The market as a cooperative endeavour

Abstract

In my work as a normative economist, I have been deeply influenced by an idea I learned from James Buchanan in the late 1970s, and which is a central theme of his and Gordon Tullock’s Calculus of Consent. In that book, the idea is presented as a defining characteristic of an ‘economic approach’ to politics. I prefer to see it in a wider perspective, as a way of thinking about the terms on which human beings can and should engage with one another in society. For the purposes of their book, Buchanan and Tullock take it that this way of thinking is fundamental to the economic approach to economics. But my sense is that their understanding of market exchange is not quite the same as that of most economists today, or even of most economists at the time they were writing. In this essay, I try to formulate the idea and to say something about its implications for an understanding of markets. In The Calculus of Consent, Buchanan and Tullock repeatedly argue that collective choice should be understood as the many-person political equivalent of market exchange. To adopt the economic approach to politics is to treat politics as a kind of market. Here are two typical passages: