James Buchanan and Gordon Tullock’s The Calculus of Consent—published over sixty years ago in 1962—has been one of the most influential books that apply economic ideas to politics. The authors were by no means libertarians, but they favored, for the most part, a limited state and the free market. An additional point in their favor was that both authors read my book reviews. In this week’s column, I’m going to discuss some points of interest in the book, some of which haven’t gotten as much attention as they deserve.
The authors are strong supporters of methodological individualism, and they cite Ludwig von Mises’s Human Action in defense of this view. Actions must always be traced back to individual decisions, and they reject “organic” conceptions of the state that see the state as acting independently of individuals.
So much is well-known, but one issue that has not aroused sufficient notice is their use of methodological individualism to criticize Marx’s theory of history. Marx sees classes as groups that act as whole entities and fails to show how individuals are motivated to act in accord with their supposed class interests. They blame the historian Charles A. Beard for his use of Marx’s theory in interpreting American history. A more realistic view, they suggest, would see individuals who belong to different Marxist classes as allied to achieve favors from the government. They put the issue in this way:
The point that has been largely overlooked is that it remains perfectly appropriate to assume that men are motivated by utility considerations while rejecting the economic determinism implicit in the whole Marxist stream of thought. Differences in utility functions stem from differences in taste as much as anything else. The class status of the individual in the production process is one of the less important determinants of genuine economic interest. The phenomenon of textile unions and textile firms combining to bring political pressure for the prohibition of Japanese imports is much more familiar in the current American scene than any general across the board political activity of labor, capital, or land interests.
Let’s turn to another subject that has aroused a great deal of controversy. Does support for the free market entail support for open borders? Buchanan and Tulloch don’t think so. They say that it will tend to result in conflicts among people and make agreement on common projects more difficult. For the same reason, it’s better to have a small state than a large one. They say about this:
It seems reasonable to expect that more will be invested in bargaining in a group composed of members who have distinctly different external characteristics than in a group composed of roughly homogeneous members. Increased uncertainty about the tastes and the bargaining skills of his fellows will lead the individual to be more stubborn in his own efforts. When he knows his fellows better, the individual will be less stubborn in his bargaining, and for perfectly rational reasons. The over-all costs of decision-making will be lower, given any collective-choice rule, in communities characterized by a reasonably homogeneous population than in those characterized by a heterogeneous population.
I have stressed so far subjects in which the authors arrive at conclusions that Rothbardians will like. But there are some subjects that go decidedly the other way. Buchanan and Tulloch are moral skeptics (i.e., they don’t believe that the rules of morality are objectively true). Individuals attracted to views like natural law that accept objective morality can use these views in constructing a personal morality, but they have no place in politics. Rothbardians, to the contrary, hold that the ethics delimiting a proper legal system are the part of objective morality that addresses the permissible use of force.
Buchanan and Tulloch say in this connection that “it should not be surprising that the most ‘sympathetic’ or ‘congenial’ works are to be found among the ‘realists’ in the history of political doctrine. Initially we look to Glaucon in Plato’s Republic, to Thomas Hobbes, and to Benedict Spinoza.”
Although they recognize that individuals may be influenced by moral ideals, they in general think that people—both in economics and politics—aim to make as much money as they can. People guided by morality—whom they often call “Kantians”—will tend to be taken advantage of by their less scrupulous fellow members of society and, reluctant to be “suckers,” they will compromise their ideals. Everything has its price, including morality.
This view leads to what is both a strength and a weakness of their conception of politics. People in the government do not aim for power over others for its own sake, but rather see political office as a way to acquire money. This is a strength because it leads them to a skeptical view of politicians: they are not “public servants,” eager to pursue the “common good,” but no better than anyone else. But it is also a weakness because they think that politicians are no worse than other people. The historical record is clear that they are much worse.
I don’t want to conclude on a negative note. Although they accept the notion of “public goods,” rather than reject it root-and-branch in the style of Rothbard, they at least recognize that these goods don’t have to be supplied by the state. Often, individuals can voluntarily supply the good themselves and, in such cases, people will frequently prefer the private arrangement to state provision. Unfortunately, they don’t think this is always the rational course of action, but at least it’s better than nothing.
