In Chapters 3 and 4, dealing with models of routine politics, we treated parties and voters as oriented to identifiable goals regarding inflation, unemployment, and income growth. We drew on the familiar misery index and showed how it could be modified to represent different kinds of preferences, and even to represent a conception of social welfare or the public interest. In doing these things, we accepted goals and preferences as given, as predetermined, and as clearly defined. In this chapter and the next we shall step back and ask where goals and preferences come from and how well defined and authoritative they are. In this chapter we consider official public definitions of national economic goals, as well as what economists say about various targets of macroeconomic policy.

These chapters will provide an argument that there is no basis for an unambiguous or uncontestable definition of the public interest, and there is no basis for an authoritative social welfare function. This argument will undermine assertions that there are costs and pathologies of democracy. Without authoritative definitions of what public policy ought to be, there is no solid basis for comparing the outcomes of democratic politics to the best or the most appropriate outcomes. It is difficult to argue that democratic political processes lead systematically to inferior outcomes when superior outcomes resist precise and authoritative definition. In fact, the goals of public policy are defined and redefined in a continuing and fluid political process.