I was reminded of this when I was reading Akerlof's "Market for Lemons" paper again recently to help out with a paper on information economics that I'm reviewing. Akerlof writes this at the very beginning, after outlining the basic idea of his model:
"It should be perceived that in these markets social and private returns differ, and therefore, in some cases, government intervention may increase the welfare of all parties. Or private institutions may arise to take advantage of the potential increase in welfare which can accrue to all parties. By nature, however, these institutions are nonatomistic, and therefore concentrations of power - with ill consequence of their own - can develop."
A lot of the time, public choice theorist types want to tell you what you think before you start arguing with them, and they want to imply that you don't realize the problems associated with government failure, you don't realize the potential for the emergence of private collective institutions, and you think that government intervention is the response to every market failure. I am increasingly tiring of even engaging with someone that takes this approach to me. I think the origins of this approach are an underlying ideological position that doesn't want to say "OK, both of us agree on the potential for government failure and the prospect of private collective action, so let's think through when the market, private collective institutions, and public collective institutions are best suited for the job." They don't want to have that conversation because they want to be able to pin you as always opposing the first two, and they want to be able to always oppose the third option. I don't like corner solutions, I'm willing to consider some mix of all three, and I am not especially impressed with someone that tries to frame me as seeing it any other way.