The Calculus of Dissent

Let us return to class theory. Charles Rowley, one of “Academic Deans” of Public Choice, is exploring the deep end these days. His blog is taking on “conspiratorial” tones with his detour into Obama as Manchurian Candidate. Funny, I don’t recall the strategic calculus of the “Manchurian Candidate” making it into the “Calculus of Consent.”

A short review of Public Choice.

The Virginia School of Public Choice rejects any class-dominance approach to politics. This was made clear in “The Calculus of Consent.” Buchanan and Tullock:

We shall also reject any theory or conception of the collectivity which embodies the exploitation of a ruled by a ruling class. This includes the Marxist vision, which incorporates the polity as one means through which the economically dominant group imposes its will on the downtrodden. Other theories of class domination are equally foreign to our purposes. Any conception of State activity that divides the social group into the ruling class and the oppressed class, and that regards the political process as simply a means through which this class dominance is established and then preserved, must be rejected as irrelevant for the discussion which follows.

No doubt, this rejection in part is rooted in equating such an approach with Marx. And there is good reason for rejecting the Marxist variant of class analysis. It’s wrong. The Marxist approach to politics fails because capitalism is not the root of class dominance; rather it is an end product of it. However, the shortcomings of a Marxist approach to class dominance do not invalidate class theory.

The Virginia School paradigm of Public Choice sets out to establish the microeconomic basis of the modern state. The State follows a “Protective-Productive” model. The “Protective State” is that part of the State that has a rational choice, game theorteic basis as “quarrel-quelling” agency. This is the “constitution as social contract,” a unanimous agreed upon social bargaining solution to the “Hobbes State of Nature Problem.” The second part of this model, the “Productive State,” represents the “post constitutional phase.” Here, a microeconomic analysis of agent competition in “government as market,” particularly where the rules require no unanimity, is employed. In particular, the von Neumann–Morgenstern approach to cooperative n-player games is adopted, that is: players join together to form coalitions, with the “solutions” being symmetric payoffs among the smallest effective coalitions. Buchanan and Tullock used this approach to examine majority voting coalitions, “representative” political coalitions, lobbying, etc and establish how the “productive State” evolved into the rent-seeking, “re-distributive State.”

The von Neumann–Morgenstern cooperative n-player game model–that is, where payoffs are symmetrically shared and dominant coalitions organize themselves into the smallest, effective coalitions–would seem to rule out any basis for a “dominant ruling class coalition.” Dominant coalitions are much too unstable and temporary.

Over the intervening years, the influence of Public Choice within the academic literature is undeniable. While the concept of “rent-seeking” is now denied by no one, the typical counter against a complete model of microeconomic political competition relies on either: (1) some degree of social unanimity about the ends of the “productive state” (2) some rejection of rationality

(1) is complicated by Arrow’s Theorem
(2) Bryan Caplan’s “Irrational Prejudices Topology,” e.g., suffers from an empirical problem that the “professional classes” are often more biased/dumber than the “joe six-pack voter.”

Buchanan would later opine that Public Choice was not a new insight. Rather is was just a “renaissance” of enlightenment liberal political economy. It was clearing out the intellectual folly that had overtaken economics the past century.

In my mind, (1) and (2) are not compelling critiques against Public Choice. But Public Choice, nonetheless, is vulnerable. In particular, the rational choice basis for the “Protective State” is something that can be critically examined. Buchanan, in a later work, “The Limits of Liberty: Between Anarchy and Leviathan,” would probe more deeply the rational basis for the “Social Contract,” or the “Protective State,” if you will. However, we follow the methodology of Anthony De Jasay, which more or less divorces Rational Choice from any normative political philosophy, the contractual basis of the Protective State doesn’t hold up so well. This is a point conceded by Charles Rowley.

This conceptual vulnerability is reinforced by the actual empirical failures of the “Calculus of Consent.” The empirical failure of the “Productive State” is not,as suggested by Buchanan and Tullock in CoC, an example of a coalition lobby forming to eliminate it’s subsidy; rather it would be the problem that Tullock himself would address almost 3 decades later: namely, economic rent transfers dwarfed the competitive outlays for such economic rent. In other words, the rent-seeking industry was way too small. Put yet another way: there is no actual market here, at least not one that has any microeconomic foundations.

The empirical failure of the “Protective State” is the emergence of a “secret police.” An empirical reality of a “secret police” utterly undermines Buchanan’s normative ethical argument of “Continuing Contract and the Status Quo” made in “The Limits of Liberty.” The need for a secret police tells you all you need to know about the “Status Quo.” The normative liberal “Protective State” simply cannot survive the empirical reality of the Secret Police.

A previous post, “The Matrix as Ruling Class,” examined more fully the Public Choice critique against a “Ruling Class.” My suggestion was that the Ruling Class was tied more into the “Protective State.” The Matrix as model for the Protective State hinted at the source of a dominant ruling class: the long run evolutionary equilibrium of liberalism(or any form of Statism) is totalitarianism. I think this model is more reasonable and predictive than one relying on a “Manchurian Candidate” hypothesis to explain the positive failures of normative political ideals.

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