Browse > Home / Uncategorized / James M. Buchanan (1919- ) and Gordon Tullock (1922- ). The Calculus of Consent: Logical Foundations of Constitutional Democracy (1962)

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James M. Buchanan (1919- ) and Gordon Tullock (1922- ). The Calculus of Consent: Logical Foundations of Constitutional Democracy (1962)

July 26th, 2011 Posted in Uncategorized by

The Calculus of Consent was published two years after Friedrich Hayek  published The Constitution of Liberty. Buchanan and Tullock should be  placed with Hayek and Friedman in the revival of classical liberal ideas of  individual liberty, free markets, and limited government.  It’s not likely that  any books by Buchanan and Tullock will ever be as widely read as  Hayek’s The Road to Serfdom or even the rather longer book, The  Constitution of Liberty.  Buchanan and Tullock write with great intellectual  elegance, but not with elegance of style, or humour of any kind.  It has to be  said that even Nozick’s Anarchy, State and Utopia, which is very  philosophically demanding, is nevertheless more witty and stylish.    However, it would be a great loss for Buchanan and Tullock to be left purely  to the attentions of those concerned with the more formalised aspects of economics and political science.  They use a minimum of formalism, and can be read by those who lack their own mathematical abilities.  Their arguments are clear even if dry.

Buchanan got his doctorate in economics at Chicago, while Tullock got his doctorate in law at Chicago.  This indicates the strength of law and economics at Chicago, as well as of those disciplines taken separately.  The Chicago economics faculty is well known as a centre of free market influenced thinking, and both appropriately ended up at George Mason University in Virginia, a great centre of classical liberalism and libertarianism in economics, and related field.  Tullock was a law professor there, but his work is clearly important in economics.  Both read Human Action, Ludwig von Mises’ main treatise on economics, at an early stage, and were deeply impressed, without becoming fully associated with, Austrian Economics.  Both taught at the University of Virginia and Virginia Polytechnic University before transferring to GMU, and therefore their position is often referred to as Virginia Public Choice Theory.  Though their work is often taken together, The Calculus of Consent is an unusual example of joint authorship.  Buchanan received a Nobel Prize in Economics in 1986, it is surely something of an injustice that it was not a joint award including Tullock, or that Tullock has not received the prize in his own right since.  For example, it is Tullock who developed the concept of ‘rent seeking’, that is the use of the political process to receive non-market economic rewards.

In Calculus of Consent, Buchanan and Tullock, admit to lack of expertise in political theory,  but do refer to Wilhelm von Humboldt’s classic of eighteenth-century liberalism, The Limits of State Action.  They see in it a clear example of the distinction between public goods and private goods.  Humboldt restricts public goods (which he refers to as negative welfare) to law and order and national defence.  Buchanan and Tullock find this too restrictive in its understanding of public good, but share the idea that it is important to establish a distinction.  Buchanan and Tullock do not draw such a clear line as Humboldt does.  They establish a way of thinking about where to draw the line which depends on context and a dynamic relation between changeable factors.  Collective decision making about state provided goods need to be less inclusive of a large proportion of the population, that is rest on a level of consent of more than a bare majority, where the population tends to think in universalist rather than sectional terms, that is pays relatively more attention to public goods than private interest.  It is not possible to achieve complete virtue in that areas, and undesirable to try since private self-interest is necessary to motivate human behaviour.  A  more universalist thinking population makes state provision of public goods more acceptable, though still strictly limited because the collective action required rests less on a coalition of self-interest, which has negative impacts on those in the minority.  Issues of self-interested coalition building through exchanging benefits from collective action mean that there is always a limit to how much good can be achieved by collective action, and too much collective action undermines incentives necessary to the economy.

What Buchanan and Tullock are proposing is in part an economic analysis  of politics, and they aim to create some common ground between economics and political science.  As with the private economy, there are imperfect markets in political decision making.  In politics that arises through the possibility of building winning coalitions, and which make decisions at the expense of the minority, the process which is then repeated leads to everyone enduring a growing burden of costs for collective action of a kind which creates privileged exemptions from economic forces, rather than genuinely universal benefits.  Increased collective action, even if justified by the aim of assisting the poor, tends to harm the poor by transferring resources to those who are part of winning political coalitions.

Largeness of size of the area over which collective decision making is exercised is another factor that tends to lead to more bad decision making, and therefore requires more unanimity, that is inclusiveness before action is taken.  This does not mean that states should be broken up into micro-communities, because spill over effects of decision between localities makes makes effective decision making impossible.  The decision making community has to reach a certain size to allow for spill overs between actions in different  localities.  The problems of collective decision making can also be ameliorated by two chamber national assemblies and veto powers of the head of state, or some equivalent form of separation of constitutional powers.  That is because such measures make it less easy to engage in collective actions, without a level of consent approaching the ideal of unanimity.  For Buchanan and Tullock, it is a basic goal to extend economic discussions of individual action into the constitutional sphere, so that the constitution itself will have the best possible rules for decision making in areas with economic impact.

 

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