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Democratic governments with constitutionally limited powers also act as if ideas have consequences. Every piece of legislation, without exception, is trumpeted as promoting the public interest. Even statutes and regulations clearly aimed at helping only special-interest groups are packaged and presented to the public as vital measures for improving the condition of the overall society.

Consider, for example, farm subsidies that are driven by the disproportionate political power of agricultural lobbies. No politician ever says, “I voted for these subsidies because farmers are politically powerful and the consumers and taxpayers who foot the bill are not.” If George Stigler were correct that government policies are driven only by special-interest groups—and therefore that the ideas that people have about the “rightness” or “wrongness” of policies are irrelevant—then governments wouldn’t bother to portray farm subsidies and the creation of other special-interest-group privileges as being in the public interest. The very dishonesty and duplicity that is so common in the pronouncements of all governments, today and in the past, testify to the power of ideas.

There can be no doubt that ideas have consequences.

Ideas about the appropriate role of government determine what government will attempt to do as well as what it must refrain from doing. And ideas about the appropriate role of government are in turn shaped by ideas about the way free markets work and about the justice or injustice of market processes and outcomes. No society, for example, will follow a policy of free trade if a dominant idea in that society is that trade with foreigners is evil or economically harmful. In contrast, no society will tolerate high tariffs and other protectionist measures if a dominant idea in that society is that restrictions on trade are ethically unacceptable and that free international trade is always economically beneficial.

Getting ideas “right”—and spreading those right ideas as widely as possible—is therefore of the highest importance. Widely held mistaken ideas about markets and government will inevitably produce economically damaging policies, while correct ideas about markets and government will foster economically beneficial policies.

But how are ideas produced, spread, and nurtured? How are today’s dominant ideas altered or replaced with other ideas? Families, churches, clubs, popular media, and (of course) schools all play a role. So, too, do public intellectuals—that is, newspaper and magazine columnists, bloggers, television and radio pundits, and book authors. Public intellectuals speak not only, or not even mainly, to other intellectuals; they speak chiefly to the general public. Being skilled specialists in communicating serious ideas to broad audiences, public intellectuals are the central participants in the process of distilling academic ideas into the language and forms that make those ideas accessible to the general public. Public intellectuals, as such, do not do original research or create new ideas. Instead, they report research findings and transmit academic ideas to people outside of the universities and think tanks.

Widely held ideas, then, about the operation of markets and about the promise or perils of government intervention have two main “producers”: the scholars, researchers, and academics who generate these ideas, and the public intellectuals who transmit these ideas to wide audiences. If the general public in modern society is to hold improved ideas about markets and politics, both academics and public intellectuals must contribute to this betterment.

With the possible exception of history, no intellectual discipline plays as large a role in affecting the public’s ideas about markets and politics than does economics. John Maynard Keynes astutely observed in 1936 that “[t]he ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”

Original research and theorizing today, of course, affects almost nothing today. The ideas of professional economists must first be distilled and spread by public intellectuals, and this process takes time. A prime example is Adam Smith’s scholarly case for free trade. When Smith first published his case for free trade in his monumental 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, protectionist policies were well entrenched in Great Britain. These policies were so well entrenched that Smith thought it ludicrous to suppose that they would ever be discarded in favour of a policy of unilateral free trade. Yet on this matter Smith was wrong. Britain adopted a policy of free trade 70 years after Smith’s ideas were first published.