George Stigler and the Myth of Efficient Government

This article argues that while there are a few transparent similarities between politics and markets, the fundamental differences between them render the Stigler-Wittman view that politics is “just another market,” and therefore always “efficient,” dubious at best. Markets are not perfect in any neoclassical sense (nor is anything else on earth, for that matter), and neither is democracy. The Stigler-Wittman view is based on a false view of how both markets and governments operate and also suffers from being ahistorical.

Volume 16, Number 4 (2002)