We are currently in the throes of another crazy election year, and that means we are going to hear a lot of tug-o-war arguments about the place of government in people’s lives. Most of the arguments we hear in an election will be disingenuous, as is the nature of a heated primary season. However, this also makes it a very relevant time to discuss certain economic theories about how the government, the public, and the private sector interact. Today, we’re going to look at the philosophy of public choice theory, or the study of voting, government leaders, and actual economic legislation, and how it’s relevance is still felt today...
History of public choice theory
The groundwork for public choice theory began in 1896, when economist Knut Wicksell examined the effects of political exchange between the government and voting public. Eventually, the actual practice of public choice theory was developed in the work of Duncan Black’s seminal work, The Theory of Committees and Elections, in 1958. Black’s work examined the ways that economics can inform the way that the general public votes, even though the political parties in play may not be working their interests. Eventually, this leads us to the work of James Buchanan and Gordon Tullock, who produced the most important work in public choice theory, The Calculus of Consent, which looked at how a constitutional democracy actually influences the choices made to change an economy in a society.
Public choice theory and government
The principle purpose of public choice theory is to examine how the voting public can actually influence decisions made by the government in economic arenas, and if it is even practical to do so. Essentially, it takes into account the weight that politicians have in ensuring the economy stays functional, while also acknowledging that special interests are able to weigh politicians in certain directions, due to a volume of self interest. In the end, public choice theory leads to the rather frightening conclusion that it may not be beneficial for a citizen to spend the time to take to know specific issues and be educated on their choices, due to the pretty much non-existent effect that they have on actual policy. In the end, exercising democracy is inefficient for most people.