The Logical Arguments for Constitutional Democracy

1
The Logical Arguments for Constitutional Democracy

• Peter J. Boettke
• Econ 828/Fall 2005
• 17 October

2
Main Methodological Points to Emphasize

• Methodological Individualism
• Catallactic Model of Politics
• Normative Implications for a society of free men

3
Tension Between Buchanan and Tullock

• Buchanan
• More philosophical and subtle
• Subjectivism
• Men are not just rats
• Normative individualism

• Tullock
• Relies on observation to drive questions
• Homo-economicus
• Natural economist
• Normative bent is there, but not overt

4
The contribution to political philosophy and
political economy

• Social Choice Theory
• Impossibility Theorem and its Import and
  Irrelevance
• Decisions within Rules and Decisions over the
  rules
• Veil of uncertainty construction
• Costs of Decision Making
• Unanimity principle
• Externality principle
• Bargaining within Politics
• Log rolling, Pareto Improvements and Perversities
• Fiscal Structure
• Federalism and political competition (industrial
  organization of government)

5
Central Diagram of the Calculus of Consent
?Cost
Costs
Decision Making Costs
Externality Costs
of Agreement
Voting Rule
6
Buchanans Broader Contribution

• 1986 Nobel Prize for the economic theory of
  politics
• Buchanan as an Austrian and classical liberal
• Buchanan and the rebirth of political economy

7
Contract or Coordination The Contribution of
Russell Hardin

• Coercion, Exchange, Coordination
• Shared values are neither a necessary nor
  sufficient condition for coordination in a
  complex society
• Liberalism, constitutionalism and democracy work
  for us because we are coordinated enough on
  various matters. p. 17
• Conflicting nature of economic (practice in
  search of a theory) and political liberalism
  (theory in search of a practice)
• Constitutions not as contracts, but as
  coordinative institutions which enable us to
  pursue mutual advantage and realize our interests
  (from Hobbes to Hume)

http//www.nyu.edu/gsas/dept/politics/faculty/hard
in/hardin_home.html
8
Conclusion

• The Calculus of Consent established more than any
  other book the usefulness of applying economic
  concepts to address questions in political theory
  and political science
• The Calculus of Consent demonstrated that
  pursuing the logic of individual choice and the
  benefits of exchange model provided a coherent
  argument for limited government that did not rely
  on rights-speak