The Online Library of Liberty

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• 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

VII.

Summary

The central object of this chapter has been to examine the question of distributive justice through constitutional eyes. Our point of departure has been the observation that the “benevolent despot” model of political processes is totally inadequate for the purposes of discussing distributive justice, just as it is in other pieces of normative social analysis. We cannot adequately characterize governments as “choosing” among alternative distributions. Rather, distributions emerge from the complex interaction of autonomous agents, all making individual choices under a given set of rules. The evaluation of alternative distributions is to be seen as a preliminary step only, as a piece of abstract normative theorizing, which of itself is incapable of revealing anything at all about policy-relevant matters. What is required is an examination of the way changes in the rules under which individuals interact change the pattern of distributive outcomes. Such examination we call “institutional incidence analysis.”

The analytic core of this chapter contains just such an institutional incidence analysis for an extremely simple model of majority rule. We make alternative assumptions about the excess burdens generated by taxes and transfers and examine the distributional effects of imposing various restrictions on the ways taxes can be levied and transfers paid. The general conclusion to be derived from this analysis is that majority rule is at best a highly imperfect means of pursuing distributive justice. Majority rule either generates cycles (that is, is basically distributionally indeterminate) or, when appropriately restricted, generates a specific pattern of transfers that is perversely responsive to normatively relevant changes (say, to changes in the income of the poorest).

All this suggests the possibility of lifting the determination of the redistributive or transfer budget out of the jurisdiction of in-period majoritarian politics and making it a matter of explicit constitutional compact. This can, of course, be done. But a constitutional decision to embed some transfer operations in the general rules of the game cannot be presumed. Expected effects on the distribution of income will presumably be relevant in the choice among alternative sets of rules, and rules generating more nearly equal patterns of distribution may, ceteris paribus, be preferred. Chosen rules, however, need not involve “handicapping” the more successful players. There is available, at the constitutional level, a wider set of options, and the means chosen for achieving more equitable outcomes need not necessarily involve interpersonal transfers.

The analysis here, to be sure, falls short of being definitive. It does, we believe, nevertheless point in the right direction. Traditional discussions of distributive justice are hopelessly remote from the real world of distributive politics. Indeed, crucial political constraints are typically ignored altogether, and the institutional feasibility of distributive justice is brushed aside as an irritating minor technicality. This may be an acceptable procedure for the moral philosopher, but for the social analyst it is totally inadequate. Our object here has been to expose that inadequacy and to indicate the sort of inquiry required to fill the void.

For present purposes, it seems clear that faith in the capacity of ordinary majoritarian processes to generate equitable patterns of distribution is naïve indeed. In the absence of rules designed to restrict the operation of majoritarianism in particular ways, almost anything goes. Equality in an expected sense emerges only because of the intrinsic unpredictability of the future pattern of political coalitions, and what remains to be distributed in the world of “politics without rules” cannot be anything but small.

9.

Is Constitutional Revolution Possible in Democracy?