Markets, votes, and The Calculus of Consent

Abstract

Like many others, I have had the privilege of having been both a student and a colleague of James M. Buchanan and Gordon Tullock. Unlike most of the others, my role as student/colleague did not follow the usual sequence, having joined a PhD program in economics, while I was a tenured Associate Professor at George Mason Law School.1 Most students become aware of the greatness of their teachers while (or after) taking their classes. In my case, the greatness of James Buchanan and Gordon Tullock preceded them, through their path-breaking book, The Calculus of Consent: Logical Foundations of Constitutional Democracy. Their book has changed the paths of scholarship in many fields of research and has changed the way of thinking of many scholars, including my own. Prior to reading The Calculus of Consent, my academic perspective on democratic decision-making was hanging on a string between the two opposing views of Chicago scholars and their belief in the efficiency of political markets, and the less optimistic perspective of social choice theorists. Politics-like-markets metaphors formed an established foundation of much of the early work of the Chicago school of political economy.2 The thrust of this foundational hypothesis is that political markets are generally clearing, at least in the sense that, in equilibrium, no individual or group can improve his wealth (or utility) without reducing the wealth (or utility) of at least one other individual. The lessons of social choice theory