in the Public Interest. Thus, it became an integral part of the political dialogue, the body of law, of regulations and the general governance of modern democracies.
As mentioned above, we can assume that most Public Interest regulations are meant to protect consumers from harm resulting from irresponsible or fraudulent behavior or preventing the spread of infectious diseases among countless other purposes. However, except in emergencies most of these regulations are usually neither designed for nor implemented in a socio-political vacuum. Rather, these rulings emerge in a communal environment populated by private self-interested political actors who possess the authority to coerce private citizens to do as they say. This source of power has significant value to those who can influence and control it. In other words, the same lobby groups, which might be the target of regulations will often have the strongest interest in attempting to manipulate rulings or guidelines for their own benefits. However, when coalitions of private interests are able to influence and control the content of regulations, they will produce benefits for them instead of serving the Public Interest. This makes any society at large, regularly worse off and results in a decrease of competition and an increase in costs.
Free societies
Therefore, we ought to reconsider the decisive difference between organizations and free societies. Organizations are deliberately designed and created by either private parties, parliaments or other legislative bodies and aim at certain ends. They are created in the ‘top-down’ fashion. Free societies on the other hand, consist of a set of rules that has not been designed by anyone in pursuit of individual aims but has ‘evolved’ and ‘grown’ through the repeated actions of individual agents who didn’t intend to create a system. These basic rules of conduct, like most of the norms of civil or criminal law, are the results of thousands of years of actions, traditions, and adaptations. In other words, they are ‘the result of human actions, and not of human design’ (F.A. von Hayek) and are made up of independent people who are neither aware of a shared common purpose, nor do they knowingly serve it. In other words, a society of free people is a complex but unplanned system of values and actions, a pattern of reconciled aims, not shared ones. Thus, a society of sovereign people is distinguished by a spontaneous order and by scale-free networks.. Spontaneous growth occurs when individuals and groups with limited knowledge interact with other individuals and groups, giving rise to unplanned patterns of behavior and institutional forms. In view of that democratic societies can only be defined as complex, yet unplanned systems of reconciled, but not shared values and actions. Organizations, on the other hand are hierarchical systems and are purposefully created, managed and monitored by human beings.
Only during the slow but continual advancement of the human mind, individuals began to differ sufficiently to develop previously unarticulated social rules and behavior to the extent that deviate behavior could be corrected.
Thus, in order to function properly, every society (democratic or not) requires a minimal consensus entailing some basic rules, which allow its members to survive, communicate and predict the reactions of others to unknown social situations[13].
These ‘rules of just conduct’ are in large parts end-independent rules and are rarely written down or identified as a minimal consensus, nor are they the outcome of an election or have ever intentionally been drafted. They are the ‘result of human action, and not of human design’ and suggest not only an implicit agreement on these basic rules. These creeds hint at the tacit approval of guidelines regarding individual behavior and decision-making. Such society could also be described as a set of values oriented toward the assumed needs, desires, or interests of large numbers of people. However, the fact that not all fellows obey them does not invalidate their central importance and structural necessity. Thus democratic societies can neither be explained as a whole with a single purpose, nor can they be viewed as an organization in which people are not allowed to use their own unique knowledge of time and place for their own purposes. To recap, a society of free and independent people can only be defined as a complex, yet unplanned system of reconciled, but not shared values and has no mutual purpose or core curriculum. In other words, a society which does not approve of individual freedom and choices and which takes a common interest for granted, resembles authoritarian organizations in which every member follows orders and ought to be concerned with the completion of an assumed collective goal. Hence, it seems inconceivable that in a democratic society any policy that violates the minimal consensus with regard to the society’s own unwritten ‘rules of just conduct’ could be described as serving the Public Interest. Such rules of conduct have not been set by a wise and benevolent ruler in order to reach certain goals like the Public Interest. Rather, these are rules that have enabled certain societies to survive in competition with other societies.
A Very Hesitant Conclusion
After an honest attempt to research the literature for the term’s exact meaning, one is left with despair and surrounded by platitudes, generalities, and pseudo-philosophical arguments, mostly conditioned by the prevailing Zeitgeist and the individual bias. It becomes quite apparent that no general agreement can exist about whether this term has or had any meaning at all.
As it is impossible to know what we ourselves will be thinking any number of years from now, we will never be able to make an educated guess of what infants now in the cradle will be considering when they will ever have a chance to vote. Thus, there is no point in playing with any notion of an imaginary plebiscite to finally discover the meaning of the Public Interest. Similar to terms such as Justice, Friendship, Freedom or even Democracy, the concept of Public Interest refers to realities, which are so basic, yet so vital and prevalent in our daily lives that no one seems able either to encompass or to explain them in just a few descriptive words. Individuals will never be aware of how much they might contribute to and promote the Public Interest due to the fact that no democratic society is made up of a set of equally shared values oriented toward the assumed needs, desires, or interests of its people. In other words, the realization of political targets, vaguely defined as the ‘common good’ or being in the Public Interest, will result in the loss of individual freedom and the coercion of men by the state.
When more than 60 years ago Glendon A. Schubert worked on his book, The Public Interest: A Critique of the Theory of a Political Concept[14], he at least has identified three schools of thought concerned with the Public Interest concept. The first group Schubert labeled the ‘rationalist’ school, which believes that the Public Interest consists of the ‘will of the people’. In other words, the government ought to do what people want it to do. He classified the second school as ‘idealist’ that claims that the Public Interest consists of the course of action that is best for society as a whole according to some ‘absolute’ standards of values, regardless of whether citizens actually desire this course of action. In other words, government bureaucrats need to be fully versant in these values as they have to apply them to all circumstances by means of their own judgment. An educated public is helpful to understand the wisdom of the policies. Finally, Schubert identified the so-called ‘realist’ school, which claims that the Public Interest has no definable content, but the term may be applied to the results of certain methods of decision-making.
With lots of caveats and caution thus, the Public Interest may be used as a sort of benchmark with which individual citizens and potential beneficiaries can evaluate and discuss whatever actions a government considers. In that way, citizens can debate judgments and exchange opinions with their fellows. Under the erroneous, yet popular assumption that a so-called common good prevails in a free society and all citizens would identically act if they saw clearly, thought rationally and acted benevolently, any Public Interest policy can force individuals into acting against their own interests The political appeal for the Public Interest and peer pressure may also be used as a tool to motivate all those who are hard-pressed by public bullying to act against their own will or interest. Perhaps the Public Interest concept finally may be employed as a guide to and a sort of check on politicians and administrators whose public policy actions or decisions have no explicit mandate from the electorate.[15] However today one of the most tempting functions of the Public Interest is that political representatives can easily hide behind the phrase and can exploit the Public Interest in order to boost their own reelection bid.
Milton Friedman’s well-known statement sums it up: “People who intend only to seek their own benefit are led by an invisible hand to serve a public interest which was no part of their intention. I say that there is a reverse invisible hand: People who intend to serve only the public interest are led by an invisible hand to serve private interests, which was no part of their intention”.[16]
[1] See Richard Cosin (1548?-1997), ‘An Apologie for Sundrie Proceeding by Jurisdiction Ecclesiastical’ 1593, London. Royal Library; ESTC S122948.
[2]Although the term is widely used, only rarely can one discover any serious attempt to define it. Whereas, there are traces of definitions in the works of Walter Lippmann, Christian Bay, Glendon Schubert or Anthony Downs, authors such as F.A. von Hayek, James M. Buchanan, Mancur Olson, or Anthony de Jasay do not attempt to define the terms and, for good reasons always put the phrase between quotation marks.
[3] See George Stigler, The Theory of Regulation, in: The Essence of Stigler, Ed. Kurt R. Leube, Hoover Institution Press, Stanford University 1986.
[4] For an in-depth discussion of Social Justice see especially F.A. von Hayek’s Law, Legislation and Liberty, vol. II, Chicago 1976.
[5] See John St. Mill, On Liberty, London 1859. It is worth mentioning here, that Mill believed the ‘harm principle’ only applied to people who are able to exercise their individual freedom responsibly. Of special interest here is also Pedro Schwartz’ essay ‘Let me make my peace with Mill’, Econlib Articles, Indianapolis, Jan. 1, 2018.
[6] It is worth noting here that Orwell briefly reviewed F.A. von Hayek’s The Road to Serfdom along with Konni Zilliacus’s The Mirror of the Past in the April 9, 1944 issue of The Observer.
[7] See George Orwell, ‘Politics and the English Language’, Horizon, London, vol. 13, Issue 76: April 1946.
[8] George Orwell, Nineteen Eighty-Four. Penguin, London, 2021 (reprint of original)
[9] See Joseph A. Schumpeter, History of Economic Analysis, New York 1954, Part II, in particular chapter 7.
[10] See especially Harriet Martineau, The Positive Philosophy of Auguste Comte (1798-1857), 2 vols, London 1853; 2nd ed. Cambridge University Press 2009. Martineau, a former admirer of David Ricardo’s work became Comte’s most faithful disciple in England. It was largely through her work that Comte’s ideas made their entry especially into imperial Prussia and were enthusiastically embraced by the so-called Socialists of the Chair under Gustav v. Schmoller’s dominance and by the members of the ‘Younger German Historical School’.
[11] The illuminating analysis by James M. Buchanan (with H.G. Brennan) became an instant classic: ‘Monopoly in Money and Inflation’, Hobart Paper 88, London (IEA), 1981. Pgs. 7-8.
[12] This idea was first suggested by Israel M. Kirzner in his ‘Welfare Economics: A Modern Austrian Perspective’ in: Man, Economy, and Liberty. Essays in Honor of Murray N. Rothbard; W. Block, Ed., L. von Mises Institute, Auburn 1988.
[13] We owe these seminal insights to Friedrich A. von Hayek’s works on the evolution of spontaneous orders, of the law, the distribution of knowledge and the formation of societies. See especially Hayek’s most influential essay ‘The Use of Knowledge in Society’, The American Economic Review, Sep. 1945, reprinted in The Essence of Hayek, Kurt R. Leube & Ch. Nishiyama, Eds., Stanford 1984. Of special interest is also his Law, Legislation and Liberty, Vol. II, The Mirage of Social Justice, University of Chicago Press, Chicago 1973 and of course his magnum opus, The Constitution of Liberty, University of Chicago Press, Chicago 1961.
[14] Glendon A. Schubert’s book is a most important and valuable guidance: The Public Interest: A Critique of the Theory of a Political Concept, The Free Press, Glencoe, Il, 1960. Though, one might have some disagreements with Schubert’s analysis, it nevertheless is worthwhile and useful to reread his work after about 65 years.
[15] See especially Walter Lippmann’s The Public Philosophy, Mentor Books, reprint New York 1961; and also Christian Bay’s The Structure of Freedom, Stanford University Press, Stanford 1965; chap. 1.
[16] See Milton Friedman’s “Why Government is the Problem”, in: The Essence of Friedman, Ed. Kurt R. Leube, Hoover Institution Press, Stanford University 1987.
Our Partners
