
| Edited and written by David Gordon, senior fellow of the Mises Institute and author of four books and thousands of essays. |
Myth Of The Voluntary State
Summer 1999
POST-SOCIALIST POLITICAL ECONOMY: SELECTED ESSAYS
James M. Buchanan
Edward Elgar, 1997, ix + 285 pgs.
Professor James Buchanan, the 1986 Nobel Laureate in Economics, has achieved fame
through public choice economics,
which he, together with Gordon Tullock, invented. According to this discipline, economic
analysis does not stop with
market participants. The state consists not of impartial arbiters, but of agents anxious to advance
their own interests.
Professor Buchanan applies his insight into politics to great effect in one area of American
politics. Unfortunately, he fails
to develop this insight, and several others almost as important, to the fullest extent possible.
If politicians avidly pursue their own interests, what are the rest of us to do about this? One
response, that of libertarian
anarchists such as Murray Rothbard, suggests getting rid of the state altogether; but this is
entirely too radical for the public
choice school. Rather, it suggests that the malign effects of self-seeking politicians can be
considerably alleviated through a
federal system.
If political power is decentralized into small units, and a country's citizens enjoy the right to
move freely among these units,
then competition limits governmental abuses. If, for example, a state imposes high taxes on
corporations in its jurisdiction,
they will flee to more congenial climates.
All this is hardly news, but Professor Buchanan applies the federalist point in a way that
illuminates a crucial period in
American history. He writes: "We know now that the Madisonian enterprise [of federalism and
limited government] failed.
The great American Civil War removed forever the threat of secession by the states. This basic
constitutional change more
or less insured that, eventually, the United States would be transformed into a centralized
majoritarian democracy with few,
if any, checks on ultimate political authority. In this modern setting, democracy dominates
society" (p. 220).
Well said! But if one adopts this perspective, will not the Rothbardian position soon follow
as a reasonable extension? If
states may secede from the Union, why may not individuals secede from the state? I do not
suggest that there is a logical
contradiction in defending state secession but rejecting an individual's right to secede. But does
not the same reasoning that
sees secession as a deterrent to oppression by the central government also suggest that the right
of individual secession
limits the power of the states to do bad? If not, why not?
And if individuals may secede, have we not in effect arrived at a Rothbardian position, in
which individuals do not
surrender their natural rights to a state at all? But this view Buchanan rejects as extreme. Or does
he?
In one brilliant essay, he seems to transcend his customary perspective of "constitutional
political economy." He speaks
favorably of self-ownership, the key theme of Rothbard and his followers. "We can refer to
private ownership in person, in
the individual's own capacities to produce economic value. Such property-in-person exists when
the individual is at liberty
to choose when to submit to the direction of others concerning the use of his or her own labor
services and when there
exists also freedom to choose among locations, occupations, and professions, both as offered by
the market and as
potentially created by the individual's own entrepreneurial initiative" (p. 193).
Our author, I fear, is no master of English prose, but it is the thought that counts. He takes
the second crucial Rothbardian
step also, as the passage just quoted suggests. He recognizes that individual self-owners may
acquire rights to property.
These rights are valued by the individuals as a means of enhancing liberty. Unlike Chicago
school economists, Professor
Buchanan does not view property titles solely as a means to maximize efficiency. "[P]ersons
desire ownership of property in
order to secure and maintain liberty over the disposal of resources, without which liberty there
could be no hope of bettering
the conditions of life" (p. 192).
Before I go on with the line of argument Mr. Buchanan's defense of liberty and property
suggests, allow me a digression.
(After all, this is my publication.) The Canadian political philosopher C.B. Macpherson once
raised an interesting objection
to the free market. Proponents of the market, Macpherson noted, claim that individuals in a
laissez-faire economy are free to
make any exchanges they wish. All voluntary transactions, then, take place only if all
participants expect to benefit. Perhaps
so, said Macpherson, but are individuals free to leave the market altogether? How many people
can become fully
self-subsistent farmers? And if you are not free to exit the market, is your freedom to exchange
as significant as advocates
of capitalism think?
Professor Buchanan does not mention Macpherson, but several of his remarks enable us to
construct a reply to the
objection. He points out that ownership of long-term assets reduces direct dependence on the
market. "Consider ownership
of a house. As the owner of this asset that yields services over time, the individual is producing
these particular services for
himself or herself. To the extent that self-production is made possible, the owner is insulated
from direct dependence on the
market" (p.194). Macpherson failed to see that exit from the market need not be total. The force
of his objection to the
market is thus blunted.
But this is by the way. Although Professor Buchanan travels a good deal down the road with
Rothbard, he stops short. He
rejects complete laissez-faire because of that dread specter--public goods. As our author sees
matters, individuals must be
coerced, in some cases, to do what they themselves recognize as in their own collective
interest.
An example will clarify what Professor Buchanan means. If I hire a policeman to protect my
house, his presence also helps
you, if you are my neighbor. Prospective burglars who see him will probably avoid your house as
well as mine. An
externality results: any neoclassical theorist worth his salt can readily show that the market
outcome is "inefficient."
Is there not available an easy escape? Why not an agreement by the concerned individuals to
produce the public good--in
our example, protection--at the optimal amount? Unfortunately, matters are not so simple.
Individuals who make such an
agreement might find it rational to break their word. If I can get a public good without paying for
it, will I not be better off
than I would be if I had paid the share agreed upon? Unfortunately for me, everyone else is in the
same position. Since each
of us foresees that it will be rational for each of us to renege on an agreement to produce a public
good, no such agreement
will be made in the first place. The result will be, horribile dictu, a nonoptimal supply of public
goods.
Here, in Mr. Buchanan's view, the state comes to the rescue. By forcing people to adhere to
their agreements, public goods
are produced in amounts most beneficial to all. Optimality is at hand: all is for the best in this
best of all possible worlds.
What is one to make of this? Arguably, self-owners in Rothbard's sense can voluntarily agree
to establish an agency to
compel them to observe an agreement. But unless someone actually joins in such an
arrangement, force against him cannot
be justified. To claim that he would have entered into an agreement, had he been rational, does
not suffice. Nor does it
suffice if the majority of people in someone's society accept an arrangement: so long as a person
has not explicitly
consented, an attempt to compel him to contribute to a public good violates his rights.
So, at any rate, a consistent supporter of self-ownership will argue. The upshot, of course, is
that no actually existing state
respects people's rights, since there has never been the explicit agreement oncoercion that
self-ownership mandates.
Professor Buchanan, I regret to say, wants to have it both ways. Even though he recognizes
that in existing states, there has
been no actual agreement by everyone to use the state as a coercive agent, he nevertheless retains
the agreement or exchange
model. "At this point, those who defend contractual or exchange models find it useful to
introduce conceptual as opposed to
actual agreement as a device for retaining some explanatory value.... Could the existing rules that
define the overall
operations of the polity have been agreed upon by all citizens if, indeed, there could have been
some imagined initial
dialogue? At this point, the potential conflict among the separate interests of persons and groups
is mitigated by resort to
constructions that introduce a veil of ignorance or uncertainty" (p. 176).
To his credit, Professor Buchanan recognizes that hypothetical consent poses problems, and
he also finds attractive a
Hobbesian view of the state as a predatory agency. Yet at the end he refuses to abandon the
"exchange" model; and he is left
with the nonsense-concept of a state that is coercive but nevertheless voluntary.
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