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.

Temporal Interdependence

Faced with a set of collective alternatives or options at t₀, the individual recognizes that both preferences and constraints embodied in the historical record are fixed. These are not within the set of choice variables under the control of the decision makers acting within the decision rules. Existing preference functions and the institutions generated by past choices are “relatively absolute absolutes,” subject to change, but only through time—change that might be influenced only marginally by choices made now. In reference to the individual’s own evaluation of the choice options, there is no difference between private choice and public choice in this respect.

A major difference emerges, however, when the individual recognizes that, for public or collective choice, the possible changes in his own preferences may be irrelevant. Collective decisions are reached through the operation of some rule that combines individual expressions of preference. A preference ordering for the collectivity, treated as a unit, need not correspond to that of any individual in the group and, indeed, may not exist at all.

At this point, the analysis seems to lead naturally into a discussion of the most familiar theorem in social choice, Arrow’s impossibility theorem.6 This theorem shows that, even if individual preference orderings are themselves consistent and do not change through a series of pairwise comparisons between alternatives in the inclusive collective-choice set, the “preference ordering” exhibited by the collectivity, as a unit, may not reflect internal consistency under plausibly acceptable rules for combining individual choices.

The temporal dimension as such is not central to the analysis of the Arrow impossibility theorem, and the whole extended discussion of that theorem has been based on the implicit assumption that all of the pairwise comparisons are contemporaneous. By contrast, our emphasis here is strictly on the time dimension and on its implications for the individual’s choice calculus. We are not directly concerned with the possibility of inconsistency in contemporaneous collective “choice,” although this possibility might well offer an additional “reason for rules,” one that we essentially neglect in this book. We are concerned with the attenuation of individual control over collective-choice options and with the effects of such attenuation. A person may exhibit a clear preference between two political-choice options, and the array of separate preferences may be such that the existing decision rule generates a stable result in each discrete time period. Even if the person expects the preferences of others to remain unchanged over a sequence of periods, however, there is no means of predicting whether the sequence of outcomes generated by the decision rule will exhibit a time path that, to this person, seems consistent with his own ordering.

Superficially considered, this result seems to be merely a variant of the impossibility theorem. Note, however, that the problem isolated for examination here is not located in the abrupt shiftability in the makeup of majority coalitions (in the absence of single-peakedness in preferences) as in the more familiar contemporaneous setting. The problem here finds its origins in the subjective nature of individual preferences themselves and in the inability of an individual to know why other persons order alternatives as they do. An individual may prefer option or candidate A to option or candidate B in t₀ because it is anticipated that the selection of A in t₀ will allow, in time period t₁, a further selection of a₁, which is the ultimately desired objective. Alongside such a person who supports A in t₀, however, there may exist someone else in the decisive coalition who chooses this option for precisely the opposing reason, in order to select a₂ in t₁, a final outcome that the first person may find pessimal rather than optimal.

This fundamental difference between individual calculation in private and public choice has not, to our knowledge, been analyzed. The individual will tend to make voting choices in terms of a shorter time horizon than that reflected in his private choices. The person cannot, by the nature of the choice setting itself, incorporate the multiperiod interdependence of decisions to the same degree that is possible in private choice. Although a chooser may recognize, equally in the two settings, that selections made now will influence both preferences and constraints in future periods, the current-period utility value to the individual from “investment” in furthering the achievement of what the same person would prefer the collectivity to become must remain relatively lower than any comparable investment in becoming the private person projected in some idealized life plan. Put in different words, the individual in private choice may try to choose among current-period options so as to construct himself as a continuing consciousness in subsequent periods, as he seeks to achieve a coherent life. The same person, placed as one among many in a public-choosing role, must exhibit less interest in selecting current options with future periods in prospect.

[6. ]See Kenneth J. Arrow, Social Choice and Individual Values (New York: Wiley, 1951).