The Online Library of Liberty

A project of Liberty Fund, Inc.

• Foreword
• Preface
• The Reason of Rules
• 1.: The Constitutional Imperative
• I.: Introduction
• II.: Reasons For Rules
• III.: Rules of Games
• IV.: Rules of the Road
• V.: Rules of the Market Order
• VI.: Rules of Political Order
• VII.: The Importance of Rules
• 2.: The Contractarian Vision
• I.: Introduction
• II.: Noncontractarian Constitutionalism
• III.: Individuals As Sources of Value
• IV.: Contract and Exchange
• V.: Politics In the Exchange Perspective
• VI.: Unanimity As the Contractual Ideal
• VII.: Agreement On Rules and the Veils of Ignorance and Uncertainty
• VIII.: Conclusions
• 3.: The Myth of Benevolence *
• I.: Introduction
• II.: Private Good and Public Good
• III.: Science, Truth, and Politics
• IV.: The Authoritarian Imperative
• V.: Majoritarian Democracy In the Noncontractarian Paradigm
• VI.: The Aim of Politics
• 4.: Modeling the Individual For Constitutional Analysis
• I.: Introduction
• II.: Homo Economicus In Politics: the Argument For Symmetry
• III.: Science and the Empiricist Defense
• IV.: A Methodological Defense of the Differential Interest Model of Behavior
• V.: Social Evaluation and Quasi-risk Aversion
• VI.: Gresham’s Law In Politics
• VII.: Summary
• 5.: Time, Temptation, and the Constrained Future *
• Preface
• Part 1.: Individual Private Choice
• I.: Introduction
• II.: The Ultimate Z ’s
• III.: Preferences For Preferences
• IV.: Past, Present, and Future
• Part 2.: Individual Public Choice
• I.: Introduction
• II.: Society With a History
• III.: Temporal Interdependence
• IV.: An Illustration
• V.: Moral Rules And/or Constitutional Commitment
• 6.: Politics Without Rules, I: Time and Nonconstrained Collective Action
• I.: Introduction
• II.: The Social Discount Rate
• III.: The High-tax Trap
• IV.: The Inflation Trap
• V.: The Public-debt Trap
• VI.: Other Examples
• VII.: Conclusions
• 7.: Rules and Justice
• I.: Introduction
• II.: Just Conduct and the Notion of Desert
• III.: Justice and Promise Keeping
• IV.: Justice Among Rules
• V.: Just Rules, Agreed-on Rules, and Just Conduct
• VI.: Conclusions
• 8.: Politics Without Rules, II: Distributive Justice and Distributive Politics
• I.: Introduction
• II.: Distributive Justice: the Conventional View
• III.: The Constitutional Perspective and Institutional Incidence
• IV.: The Incidence of Unrestricted Majoritarianism
• V.: Tax Rules and Distribution Under Majority Rule
• VI.: Direct Constitutionalism and Distributive Justice
• VII.: Summary
• 9.: Is Constitutional Revolution Possible In Democracy?
• I.: Introduction
• II.: Pareto-superior Change and Wicksellian Unanimity
• III.: Distributional Limits and Prospective Rules
• IV.: Status Quo Entitlements and Distributional Envy
• V.: Constitutional Change and Free Riders
• VI.: The Role of Norms
• VII.: Toward a Civic Religion

VI.

Unanimity as the Contractual Ideal

Individuals are conceived as entering into discussion and ultimately reaching some initial agreement that both assigns separate individual rights and establishes an authority charged with the protection and enforcement of these rights. For this contractarian metaphor to be coherent, the agreement must be conceived to be inclusive. The terms must be accepted by all persons who are to be designated members of the group affected. Contractual agreement among a subset of persons, with terms to be imposed on others, would negate the legitimacy of the whole construction.

In an evaluative usage, an observed set of rules must be such as might conceptually have emerged from general agreement. The basic rules themselves, however, may well prescribe procedures for taking actions, privately or collectively, that do not require the consent or agreement of all members of the polity, either in actuality or evaluatively. Indeed, the distinction among levels of decision, exemplified in our fundamental two-stage emphasis on rules and behavior within rules, helps clarify this feature. There may be general agreement on a rule for taking political action (for example, determining the level of public outlay on education by a majority voting rule in a legislative assembly) that does not require approval by all members of the community. Or there may be unanimous agreement on a structure of legal rules within which persons in their private capacities may be allowed to take actions that other persons oppose (for example, entering into an established industry or profession).5

Even if at a highly abstract philosophical level the unanimity basis for establishing the legitimacy of the institutions of social order is acknowledged, on a practical level a requirement for unanimity may seem to be mere utopian romanticizing. Individuals come to the contractual process, even in its most idealized form, with separately generated values and with separately identifiable interests. The analogy with simple trade in partitionable private goods breaks down, or so it may be argued, because in any social or political contract, there must be agreement on the same rule, to be applied to all participants. In the exchange of apples for oranges, by contrast, agreement is facilitated by the simple fact that the two parties need not end up, after trade, with the same potential consumption bundle. If A and B, in the example, were somehow required to agree on a final allocation that assigned equal quantities of each good to each person, it seems likely that this requirement would preclude agreement altogether in many situations.

Quite apart from the “publicness” of any political agreement, however, is the even greater difficulty we confront when we consider the size of the trading group. With simple commodity exchange, or indeed any economic relationship, the agreement reached must ultimately include only two parties or agents in any directly participatory sense: one buyer and one seller for each good to be exchanged. The presence or absence of other buyers or sellers will, of course, affect the terms of trade between any two traders, but 2 remains the magic number for the economic analyst.

With political exchange, however, all parties must agree on terms. If we generalize from the simple economic exchange paradigm, any basis for expecting unanimous agreement on anything seems to disappear. In a situation where a unanimity rule is operative, each person is placed in a position, vis-à-vis all others, fully analogous to that held by a single party in a bilateral monopoly game. The incentives for strategic bargaining behavior seem maximal. At this point, however, the “publicness” of the result, noted before as restricting agreement in the economic exchange setting, partially offsets the incentives for strategic bargaining behavior. If the participants are constrained by the knowledge that any outcome reached must be equally applicable to all of them, they have much less incentive to try to hold out for purely distributional gains analogous to those promised to the successful strategist in the game of bilateral monopoly in goods.

[5. ]The discussion in this and the following sections is closely related to the analysis presented much earlier in Buchanan and Tullock, Calculus of Consent.