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

III.

Preferences for Preferences

To what extent are the preferred trade-offs among the ultimate Z’s chosen? Can we really go much beyond the Beckerian Z’s? Can we say anything about the formation of preferences? Can we discuss meta-preferences meaningfully?

More can be said once we recognize that individuals make choices sequentially over discrete time periods and that choices made in one period influence those made in later periods. We stress here that we seek to do more than introduce the capital investment aspects of current-period choices. We can readily incorporate such aspects into the standard framework by defining a relevant Z as “consumption in time t_i,” hence allowing a person at time t₀ to devote available resources to the production of that Z. This analysis implicitly presumes that the individual chooses only at t₀. No multiperiod choice is introduced, although the temporal interdependence of utility is embodied in the analysis.

We propose to examine genuine multiperiod choice in a setting where the individual, having chosen among the relevant Z’s, all dated as of time t₀, moves through time to find himself at t₁. He is not the same person who confronted choice at t₀, and this fact will be taken into account when the initial choice is made at t₀. At t₁, the individual will be a “product” of choices that have been previously made at t₀ and over the whole sequence of periods t_-1, t_-2, ..., t_-n. Within relevant limits, the individual constructs himself as an acting and choosing entity by the actions taken in periods before that in which choice is now confronted.2

The individual has a private, personal history, and this history will have shaped both the preferences and the constraints that interact to determine choice behavior in any period t₀. A person who has never tasted wine cannot exhibit a preference for “good” wines even when the standard constraints allow such options to be within the potential consumption bundle. A person who has not trained for long-distance running cannot compete in the Boston marathon regardless of a strong desire to do so.3 In the conceptualization here, an individual is analogous to a specific capital good, a machine designed and constructed with a determinate form and shape and, therefore, capable of being used over a relatively limited range of functions, departures from which can be made only at some anticipated costs in efficiency.

Rationality precepts require that this temporal interdependence be recognized. A rational person, temporally located at t₀ and given a personal history, will recognize that current-period choices among relevant Z’s will, in turn, directly affect the range of Z’s that will be potentially attainable in t₁ and beyond and, also, that current-period choices can shape, to an extent, the Z’s that will be preferred in later periods. “The individual” at t₁ will be predicted to be some continuity of the person who faces the choice options at t₀; the individual “constructs” the chooser at t₁ and beyond, as well as the set of choice options, within limits. (The limits of the interdependencies are not important for the analysis as such.) A preference ordering of the set of possible “persons at t₁” that the chooser reckons to be feasibly attainable would seem no different, conceptually, from a preference ordering of a set of basic Z commodities.

If such a preference ordering is admitted to be possible, and if current-period choices are acknowledged to affect the choices to be made in subsequent periods, the analysis must involve a “preference for preferences.” Some futures must be deemed better than others, and choices in the present will tend to reflect these preferences.

[2. ]This self-construction aspect of choice has been discussed in some detail by James M. Buchanan, “Natural and Artifactual Man,” in What Should Economists Do? ed. James M. Buchanan (Indianapolis, Ind.: Liberty Fund, 1979), pp. 93-112.

[3. ]For purposes of our analysis, it is not important to distinguish between shifts in constraints and shifts in preferences. Stigler and Becker argue that it is helpful to treat all such shifts as changes in constraints, under the postulate that preferences remain uniform both over time and among persons. In either case, the individual who chooses does so in the knowledge that his choice behavior at one time can affect his potential choice actions at other times. See George Stigler and Gary Becker, “De Gustibus Non Est Disputandum,” American Economic Review 67 (March 1977): 76-90.