Public Choice Under Fire

The recent publication of Duke historian Nancy MacLean's book entitled "Democracy in Chains" has caused quite a stir among economists interested in public choice and political economy. Having read several positive and negative (links to the many positive and negative reviews and commentary can be found in the updates to this post) reviews and comments on the book, it's clear to me that MacLean's thesis is something like the following: James Buchanan (Nobel Laureate in economics, 1986) along with this colleagues developed a school of economic thought (public choice) with the express intention to undermine democratic institutions in the U.S. to benefit the wealth interests that funded them. Also, as a man from the south, Buchanan was motivated by racism and based his ideas on the thought of other racist scholars.

Aside from the accusations of racism, the substantive critique made clear in the title strikes me as odd. What does it mean to put democracy "in chains?" Does making clear, in a scientific way, the limits of collective decision making put democracy "in chains" or does it allow us to determine what set of underlying institutions provides for the best set of laws?

The normative aspects of public choice are, in my mind, about the latter. The descriptive analysis of the inefficiencies in our actions as politicians, bureaucrats, lobbyists, political interest groups, voters, etc. helps us understand the characteristics of institutions that might limit such inefficiencies. We have, for instance, minority protections in the constitution precisely because a democratic majority might harm them.

MacLean insistst, for example, that libertarians long ago opposed Brown v. Board of Education. In fact, the source she cites comes to precisely the opposite conclusion. Further, Brown is a good example of a minority protection that restricts the will of the majority. If it is "unchained" majority rule that MacLean praises, she should oppose the Brown decision because it explicitly ensured that a problematic majority-rule decision was corrected.

There are, it seems, many other problems with MacLean's book, but her insistence that public choice economics is a tool for the powerful is obviously off base.

Review of Sunstein's Latest Book

by Levi Russell

I came across a review of Cass Sunstein's latest book The Ethics of Influence: Government in the Age of Behavioral Science by Michael D. Thomas in Public Choice. It's a great review that provides a succinct summary of each chapter. Since I'm often critical of Sunstein's "nudge" theory, I thought I'd share the last few paragraphs of the review. The review itself is, unfortunately, behind a paywall.

The Ethics of Influence appeals to the reader interested in the scope of government. It challenges Buchanan’s (2004) response to Warren Samuels about the “status of the status quo”. One could respond to Sunstein’s analysis by adding Buchanan’s observation that pure rent seeking results when the status quo is simply one among many possible outcomes. Another view would be that the status quo emerges tacitly over time. Here a defense of customary and common law could include writings by Hasnas (1995) on the emergence of law.

In dealing with Sunstein’s treatment of Hayek, it is important to respond not only to the explicit claims about how emergent law works, but also to his characterization of Mill’s harm principle. This is where public choice must defend the epistemic argument in Mill. The individual is not justified because he is a rational chooser, as Sunstein puts it. Instead, Mill says, “Men are not more zealous for truth than they often are for error…” (2009, p. 31). Multiple choosing groups do not preserve the truth, but the possibility for recovering lost truths. Readers might incorporate theories of discovery here, such as those developed by Kirzner (1985). Sunstein’s choice architects, on the other hand, form law through the inclusion of popular sentiment which reduces competing truth claims to one.

Since this book was published before the most recent presidential election, one wonders if such a view is weakened by the dramatic shift in popular sentiment and large changes in policy. Public choice concerns over who wields the power of this ever increasing authority gain additional profile from these recent events. The Ethics of Influence is a must read because it lays out many issues that are important for the next round of debates in public choice.