Alexander Hamilton, in the opening essay of The Federalist, famously declared that the American experiment would determine “whether societies of men are really capable of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force.” In his new book, Cass R. Sunstein implicitly asks the same question: Are we really capable of governing ourselves through our own reflection and choice? Contra Hamilton, Sunstein concludes that we are destined to rely on accidental circumstances, namely whether “choice architects” create an environment in which we will choose correctly. Simpler: The…
“Public choice,” of course, is just a highfalutin circumlocution for “politics.” But the name is usually applied to the leading neoclassical version articulated by James Buchanan and Gordon Tullock in The Calculus of Consent.
This theory has a number of obvious attractions for libertarians, which I will briefly describe. Unfortunately, because its drawbacks outweigh these attractions, it needs to be replaced by an updated version of what might be called the Founders’ older “theory of American public choice.”
The problem is by no means peculiar to the theory of public choice, but rather is a general one apparent in all branches of neoclassical economic theory. This requires some explanation.