Public ends

In a capitalist economy we each pursue our self-interest with little regard for the welfare of our fellows, who we assume are looking out after their own. The fact that we live together means, of course, that what we do affects others and that our success in achieving our ends depends on our fellows. This dependence can enhance our well-being, as when we can purchase from others the things we want but do not have. Dependence can also diminish our well-being when we are adversely affected by decisions and actions taken without our consent.

Political economy suggests that we think about our institutions as ways of minimizing harms and maximizing benefits of interdependence. The two most important sets of institutions are those associated with markets and with government. The market is meant to enable us to take advantage of each other's self-interest; government is meant to minimize the harms pursuit of self-interest poses for us and to deal with needs the market cannot satisfy or satisfy well.

In this view the aims of government do not differ in kind from those of the market: to enable us to enhance our private welfare, to achieve our private ends so far as possible, and to secure and safeguard our ability to define and pursue our interests. We conceive the ends of government and market in essentially the same way; they are to serve the private interests of individuals.