The title of the book leaves little doubt about its purpose, and what was left is eliminated by what is written on the dust jacket: “The book traces the origins of the neoliberal order to public choice theory and argues that the reinvention of government on the model of the market would have been unimaginable without the emergence of this body of thought.” Another book on neoliberalism, and another book that blames public choice. An air of déjà vu, isn't it? Yet, reading The Marketizers proves to be stimulating. Not because of new archives that would reveal that another of the revered thinkers of the past few decades is just as guilty as the others for having given birth to this evil ideology. Not because it uncovers a conspiracy or debunks a myth. But because its thesis is original, much stronger than what the title suggests. But also, not be as strong as it seems. Let us see why.

Jensen starts with a claim the US president Bill Clinton made in his State of the Union address in January 1996 on the need to reinvent the “American government on the model of the market” (7). The relationship between citizens and their government, suggested Clinton, should be viewed as the one that exists between customers and private firms. Now, Jensen believes that the commodification of politics, the reduction of politics to a commercial exchange, is what defines a neoliberal order. To him, the citizens of a neoliberal society are relegated to the position of mere consumers, indulging in the (public) goods and services that the government, as their sole raison d’être, supply. Therefore, by asserting the need for “a marketized state” (6), President Clinton and his administration finally turned the United States into a neoliberal order.

Devastating, certainly, but a move that cannot be attributed to just a few individuals, whatever their political responsibilities were. It came after years of social, cultural, and economic change. But, much more crucial, this new view on politics would not have been possible without the writings of public choice theorists such as “Anthony Downs, James Buchanan, Vincent Ostrom, and William Niskanen” (3). They “opened a space of imagination that made it possible to remake government in the image of the firm” (3). They created neoliberalism intellectually, which made it practically feasible. And this is what Jensen discusses in his book. More precisely, he mostly leaves aside the question of how public choice theorists effectively persuaded citizens, politicians, and bureaucrats that they should consider themselves as economic agents, of how ideas developed in academic circles percolated throughout and transformed American society. He notes the existence of reports that referred to public choice theory to demonstrate the influence of the ideas and to legitimize his focus on the process that led to representing citizens as consumers and government as firms. The Marketizers tells the story of an idea, not of how it became real.

That story begins at the end of the nineteenth and at the beginning of the twentieth century in Europe in the works of the voluntary exchange theorists. Jensen does not say much about them, but these public finance economists were important for claiming that taxes should be viewed as prices, the prices citizens pay in exchange for the public goods and services governments supply. These economists preceded Richard Musgrave, Harold Bowen, and Paul Samuelson, all three of whom, in the 1940s and 1950s in the United States, assumed part of the legacy: they rejected voluntary exchange theory but stuck to the idea that the sole and only role of governments is to supply public goods and services—implying that citizens are consumers who buy public goods and services. Thus, at that time, the state had been (theoretically) commodified. The marketization—the difference is not clear—came a little later, at the end of the 1950s and in the early 1960s, when public choice theorists modeled “politics as a marketplace . . . and argued for the marketization of government” (e.g., Downs, Buchanan) and defended federalism for being a competitive, market-like political system (Tiebout, Ostrom). Then, in the 1960s and 1970s, came the defense of the use of incentive mechanisms to improve the efficiency of governments and bureaucracies—it was done by Roland McKean, Gordon Tullock, and William Niskanen. It completes the story, and the book ends.

Jensen tells his story in a reader-friendly style. The Marketizers is easy and enjoyable to read. It's a page-turner, indeed. Part of the fun comes from the huge amount of information Jensen gives throughout the book. But one must note that some of Jensen's (strong) statements are not always necessary to his purpose. Does it help to know that Becker's 1957 article on competition and politics was published in the Journal of Law and Economics, as Jensen suggests it does? “It was no coincidence,” Jensen writes, “that it was published in the Journal of Law and Economics, the house journal of the peculiar conception of the intersection between law and economics” (83). How useful is it to be told that Buchanan could not be “the mastermind of the American right” because his “work was a failure” (154)—since he abandoned Wicksellian unanimity, which he had championed for decades, and began to advocate for balanced budgets to control public spending? Also, Buchanan may not have always been clear on balanced budgets, even if he always found the constraint useful to control governments, but he early admitted that “absolute unanimity” was so strong that one could rely on a relative unanimity to made decisions (see, e.g., Buchanan 1959). Or why do we have to be reminded that “the implication of the Coase theorem is that the initial distribution of property rights is a necessary condition of market transactions” (221)? Who claims that market transactions do not require property rights? Besides, doesn't the Coase theorem say that the original assignment of property rights does not matter?

Also of importance is that Jensen reviews the works of a lot but, obviously, not all public choice theorists. The field is thus reduced to some of its main figures. Should an entire field be thrown away because of the faults some (supposedly) committed? Is there not, among public choice economists, some who go beyond the radical assumptions made decades ago? What do we do, for instance, with theories of expressive voting? The risk of confusing the whole with the parts is worth heeding. One should be conscious of that. Just as one should be conscious that Jensen's story is not about public choice theory only. Public choice theorists were actually neither the only ones, nor the first, to theorize a commodified or marketized state. Musgrave, Bowen, and Samuelson did not “advocate marketization” (236) but “nonetheless operated with a notion of government as a supplier of public goods and services, which mirrored the firm. In this sense, they commodified the relationship between government and citizen, making it resemble the relationship between the firm and the customer” (236). How interesting, new, and provocative—so much so that one wonders why this original claim was put aside while what was put forward was the more trivial claim about public choice. Why downplay the originality of the book?

Another aspect of the analysis that might have been stressed more relates to the process through which the role of citizens and governments was redefined. It involved no single culprit. There was no master and his puppets. There was no plan, at least none that Jensen mentions, either individual or collective. Commodification and marketization happened: confronted with the same concrete problem—the growth of public expenditures and the need to “identify the optimal output of public services” (236)—different economists modeled the state in the same way. There were Musgrave, Samuelson, and Bowen on the one hand and, on the other, the public choice theorists. The former had “sympathies that leaned leftward” (63), and the latter had right-wing sympathies, one imagines—nothing is said about their political orientation. Which means that—a conclusion Jensen does not draw—neoliberalism did not emerge for ideological reasons. An interesting and original point. Which then raises a question: Why such a homogeneity of views? Jensen does not raise the question because he sees a rupture rather than a continuity. But is it not intriguing that these economists came out with a similar view on the state and on citizens, even though they were coming from a different side of the political spectrum? Or was it because they were working in the same theoretical framework? That they disagreed with each other, as Jensen sometimes notes, is not unlikely. And if it were the case, it would reinforce the claim that neoliberalism is not just ideological. Jensen does not go as far as that, but this is an opening the book makes possible.

Then, one has to ask whether Jensens's thesis holds. Did the economists who appear in The Marketizers, the public choice theorists and the others, build models that reduce politics to a commercial transaction? Yes, if, for instance, a price is seen as a price whether the term is used for public goods or for private goods. Or if the argument that government intervention is necessary to solve market failures is interpreted as reducing the state to a market. Or if focusing on government intervention to solve market failures (again) is understood as meaning that government has only one commercial task to perform and the task is without any political dimension. If one accepts that those things are true, then Jensen is right. Otherwise, he is not. We suggest that the latter may be the case. Here are some of the reasons why.

Let us start with the “prices” of the voluntary exchange theorists. These were not market but political prices. Consequently, paying taxes—even if called “prices”—could not mean that citizens were in a market relationship with the government (it was rather supposed to mean that citizens were willing to pay these taxes). There is more in a tax as a political price than in a market price. Or still in other words, a political price does not correspond to a marginal utility, as a market price does. The use of a name (price) or even the use of a medium (money) does not transform any exchange relationship into a market relationship. There are some cases in which the use of money does not mean commodification and marketization: a transfer to poor people no more implies a market relationship between a benefactor and a recipient than paying a fine for breaking a law means buying out the right to break the law (see Sandel 2012: 65–70 on “fines” and “fees”).

What about the idea that governments are substitutes for markets because they only aim at solving market failures? For one thing, market failures can receive an extremely extensive definition, and therefore the scope of government intervention in the economy could be rather large—it is not exact that Samuelson's theory “allowed for the supply of only a very small proportion of the goods and services that the mid-century American state actually provided” (60). Then, solving market failures is not devoid of political content. The famous Samuelson condition requires a social welfare function that says how much each individual has to pay, and it cannot be implemented without coercion, two eminently political actions. To Buchanan (1959, e.g.), the way an externality could be internalized was the result of a collective action. In this regard, let us add a precision. Buchanan distinguished two forms of collective action—private and voluntary or public and coercive. The first one could be similar to a market exchange in that it was voluntary but it nonetheless meant that individuals had to organize themselves, build institutions, devise rules and constraints. Again, an obviously political process and certainly not of a commercial nature. The entity that produces a public good—be it a club or a pure public good—differs from a firm that sells goods on a market.

Finally, can it be said that Samuelson, Musgrave, Bowen, and all the public economists who analyzed the conditions that have to be satisfied to guarantee an optimal allocation of resources in the presence of interdependent utility functions really commodified governments? Did they, and do other economists, reduce governments to the rank of supplier of public goods and services, because (or when) they analyze only this function? If yes, does it not then mean that even the economic actions the government performs should not be analyzed by economists, and beyond, that they should escape any economic consideration at the risk of being viewed as a form of marketization? Certainly some economists advocated the privatization of governments or the evaluation of the functioning of governments on performance criteria—such criteria were also used in state-owned firms in the Soviet Union—or really wanted to depoliticize (and therefore commodify and marketize) the relationship between governments and citizens. This does not mean, however, that the pursuit of the public interest, of the common good, should be exempt from any efficiency concern. Jensen may push his reasoning too far. But it nonetheless remains that the idea is extremely seductive, provocative—especially when linked to the names of economists such as Musgrave or Samuelson—and original. It should be handled with care, but it had to be made. And we can thank Jacob Jensen for having done that.


Buchanan, James M.
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Positive Economics, Welfare Economics, and Political Economy
Journal of Law and Economics
Sandel, Michael J.
What Money Can't Buy: The Moral Limits of Markets
New York
Farrar, Straus and Giroux