Even by New York standards, the recent remarks from the city’s economic development guru are something special. “There is an inherent conflict between someone who is market-driven and the city’s interests, which should be rationally discussed,” the deputy mayor for economic development and rebuilding, Daniel Doctoroff, told our Alec Magnet for yesterday’s paper. Mr. Doctoroff apparently meant to offer a more genteel reprise of Mayor Bloomberg’s earlier comments, reported in the Daily News, that the city would be better off if developer Larry Silverstein were to lay off his efforts to build in Lower Manhattan.

We asked Mr. Doctoroff yesterday what he meant by an “inherent conflict.” His example: The administration argues that it’s “critical” to establish permanent retail along Greenwich and Church Streets as soon as possible but that a market-driven developer would resist building such retail space before finding a commercial tenant for the office space above because constructing the retail area too early would make it more difficult to design an office tower to a major tenant’s specifications later on. Despite that, the city is “willing to sacrifice some flexibility in terms of type of tenant” to get the retail going now.

Well, is the city really the most “rational” choice to make the call? Consider first the way government agencies themselves looked out for the “city’s interests” at ground zero. The Lower Manhattan Development Corporation first introduced New Yorkers to the controversial proposal for an International Freedom Center on the site. It eventually fizzled when critics started asking awkward questions about whether the center was in the public’s interest.

The mayor and Mr. Doctoroff meantime were pursuing an abortive effort to spend $600 million of city money on a stadium for the Jets and the Olympics that many argued wasn’t in taxpayers’ interest. Don’t forget the arguments over whose interests were served by the $800 million in lower Manhattan development projects announced in the run-up to Speaker Sheldon Silver’s vote on the stadium project.

Back in 2003,as part of the West Side redevelopment plan, the administration proposed building a total of 24 million square feet of office space in the neighborhood of the Jets stadium-that-might-have-been. And in April of 2001, Mr. Bloomberg’s predecessor had decided it was in the city’s interest to get out of the real estate business, which is how the Port Authority came to sign a 99-year lease with Mr. Silverstein for the World Trade Center.

No one is suggesting that the mayor and Mr. Doctoroff don’t have the city’s best interest at heart. It’s just hard for them, or for any other politicians, to know what that interest is, at least in respect of real estate development. A classic example is the World Trade Center itself, as a City Journal editor, Steven Malanga, told us yesterday. After the Port Authority built the twin towers, it took decades – and a fortuitous economic boom in the 1990s – for the complex to become a true success.

Perhaps more office space is just what lower Manhattan needs. Or perhaps New Yorkers would be better off with a mix of retail and residential construction. Perhaps the construction should happen now, and perhaps later. The key question now is who should decide. Given its successful track record gauging what people need, we vote for the private sector and its markets, which involve hundreds of thousands, even millions of minds, that, when given the freedom and incentive to work together, can outsmart even the best of our politicians.