This study applies the developing theory of the public interest to Australian competition policies from 1900 to 1974. Public policies may be considered to provide public goods to various groups. Determining the "public interest" therefore involves political weighing of the collective goods and bads provided by competition and monopoly to the nation as a whole and to groups within it. As the interests of consumer groups and efficiency in resource allocation are among the set of objectives of government policy they are given some weight in policy design and implementation, but the public interest is unlikely to be conceived solely in terms of these two objectives, as Paretian welfare economics assumes.
Examination of Australian competition policies reveals that governments and the courts have consistently rejected a consumer welfare standard of the public interest in favour of a standard giving more weight to producers (labour as well as capital) and government, and have given substantial weight to goals other than efficiency, particularly fairness, stability and employment, and macro-economic management.
The study concludes from this that policies which provide collective bads to significant groups of producers are unlikely to be implemented in Australia. Furthermore, the provision of collective goods to consumers is neither a necessary nor a sufficient condition for market intervention in Australia. Economists may have a greater chance of influencing public policy if they recognise that simple consumer welfare standards of the public interest are not sufficient, and expand their analyses of policy proposals to include the effects on a range of objectives and groups in the community.