Abstract
Clark and Lee consider the impact of The Calculus of Consent and public choice more generally. There is no doubt that Buchanan and Tullock made an important contribution to the economic and political science literature in their classic book. But our attempt to examine its impact on economic education, scholarship, and the political process leads to mixed conclusions. Public choice has had less impact on the teaching of basic economics than one might think. Though mentioned in almost all economic principle texts, it is done mostly in passing, with a primary contribution of The Calculus of Consent, systematic government failure, largely ignored. While market failure is prominently discussed, government failure receives almost no consideration, if it receives any at all. The Calculus has received a large number of scholarly citations and spawned a remarkable amount of research by some impressive economists and political scientists. But this research has not spread as widely through the academy as one would have predicted, given the interest people have in government and politics. And new fields in economics have developed with almost no consideration of public choice despite its relevance to those fields, with behavior economics being the example discussed. It is also difficult to detect any change in the political process that could be seen as the result of public choice. This is not surprising given the large number of factors that impact on politics and the fact that much of Buchanan’s and Tullock’s classic work suggests that it will not have much, if any, impact on how political decisions are made. We conclude our chapter, however, by arguing that political process is subject to long-run influences that can improve the political process, and, if this happens, The Calculus of Consent and the public choice scholarship that followed will deserve some of the credit.
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Notes
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We recognize that this impression may be biased by the fact that it is the writings and presentations of economists at the more prestigious universities that we, and other economists, are more likely to encounter. So even if the neglect of public choice were evenly spread over all economic departments (and the influence of economists at the elite universities on the rest of the profession certainly pushes in that direction), it could easily appear that it is concentrated in the most highly regarded universities.
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Ariely (2008, p. 48) is more explicit than most in recommending that government step in to correct market failures due to irrationality. He states that “[i]f we cannot rely on the market forces of supply and demand to set optimal market prices, and … help us maximize our utility, then we may need to look elsewhere. This is especially the case with society’s essentials, such as health care, medicine, water, electricity, education, and other critical resources. If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government (we hope a reasonable and thoughtful government) must play a larger role in regulating some market activities, even if this limits free enterprise.”
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Thaler and Sunstein (2008, Chap. 17) consider some objections to using behavioral economics findings to nudge (with government often doing the nudging) decisions in more rational directions, with some of these objections being based on concerns that government decisions are likely to make things worse instead of better. Their response focuses on the argument that government will do something about the problems they discuss, and it makes sense to offer good advice. No mention is made of the case for constitutional limits on government as a way of preventing government action that does more harm than good.
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Buchanan (2007, p. 81).
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Buchanan (2007, p. 106).
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This section will draw on a more complete argument made in Clark and Lee (2011).
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See Office of Management and Budget (2012, Table 3.1, p. 47). Keep in mind that much of the federal government transfers of income and wealth are not recorded in the federal budget. It cost very little to enforce federal regulations and import restrictions that protect some industries from competition. Yet these regulations and restrictions transfer large amounts from consumers and potential competitors to those being protected. Furthermore, the federal transfers that are found in the budget will soon accelerate rapidly since the baby boomers have just begun to become eligible for Social Security and Medicare.
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Voting is a good way to achieve a sense of moral virtue at low cost. But this does not always result in people voting against their narrow interest since people have a natural talent for convincing themselves that government policies that are good for them (e.g., high pay for teachers if you are a teacher) are essential for promoting the general interest (e.g., improving the education of our children).
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A similar observation is made on p. 38 in The Calculus.
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If the probability that a vote will determine the outcome of an election is 1 in a million (which is on the high side of a reasonable estimate of the probability in most state or federal elections), then the voter who realizes a penny’s worth of ideological satisfaction from voting for a policy that will cost him $10,000 if it passes will be indifferent between voting yes or no. In other words, political ideology is a million times more influential than financial interest in the voting booth.
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Clark, J.R., Lee, D.R. (2013). The Impact of The Calculus of Consent . In: Lee, D. (eds) Public Choice, Past and Present. Studies in Public Choice, vol 28. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-5909-5_1
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