James Buchanan and Gordon Tullock’s The Calculus of Consent is usually considered a classic of free-market thought, but Rothbard was not an admirer of it. In a memo, now conveniently available in Rothbard’s Economic Controversies, prepared in 1960 for the Volker Fund on a manuscript version of the book, he raises some fundamental questions about it, and in this week’s article, I’d like to discuss some of these.
As everybody knows, Rothbard’s defense of libertarianism is based on natural rights. Buchanan and Tullock rejected natural rights, instead relying on a unanimity rule. In essence, if everybody within a society agrees at a “constitutional stage” to adopt a framework in which people can associate and work out their conflicts, isn’t this in effect just as good as natural rights, but without the philosophical baggage? After all, if you are in the society, and everybody has to agree on the framework, then you agree, so what can you complain about?
Rothbard didn’t see it this way. In his view, the unanimity rule is an attempt to justify the status quo: whatever the existing government does is right:
. . .the major emphasis of the “unanimity rule” is to put a stamp of approval on existing government actions as being “really” backed by unanimous consent. I have noted this before in Buchanan’s writings. How is this done? In many ways, some of which are so involved in their transparent rationalizations as to be almost absurd. The basic way is to set up a dichotomy between “constitutional decisions” and concrete decisions of government policy. Buchanan and Tullock admit that concrete decisions might represent conflict: A and B winning out over, and even at the expense of, C. But “constitutionally,” which is a term that they use quite vaguely but which apparently means the rules for government decision-making, they assume that these rules are somehow “unanimously” agreed to, and therefore that, in a sense, the concrete political decisions are also unanimous. Thus, the unanimity rule, seemingly libertarian, actually turns out to be more of a fallacious support for the status quo—whatever the status quo happens to be—than a plea for libertarian principle.
What I think is the best point Rothbard makes against the unanimity rule is that it doesn’t in fact cover everybody. “Near unanimity” is deemed to be enough, because of the decision costs in trying to get everybody to agree. But if you don’t agree to the rule, then the rule obviously doesn’t lead to the same results as natural rights libertarianism; your rights have been violated:
Further, by unanimity Buchanan and Tullock by no means always refer to real unanimity; instead, they speak of “relative unanimity” or “80 percent unanimity,” and so on. In short, when the chips are down, they are willing to waive unanimity in order that the “costs of decision” for the group or society be minimized. “Relative unanimity” is obviously a misleading use of semantics.
Rothbard goes further. He destroys the whole line of thought behind the unanimity rule. Buchanan and Tullock assume that most people approve the basic social rules, as at least the best they can get, given that they want everybody—or nearly everybody—to agree, but Rothbard denies this. He thinks that people will always be looking out for what is in their interest, weighing the gains from violating the rule against the costs of detection and punishment. In brief, Rothbard has a much more conflict-ridden view of society than Buchanan and Tullock, if a government exists:
Why all of us are supposed to be behind the constitutional decisions, Buchanan and Tullock do not really support. They say (as Buchanan did in his journal article last year) that a thief is really for a law against stealing so as to keep his own property, so that it can be said that even a thief in a way approves of his own punishment. I think this is absurd; a professional thief is clearly opposed to laws against stealing (it is a rule of honor among professional criminals not to run to the police for help—and also a wise precaution for them). How did Buchanan and Tullock manage to get into this trap? By blithely assuming that when the “constitution” is being considered, no one knows whether or not he will be able to benefit by the various rules in specific situations, so it is to everyone’s self-interest to have rules, as it were, in the general interest. Now this appears to me to be completely insupportable; people do have certain interests, and they will be able to gauge to what extent a rule will benefit or not benefit them. (This is especially true because Buchanan and Tullock think of the “constitution” as continuing, rather than as the original writing.) The professional thief knows he is a professional thief, and therefore that the weakening of laws against stealing, or constitutional provisions against stealing, will benefit him, and so on.
Rothbard thus takes an ostensible free-market classic and finds in it a justification for unlimited government, because people “really” approve of being coerced. (By the way, Buchanan got some of this from Rousseau, whom he greatly admired. People must be “forced to be free.” Tullock was a utilitarian.) Rothbard says that “income insurance” is a prime example of what he opposes:
The worst example of this, including the definite tendency to rationalize the existing situation as reflecting unanimity, is the concept of “income insurance” to justify actions of government that “redistribute” income. Now it is obvious that when government takes from A and deliberately gives to B, this can hardly be called a gesture of unanimity, or people voluntarily banding together to purchase a service from government. But Buchanan and Tullock try to say this, by asserting that the wealthy really favor being taxed more than the poor, because they are taking out “income insurance,” knowing that when they will be poor, the government, like an insurance company, will help them. And, in another place, they say that people really want to be coerced so long as they are all coerced, so that everybody is really not being coerced. Not only do I consider all this nonsense, but it is dangerous nonsense as well, because it provides new support for the idea that anything that the State does, no matter how blatantly coercive, is “really” backed by everyone.
If you like The Calculus of Consent, you need to take Rothbard’s analysis into your calculations.
