The Calculus of Consent: A Compass for A Professional Journey
Richard E. Wagner
George Mason University
The Calculus of Consent, as well as its authors, has been with me from the start of my professional journey which began at the University of Virginia in fall 1963, as Wagner (2004) elaborates. Actually, it was The Calculus that led me to Charlottesville. The preceding year I faced a quandary in applying to graduate schools: I was attracted to the logic of economic analysis but I preferred the material of political science. In discussing my quandary with Richard Bilas, who had joined the faculty of the University of Southern California in fall 1962 from the University of Virginia, he claimed that I could satisfy both desires by going to Virginia. So I read The Calculus and realized he was right.
The correctness of that judgment was cemented my first week in Charlottesville. One of my four classes was public finance, taught by Buchanan who throughout the semester assigned a series of short essays to write, each of which was discussed the next class session. At the end of the first class session, Buchanan assigned an essay on “The Problem of Fiscal Dimension.” He elaborated this assignment by saying that he had heard that if a fly were multiplied nine times, it couldn’t fly and might even crumble under its own weight. He continued by explaining that he thought the growth of government raised some questions about fiscal dimension that we should think about. When I asked if he could clarify what he was looking for in this essay, he shot back that if he could answer that question he wouldn’t ask us to write the essay!
Unknown to me at that time, that assignment along with Buchanan’s response to my question have accompanied me throughout my academic career. What proved to be that continuing presence, moreover, was reinforced the next year when I took Tullock’s two-semester sequence titled something like “Theories of Simple and Complex Agreement.” For both Buchanan and Tullock and subsequently for me, a graduate classroom is not a forum where a professor explains the contents of what has already been published. While students are expected to read published work, the classroom itself is a forum for exploring and articulating ideas that might secure future publication. My approach to graduate instruction stems directly from the authors of The Calculus of Consent. But instruction is just a method for dealing with content. The content of my work likewise stems in significant measure from The Calculus in conjunction with my classroom experiences with its authors.
It’s not that I take topics directly from The Calculus. It’s that The Calculus reflects a scholarly orientation toward its material that recurs to me continually as I pursue my scholarly work. In reflecting on that work, I can recognize how that long ago confrontation with The Calculus and its authors established an orientation that influenced the direction I have taken toward numerous particular topics. Over the intervening 50 years, other ideas and scholarly formulations have come into play that bring forward in fresh light themes that might have been explored explicitly in The Calculus had those complementary formulations been around back then. In this brief note, I shall illustrate this point with respect to two topics that have attracted my recent attention: the non-scalability of collective processes and the injection of polycentricity into political economy.
1. Collective Action on Scale-free Networks
The problem of fiscal dimension that Buchanan raised in that first class session has resurfaced in light of my recent interest in complexity, networks, and scale-free models, ideas which are examined in Barabási (2002). For the most part, economists treat their models as scalable, whereby the difference between small and large entities is a simple matter of multiplication. There is good reason to think that market settings are scalable. The market for fresh eggs, for instance, operates in the same manner whether the size of that market contains a thousand, a million, or a billion people. Sure, with larger numbers of people we would expect to see more firms, different patterns of wholesaling and distribution, and different numbers of producers, among other points of descriptive difference. After all, the division of labor varies with the extent of the market. But we would not expect basic propositions about how free competition tends to secure the full exploitation of potential gains from trade to be affected.
This scalable property cannot be so reasonably carried over to collective phenomena within democratic settings. It is private property that makes market-based entities and relationships reasonably scalable. By becoming larger, a market-based entity might lose some competitive advantage perhaps due to difficulties associated with assembling and using distributed knowledge. If so, that entity will be reduced in size due to competition from smaller entities that are able to make better use of distributed knowledge. What compels this outcome is the operation of private property and freedom of contract and association, which means that all commercial relationships must reflect mutual attraction between willing participants.
Such scalability does not pertain directly to collective entities, due to the ability of those entities to replace the necessity of attracting business with the ability to compel business. A town of 10,000 people might have a town council of ten people. At this scale, each member of the town council would represent 1,000 people. It is reasonable for such a person to know something about most if not all of those persons. Included within that knowledge is a good deal of what is but tacitly known and which plays out all the same in the public arena. Furthermore, ten people can conduct their business pretty much informally, even if they might also operate with regularly scheduled meetings.
It is not plausible to say that a city with one million people is just a town multiplied by 100. If the city council still contains ten members, each of them will now represent 100,000 people. It is impossible to know much if anything about 100,000 people. What little that can be known, moreover, will be explicit and reducible to census-type forms; tacit knowledge will recede in significance. Only a subset of citizens will have direct access to council members, and the pattern of access will be systematic and not random: access will be the province of people who represent significant interest groups and other positions of influence. The surface view of a democratic form will conceal oligarchic modes of operation beneath the surface, as Robert Michels (1962) and Bertrand De Jouvenal (1961) explain.
The size of the city council could, of course, be increased. If the council were increased to 1,000 members, each member would represent 1,000 people, as with the town. The relationship between population and council size would be scalable in this instance, but the relationship among council members would not be scalable. A council with ten members can operate informally and make use of tacit knowledge because of the intimate knowledge they can have of one another. With a council of 1,000 members, each member will be at most a nodding acquaintance of the other members. The council will have to operate with formal rules of procedure that limit access to the agenda of deliberation, creating a different path to democratic oligarchy. As Vincent Ostrom (1987, 1997) explains, democratic oligarchy is a natural tendency of a simple republic, the avoidance of which requires some polycentric arrangement of republics, and with the logic of Ostrom’s scholarship in this respect explored in Wagner (2005).
2. Polycentricity and Political Economy
Markets and politics are both competitive processes, but they operate to different effect. Market relationships are scalable due to the voluntary nature of social relationships crafted through private property. In contrast, political relationships are not scalable outside of unanimity because compulsion gives advantage to larger over smaller entities. The Calculus advanced a principle of unanimity, under which political relationships would have been as scalable as market relationships. But The Calculus backed away from unanimity in light of arguments about the high cost of taking collective action. It is, however, unfortunate in my judgment that subsequent scholarship centered on the qualified-majority formulation of The Calculus because that enervated the rich constitutional framework with which The Calculus was wrestling.
While The Calculus gave much attention to voting rules, it did not reduce a polity to a voting rule because voting rules represented merely the visible surface of the constitutional iceberg. For a simple republic, a voting rule might provide sufficient information for rendering political outcomes intelligible because a simple republic is an organization which is susceptible to choice-theoretic theorizing, perhaps as amended by considerations explored by theories of agency. The actions of an organization can be plausibly reduced to acts of will, as reflected by the median voter treatment of majority rule.
But the American constitutional order is compound and not simple. The Calculus sought to uncover an economic logic that underpinned the complex structure of the American constitutional framework. That framework was polycentric and not monocentric. The products of polycentric polities are not reasonably reducible to some median preference—any more than it is reasonable to ascribe the mix of vegetarian and meat-based dishes served in restaurants as reflecting some median preference. Polycentric polities are orders and not organizations, and The Calculus sought to explore the market-like character of the American constitutional order, as illustrated by its forays into vote trading and bicameralism.
Votes would occur at many places within a polycentric polity, but votes stand only at the end of various parliamentary processes. The Calculus points toward entanglement as a framework for political economy, as illustrated by Wagner (2007, 2012). Jane Jacobs (1992) describes societies as characterized by interaction among carriers of commercial and guardian activities. While her distinction between commercial and guardian does not map perfectly into the distinction between markets and polities, the mapping is reasonably informative all the same. Jacobs was concerned with the problems that could arise from excessive commingling among carriers of the two types of activity. The Calculus pointed in the direction of articulating the characteristics of what could be described as an openly competitive system of political economy. Within such an openly competitive system, it could plausibly be claimed that the various boundaries between market and state, including the many entities that reside inside each of those constructions, supports a broadly liberal order of free and responsible persons.
Within the institutional logic of openly competitive systems, particular entities expand or contract depending on their ability to compete with other entities in their efforts to attract business. The Calculus explained that the founding logic of the American republic was animated by some such notion. It is also clear that the institutional framework of the American constitutional order has moved significantly in the direction of democratic oligarchy over the past century or so. The Calculus shined a bright light on the difficult problem of establishing and securing a constitution of liberty, a difficulty that has surely been intensified by the surging progressivist forces that seek relentlessly to achieve a constitution of servility through transforming a compound republic into a simple republic. The relentless quality of this progressivist challenge surely provides ample recognition that eternal vigilance is truly the price of liberty. No book and no pair of authors can be held responsible for the course of liberty within a society; all the same, The Calculus and its authors have provided splendid tools for continuing the unending quest to live within a constitution of liberty.
References
Barabási, A-L. 2002. Linked: The New Science of Networks. Cambridge, MA: Perseus.
Buchanan, J. M. and G. Tullock. 1962. The Calculus of Consent. Ann Arbor: University of Michigan Press.
De Jouvenal, B . 1961. “The Chairman’s Problem.” American Political Science Review 55: 368-72.
Jacobs, J. 1992. Systems of Survival. New York: Random House.
Michels, R. 1962. Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy. New York: Collier Books.
Ostrom, V. 1987. The Political Theory of a Compound Republic, 2nd ed. Lincoln: University of Nebraska Press.
Ostrom, V. 1997. The Meaning of Democracy and the Vulnerability of Societies: A Response to Tocqueville’s Challenge. Ann Arbor: University of Michigan Press.
Wagner, R. E. 2004. “Public Choice as an Academic Enterprise: Charlottesville, Blacksburg, and Fairfax Retrospectively Viewed.” American Journal of Economics and Sociology 63: 55-74.
Wagner, R. E. 2005. “Self-Governance, Polycentrism, and Federalism: Recurring Themes in Vincent Ostrom’s Scholarly Oeuvre.” Journal of Economic Behavior and Organization 57: 173-88.
Wagner, R. E. 2007. Fiscal Sociology and the Theory of Public Finance. Cheltanham, UK: Edward Elgar.
Wagner, R. E. 2012. Deficits, Debt, and Democracy: Wrestling with Tragedy on the Fiscal Commons. Cheltenham, UK: Edward Elgar.
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