This book, a treatise on markets and governments, is presented as a text on public finance and public policy. The exposition incorporates concepts of public choice and political economy (which are, in large part, equivalent), as well as concepts and evidence from behavioral economics. Elements of moral philosophy are present, beginning with Adam Smith's description of virtue through personal behavior in markets and how perceptions of human nature affect views on the need for government. The book covers the basic topics of a course in public finance or public economics, or a course in the political economy of markets and governments.

The focus of the book is the achievement, whether through markets or the public finance and public policy of governments, of the social objectives of efficiency and social justice. There are objective criteria for efficiency. Social justice can be defined in different ways, as the natural right of possession, equality of opportunity, or ex-post equality of incomes after redistribution. Ideology can influence choice of the definition of social justice.

The book describes feasible policies. In particular, governments do not use lump-sum taxes. From the outset societies are shown to confront choices between the objectives of efficiency and equality.

This second edition retains the themes of the first edition. Although the themes are the same, the book has been rewritten and restructured. The objective retained from the first edition is to make ideas accessible. Economics can explain and enlighten.