Crumbling infrastructure beside a vibrant community garden, symbolizing economic disparity and potential.

Is Our Economy Really 'Public'? Unmasking the Crisis and Reclaiming Our Future

Author's portrait.
Reese Marlowe in Politics & Policy April 2025 • 5 min read.

"A Deep Dive into June Sekera's Critique of Neoliberal Economics and a Call for a New Public Economics"


In an era dominated by right-wing ideologies advocating for the shrinking of the state, understanding the dynamics at play is more crucial than ever. June Sekera's concise yet insightful book, 'The Public Economy in Crisis: A Call for a New Public Economics,' offers a valuable starting point for those seeking to grasp these complex issues without necessarily possessing an extensive background in public finance.

Written as part of the Springer Briefs series, which covers diverse subjects ranging from energy to education, Sekera's work chronicles the decline of the positive state under neoliberalism. Rather than serving as a deep dive into theoretical intricacies, the book serves as an accessible introduction to the subject matter, while still engaging with important theoretical considerations. Sekera's analysis is rooted in the context of the liberal state and draws inspiration from institutionalist thinkers like the Galbraiths. She envisions the state as playing a vital role in safeguarding the common good and protecting the democratic rights of its citizens.

Drawing upon the wisdom of John Kenneth Galbraith, who cautioned against the erosion of the public sector as early as the 1950s and 1960s in classics such as 'The Affluent Society' and 'The New Industrial State,' Sekera builds upon this foundation. She extensively references James K. Galbraith, opening her book with a quote from 'The Predator State' regarding the loss of capacity to govern. She attributes this loss to the imposition of market models upon the public sphere, resulting in what she argues is an assault upon democracy itself.

How Market Models Undermine the Public Good

Crumbling infrastructure beside a vibrant community garden, symbolizing economic disparity and potential.

Sekera meticulously examines the transformations in existing governance processes and links them to shifts in economic theory. Her ability to cut to the chase and articulate her arguments with clarity is commendable. She traces the deterioration of the public sector to the imposition of market models on government functions, where they are fundamentally inappropriate. In the public sector, the absence of buyers, sellers, and exchange mechanisms highlights the stark contrast with market-based systems. The primary goal of the public non-market is to collectively satisfy societal needs, with allocation decisions made collectively through democratic means such as voting.

Given the threat posed by the imposition of the market model to democracy itself, Sekera's primary objective is to develop a comprehensive theory of the public, non-market economy. Through a series of compelling case studies, she challenges some of the prevailing myths perpetuated by possessive individualism. These case studies offer empirical evidence to refute the notion that markets allocate resources efficiently while the public sector lags behind. Sekera dismantles the myth of market superiority by presenting an extensive critique of privatization.
  • Myth: Markets allocate resources efficiently.
  • Reality: Public sector initiatives can be more effective in meeting societal needs.
  • Myth: Privatization leads to cost savings and improved services.
  • Reality: Contractors are often no more efficient or cost-effective than government employees.
  • Myth: Government involvement crowds out private sector activity.
  • Reality: Government participation can stimulate private sector innovation and growth.
In the United States, where public ownership is limited, privatization often manifests as contracting out. However, Sekera presents compelling data demonstrating that contractors are often no more efficient or cost-effective than government employees. Rather than embracing the right-wing theoretical notion of crowding-out, she asserts that government participation actually leads to crowding-in, stimulating innovation and economic activity. Drawing upon the work of Karl Polanyi, Sekera argues that government and society precede the market, laying the foundation for its existence. Publicly funded research and development, along with the provision of large-scale infrastructure, create opportunities for profit that would not exist in the absence of the state sector. While the accomplishments of government may often go unnoticed, Sekera contends that society would descend into chaos without its indispensable role.

Reclaiming the Public Economy: A Path Forward

In conclusion, 'The Public Economy in Crisis' serves as a valuable resource for understanding the challenges facing our public economy and the urgent need for reform. By presenting compelling case-study evidence that challenges the ideological claims of the right-wing, Sekera lays the groundwork for a more just and equitable economic system. However, this reviewer believes that Sekera could more effectively advance her goal of developing a new theory by embracing the insights of heterodox political economists regarding the theory of the state, class processes, and capital accumulation. Only by integrating these perspectives can we hope to build a truly comprehensive and transformative vision for the future of our public economy.

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