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Politics by Principle, Not Interest: Towards Nondiscriminatory Democracy
In his treatise, The Constitution of Liberty (1960), F. A. Hayek emphasized the central role of the generality principle, as embodied in the rule of law, for the maintenance of a free society. This book extends Hayek's argument by applying the generality principle to politics. Several important policy implications emerge. There are no direct implications to suggest how much governments should do. The argument suggests strongly however, that, whatever is done politically, must be done generally rather than discriminatorily.
190 pages, Hardcover
First published April 28, 1998
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About the author
James M. Buchanan
123 books66 followersAmerican economist known for his work on public choice theory, for which in 1986 he received the Nobel Memorial Prize. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy. He was a Member of the Board of Advisors of The Independent Institute, a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University.
Buchanan was the founder of a new Virginia school of political economy. He taught at the University of Virginia—where he founded the Thomas Jefferson Center for the Protection of Free Expression—UCLA, Florida State University, the University of Tennessee, and the Virginia Polytechnic Institute, where he founded the Center for the Study of Public Choice (CSPC). In 1983 a conflict with Economics Department head Daniel M. Orr came to a head and Buchanan took the CSPC to its new home at George Mason University. In 1988 Buchanan returned to Hawaii for the first time since the War and gave a series of lectures later published by the University Press. In 2001 Buchanan received an honorary doctoral degree from Universidad Francisco Marroquín, in Guatemala City, Guatemala, for his contribution to economics.
Buchanan was the founder of a new Virginia school of political economy. He taught at the University of Virginia—where he founded the Thomas Jefferson Center for the Protection of Free Expression—UCLA, Florida State University, the University of Tennessee, and the Virginia Polytechnic Institute, where he founded the Center for the Study of Public Choice (CSPC). In 1983 a conflict with Economics Department head Daniel M. Orr came to a head and Buchanan took the CSPC to its new home at George Mason University. In 1988 Buchanan returned to Hawaii for the first time since the War and gave a series of lectures later published by the University Press. In 2001 Buchanan received an honorary doctoral degree from Universidad Francisco Marroquín, in Guatemala City, Guatemala, for his contribution to economics.
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October 13, 2016
This book explores the application of the "generality principle" into questions of political economy.
According to this principle, which has its origins in Hayek and the "rule of law" theorists, laws should be so designed as to treat people the same, irrespective of differences. Such a principle, while often ambiguous in practice, could make our contemporary societies saner, if adhered to in the design of our policies and programs. This principle is not one pulled out of thin air, nor a rabbit pulled out of the hat, but one based on utility calculation, where individual utility is understood to be the goal and aim of all government. The public choice perspective, which Buchanan has been championing for decades, raises doubts about the possibility of majoritarian democracy to avoid moral hazards, rent seeking and discrimination, among other potential dangers. Only if the rules within which majoritarian policies are allowed to operate (i.e. the constitutional or "social contract" framework) are firmly set in place, is there any hope of maximizing social utility for all. Hence the authors' emphasis on constitutional limits, super-majority rules and fixed, general rules.
According to the Preface, Buchanan wrote most of this book. Congleton was clearly a worthy co-author/co-inspirer, however, since the breadth of the discussion is quite impressive. This is not Buchanan's most original book, since most of the fundamental ideas have germinated elsewhere; but the application of these principles to public policy, especially the problems of taxation and redistribution, gains deserved scrutiny here, and in so doing, posits a compelling framework.
Most interesting, for me, were the discussions of the application of the generality principle in the tax-and-redistribution system - the two sides of the fiscal account of the public sector - in the form of the wonderfully simple double proposal of a "flat-tax and equal-demogrant" system. This means two things: 1) Tax all incomes, from whatever source, at an equivalent marginal (and hopefully average) tax rate, rather than the current patchwork-like tax code full of loopholes and exceptions, tailored to regulatory capture. 2) If the welfare state is to be viable, redistribute benefits to ALL citizens, in the form of a universal basic income guarantee (what he calls "demogrant"), rather than targeted benefits to targeted groups. Such a system, the authors argue, convincingly enough, would be relatively immune to rent seeking and other public choice hazards.
The book also discussed the game theoretical and constitutional foundations of such a system, and how it may be applied e.g. in the distribution of social insurance, public goods and social lotteries. The wide variety of issues at stake seems to call for many principles, but the big claim of the book is that the constitutitonal framework of the society should restrict itself by self-imposed limits.
The application of "generality" requires adherence to limits that might seem too strict for most polities; the need for deviation thus generates a preference for decentralization and federalism.
Overall, the book provides a framework that is somewhat underdeveloped; very abstract and general rather than concrete and feasible; and subject to manifold criticism (some of which the authors anticipate in their analysis but bracket away out of necessity). But the lure of the framework is its simplicity, honesty and fecundity. It is not "ideal theory" in the sense of pure philosophy; but it is principled. It has enormous potential to be developed further. Some of its ideas - like the flat-tax and basic income model - are ready to be applied by governments today.
And, beyond these issues, the principles can yet be applied to a host of unknown realms.
According to this principle, which has its origins in Hayek and the "rule of law" theorists, laws should be so designed as to treat people the same, irrespective of differences. Such a principle, while often ambiguous in practice, could make our contemporary societies saner, if adhered to in the design of our policies and programs. This principle is not one pulled out of thin air, nor a rabbit pulled out of the hat, but one based on utility calculation, where individual utility is understood to be the goal and aim of all government. The public choice perspective, which Buchanan has been championing for decades, raises doubts about the possibility of majoritarian democracy to avoid moral hazards, rent seeking and discrimination, among other potential dangers. Only if the rules within which majoritarian policies are allowed to operate (i.e. the constitutional or "social contract" framework) are firmly set in place, is there any hope of maximizing social utility for all. Hence the authors' emphasis on constitutional limits, super-majority rules and fixed, general rules.
According to the Preface, Buchanan wrote most of this book. Congleton was clearly a worthy co-author/co-inspirer, however, since the breadth of the discussion is quite impressive. This is not Buchanan's most original book, since most of the fundamental ideas have germinated elsewhere; but the application of these principles to public policy, especially the problems of taxation and redistribution, gains deserved scrutiny here, and in so doing, posits a compelling framework.
Most interesting, for me, were the discussions of the application of the generality principle in the tax-and-redistribution system - the two sides of the fiscal account of the public sector - in the form of the wonderfully simple double proposal of a "flat-tax and equal-demogrant" system. This means two things: 1) Tax all incomes, from whatever source, at an equivalent marginal (and hopefully average) tax rate, rather than the current patchwork-like tax code full of loopholes and exceptions, tailored to regulatory capture. 2) If the welfare state is to be viable, redistribute benefits to ALL citizens, in the form of a universal basic income guarantee (what he calls "demogrant"), rather than targeted benefits to targeted groups. Such a system, the authors argue, convincingly enough, would be relatively immune to rent seeking and other public choice hazards.
The book also discussed the game theoretical and constitutional foundations of such a system, and how it may be applied e.g. in the distribution of social insurance, public goods and social lotteries. The wide variety of issues at stake seems to call for many principles, but the big claim of the book is that the constitutitonal framework of the society should restrict itself by self-imposed limits.
The application of "generality" requires adherence to limits that might seem too strict for most polities; the need for deviation thus generates a preference for decentralization and federalism.
Overall, the book provides a framework that is somewhat underdeveloped; very abstract and general rather than concrete and feasible; and subject to manifold criticism (some of which the authors anticipate in their analysis but bracket away out of necessity). But the lure of the framework is its simplicity, honesty and fecundity. It is not "ideal theory" in the sense of pure philosophy; but it is principled. It has enormous potential to be developed further. Some of its ideas - like the flat-tax and basic income model - are ready to be applied by governments today.
And, beyond these issues, the principles can yet be applied to a host of unknown realms.
October 17, 2022
A very difficult subject to tackle, even for Buchanan. The author thread around the technicalities generated by the democratic system within a constitutional (Madisonian) republic. Taking on Anthony Downs and Dahl, Buchanan arrives at similar conclusions, but unlike Dahl for example, the economist prefers a limited decision perimeter then the innovation of polyarchy, so that coalitions against minorities are of limited use, as an example. I was not entirely convinced that it is possible to generate a non-discriminatory democracy, but the limitation on policy dimension stick with me.
Displaying 1 - 2 of 2 reviews