The Calculus of Consent
Encyclopedia
The Calculus of Consent: Logical Foundations of Constitutional Democracy is a book
written by economists James M. Buchanan
and Gordon Tullock
in 1962. It is considered to be one of the classic works from the discipline of public choice in economics
and political science
. This work presents the basic principles of public choice theory
.
The analytical approach of the authors is based on methodological individualism - collective action is composed of individual actions and on the rejection of any organic interpretation of the state. A purely individualistic conception of collectivity is maintained: the state is an artefact, created by men and thus subject to change and perfection. Buchanan and Tullock maintain that only constitutional changes, which can be shown to be in the interest of all interested parties can be judged as "improvements" and therefore consider conceptual unanimity as the only legitimate decision-making rule.
The authors analyze the traditional political science approach to voting
systems, including majority voting as the standard as opposed to the unanimity
rule. They show that none of those systems are perfect, since there is always a tradeoff:
They conclude that decisions with potentially high external costs should require unanimity or at least supermajority
systems.
While many political scientists define the political process as a system in which the policy decisions are viewed as a private interest vs. public interest
struggle, Buchanan and Tullock suggest that the public interest is simply the aggregation of private decision makers.
They show that in classical political science theory, the "public interest" is always the correct choice with the same appeal to all voters, which may or may not be opposed by "special interests". But that theory ignores the fact that most choices appeal to many different "law consumers" with varying strengths. An illustrative example is a choice whether to increase funding for health care
. Some voters will strongly support or oppose it, but many may not care at all.
They compare this to a market transaction, where the voters strongly desiring better health care could purchase the acceptance of the opposition and uninterested voters with concessions, resulting in an efficient allocation of resources, increasing the happiness of all parties (Pareto optimality). However the equivalent of this in the political realm is that politicians buy the votes of other politicians (or groups of special interest) by promising to vote for their issues. In the authors' opinion such log-rolling is to be expected, but in the traditional political science theory, it is anomalous. Thus their model explains certain things that the previous models of politics could not.
Employing the theoretical concepts of game theory
and Pareto optimality, Buchanan and Tullock show that symmetry in benefits sharing may be at most a necessary, but never a sufficient condition for the attainment of a Pareto optimal position. The introduction of side payments it the crucial element, which would lead to optimality. In a sense the introduction of side payments creates marketable property rights of the individual political vote (Chapter 12).
Part II. The Realm of Social Choice
Part III. Analyses of Decision-Making Rules
Part IV. The Economics and the Ethics of Democracy
over unanimity
Book
A book is a set or collection of written, printed, illustrated, or blank sheets, made of hot lava, paper, parchment, or other materials, usually fastened together to hinge at one side. A single sheet within a book is called a leaf or leaflet, and each side of a leaf is called a page...
written by economists James M. Buchanan
James M. Buchanan
James McGill Buchanan, Jr. is an American economist known for his work on public choice theory, for which he received the 1986 Nobel Memorial Prize in Economic Sciences. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy...
and Gordon Tullock
Gordon Tullock
Gordon Tullock is an economist and retired Professor of Law and Economics at the George Mason University School of Law. He is best known for his work on public choice theory, the application of economic thinking to political issues...
in 1962. It is considered to be one of the classic works from the discipline of public choice in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
and political science
Political science
Political Science is a social science discipline concerned with the study of the state, government and politics. Aristotle defined it as the study of the state. It deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior...
. This work presents the basic principles of public choice theory
Public choice theory
In economics, public choice theory is the use of modern economic tools to study problems that traditionally are in the province of political science...
.
The analytical approach of the authors is based on methodological individualism - collective action is composed of individual actions and on the rejection of any organic interpretation of the state. A purely individualistic conception of collectivity is maintained: the state is an artefact, created by men and thus subject to change and perfection. Buchanan and Tullock maintain that only constitutional changes, which can be shown to be in the interest of all interested parties can be judged as "improvements" and therefore consider conceptual unanimity as the only legitimate decision-making rule.
The authors analyze the traditional political science approach to voting
Voting
Voting is a method for a group such as a meeting or an electorate to make a decision or express an opinion—often following discussions, debates, or election campaigns. It is often found in democracies and republics.- Reasons for voting :...
systems, including majority voting as the standard as opposed to the unanimity
Unanimity
Unanimity is agreement by all people in a given situation. When unanimous, everybody is of the same mind and acting together as one. Though unlike uniformity, it does not constitute absolute agreement. Many groups consider unanimous decisions a sign of agreement, solidarity, and unity...
rule. They show that none of those systems are perfect, since there is always a tradeoff:
- a simple majority-based system imposes varying amounts of both external costs and decision-making costs
- a unanimity-based system has little or no external costs, but considerable decision-making costs.
They conclude that decisions with potentially high external costs should require unanimity or at least supermajority
Supermajority
A supermajority or a qualified majority is a requirement for a proposal to gain a specified level or type of support which exceeds a simple majority . In some jurisdictions, for example, parliamentary procedure requires that any action that may alter the rights of the minority has a supermajority...
systems.
While many political scientists define the political process as a system in which the policy decisions are viewed as a private interest vs. public interest
Public interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
struggle, Buchanan and Tullock suggest that the public interest is simply the aggregation of private decision makers.
They show that in classical political science theory, the "public interest" is always the correct choice with the same appeal to all voters, which may or may not be opposed by "special interests". But that theory ignores the fact that most choices appeal to many different "law consumers" with varying strengths. An illustrative example is a choice whether to increase funding for health care
Health care
Health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers...
. Some voters will strongly support or oppose it, but many may not care at all.
They compare this to a market transaction, where the voters strongly desiring better health care could purchase the acceptance of the opposition and uninterested voters with concessions, resulting in an efficient allocation of resources, increasing the happiness of all parties (Pareto optimality). However the equivalent of this in the political realm is that politicians buy the votes of other politicians (or groups of special interest) by promising to vote for their issues. In the authors' opinion such log-rolling is to be expected, but in the traditional political science theory, it is anomalous. Thus their model explains certain things that the previous models of politics could not.
Employing the theoretical concepts of game theory
Game theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
and Pareto optimality, Buchanan and Tullock show that symmetry in benefits sharing may be at most a necessary, but never a sufficient condition for the attainment of a Pareto optimal position. The introduction of side payments it the crucial element, which would lead to optimality. In a sense the introduction of side payments creates marketable property rights of the individual political vote (Chapter 12).
Table of contents
Part I. The Conceptual Framework- 1. Introduction
- 2. The Individualistic PostulateMethodological individualismMethodological individualism is the theory that social phenomena can only be accurately explained by showing how they result from the intentional states that motivate the individual actors. The idea has been used to criticize historicism, structural functionalism, and the roles of social class,...
- 3. Politics and the Economic Nexus
- 4. Individual RationalityRational choice theoryRational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. It is the main theoretical paradigm in the currently-dominant school of microeconomics...
in Social Choice
Part II. The Realm of Social Choice
- 5. The Organization of Human Activity
- 6. A Generalized Economic Theory of Constitutions
- 7. The Rule of UnanimityUnanimityUnanimity is agreement by all people in a given situation. When unanimous, everybody is of the same mind and acting together as one. Though unlike uniformity, it does not constitute absolute agreement. Many groups consider unanimous decisions a sign of agreement, solidarity, and unity...
- 8. The Costs of Decision-Making
Part III. Analyses of Decision-Making Rules
- 9. The Structure of the Models
- 10. Simple Majority Voting
- 11. Simple Majority Voting and the Theory of GamesGame theoryGame theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
- 12. Majority RuleMajority ruleMajority rule is a decision rule that selects alternatives which have a majority, that is, more than half the votes. It is the binary decision rule used most often in influential decision-making bodies, including the legislatures of democratic nations...
, Game Theory, and Pareto Optimality - 13. Pareto Optimality, External Costs, and Income Redistribution
- 14. The Range and Extent of Collective actionCollective actionCollective action is the pursuit of a goal or set of goals by more than one person. It is a term which has formulations and theories in many areas of the social sciences.-In sociology:...
- 15. Qualified Majority Voting Rules, RepresentationRepresentation (politics)In politics, representation describes how some individuals stand in for others or a group of others, for a certain time period. Representation usually refers to representative democracies, where elected officials nominally speak for their constituents in the legislature...
, and the Interdependence of Constitutional Variables - 16. The Bicameral Legislature
- 17. The Orthodox Model of Majority RuleMajority ruleMajority rule is a decision rule that selects alternatives which have a majority, that is, more than half the votes. It is the binary decision rule used most often in influential decision-making bodies, including the legislatures of democratic nations...
Part IV. The Economics and the Ethics of Democracy
- 18. Democratic EthicsEthicsEthics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.Major branches of ethics include:...
and Economic Efficiency - 19. Pressure groupsAdvocacy groupAdvocacy groups use various forms of advocacy to influence public opinion and/or policy; they have played and continue to play an important part in the development of political and social systems...
, Special interests, and the Constitution - 20. The Politics of the Good Society
- Appendix 1 Marginal Notes on Reading Political PhilosophyPolitical philosophyPolitical philosophy is the study of such topics as liberty, justice, property, rights, law, and the enforcement of a legal code by authority: what they are, why they are needed, what, if anything, makes a government legitimate, what rights and freedoms it should protect and why, what form it...
- Appendix 2 Theoretical Forerunners
See also
Social Choice and Individual Values (1963), p. 120, for Arrow's defense of transitivityTransitive relation
In mathematics, a binary relation R over a set X is transitive if whenever an element a is related to an element b, and b is in turn related to an element c, then a is also related to c....
over unanimity
External links
- Ebook online at the Library of Economics and Liberty
- Scroll to chapter-preview links.