Does a developed market economy encourage or discourage democratic values and institutions? And to the extent that an unfettered market economy creates forces inimical to democratic values, how can these forces be most effectively -- one might even say, economically -- countered?

These are the questions addressed in this lecture, which is divided into three parts. First, I attempt to characterize the essential properties of the market economy. Then I explain how the market economy both supports in part and undermines in part the central values of a democratic society. Finally, I describe how collective action through democratic government can, in principle, temper the antidemocratic consequences of market forces. I note that, in practice, political intervention in the market often promotes one democratic value, typically equality, over both economic efficiency and another democratic value, individual freedom. I conclude by suggesting how public intervention in markets might be structured to achieve greater equality or other democratically determined objectives at minimal sacrifice of economic efficiency or freedom.