Front Page Titles (by Subject) III.: Individuals as Sources of Value - The Collected Works of James M. Buchanan, Vol. 10 (The Reason of Rules: Constitutional Political Economy)
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III.: Individuals as Sources of Value - Geoffrey Brennan, The Collected Works of James M. Buchanan, Vol. 10 (The Reason of Rules: Constitutional Political Economy) 
The Collected Works of James M. Buchanan, Vol. 10 (The Reason of Rules: Constitutional Political Economy) Foreword by Robert D. Tollison (Indianapolis: Liberty Fund, 1999).
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Individuals as Sources of Value
The critical normative presupposition on which the whole contractarian construction stands or falls is the location of value exclusively in the individual human being. The individual is the unique unit of consciousness from which all evaluation begins. Note that this conception does not in any way reject the influence of community or society on the individual. The value structure of an isolated human being may be totally divergent from that of such a person described by membership in one or many social relationships. The presupposition requires only that societal or communitarian influences enter through modifications in the values that are potentially expressed by the individual and not externally.
If the individual is presupposed to be the only source of value, a question arises concerning identification. Which individuals are to be considered sources of value? There is no apparent means of discriminating among persons in the relevant community, and there would seem to be no logical reason to seek to establish such discrimination if it were possible. Consistency requires that all persons be treated as moral equivalents, as individuals equally capable of expressing evaluations among relevant options.
From these presuppositions, and these alone, it becomes possible to derive a contractarian “explanation” of collective order. Individuals will be led, by their own evaluation of alternative prospects, to establish by unanimous agreement a collectivity, or polity, charged with the performance of specific functions, including, first, the provision of the services of the protective or minimal state and, second, the possible provision of genuinely collective consumption services.2
As noted earlier, the empirical record of the establishment of historical states is essentially irrelevant to the contractarian explanatory argument. The fact that most historical states have emerged from conquest of the weak by the strong does not render unimportant or irrelevant the question, Can the existing state, as observed within the rules that describe its operations, be legitimized in the broadly defined contractarian vision? To deny the relevance of this question, and at the same time to hold to the contractarian presuppositions, would amount to making the charge that almost all observable states are illegitimate. In this case, the contractarian must join the ranks of the revolutionaries. If, however, within broad limits, the state can be legitimized “as if” it emerged contractually, the way is left open for constructive constitutional reform. Existing rules can be changed contractually even if they did not so emerge.
Note that in the conceptual derivation of the origins of the state just sketched, there is no resort to any source of value external to the expressed preferences of individuals who join together in political community. The state does not emerge to protect “natural rights.” Nor does it reflect or represent the working out of some cosmic force, some will of God or gods. More important, the state does not exist as an organic entity independent of the individuals in the polity. The state does not act as such, and it cannot seek its own ends or objectives. “Social welfare” cannot be defined independently, since, as such, it cannot exist.
To this point, the contractarian defense has been relatively easy. A much subtler confusion arises when we raise questions concerning what it is that individuals seek to gain from political order, even when the basic contractarian presuppositions are granted. Even when the existence of nonindividualistic sources of value is denied, or apparently so, we are still left with individuals’ own attitudes toward their activities as they enter into the idealized contractual dialogue. What do individuals seek when they attempt to reach an agreement with each other on rules governing their behavior and on rules limiting the exercise of state power in enforcing such rules? Do they seek “good”? Do they seek “truth”? Is collective organization viewed as a means or instrument of discovery, whether that to be discovered is described as “good,” “true,” or “beautiful”? Is politics analogous to science, or science to politics?
[2. ]This derivation is elaborated in some detail in Buchanan, Limits of Liberty.