The economic model according to which markets are self-equilibrating rests on a world-view of harmony and stasis that goes back to classical China, and was already fully rejected in all domains of science and also in political economy in the 19th century. Somehow it survives in textbook economics to this day. A new public administration needs to rest on modern scientific habits, recognizing that all biological, mechanical and social systems require effective regulation, not to “reduce externalities” but because otherwise they cannot exist at all. Once this is recognized, the task of government is to make regulation and public provision of services work well, minimizing predation, parasitism, force and fraud.
