Critical Review: Man, Society, and the Failure of Politics

CIAO DATE: 03/02

Critical Review

Winter–Spring 1998 (Vol.12 Nos.1–2)

Man, Society, and the Failure of Politics

By Leif Lewin _*

Abstract

Why are political decisions often unfortunate? In replying to this question public-choice theorists fail to distinguish individual conditions from systemic ones. Instead, they make sweeping claims about the egoism of man and the failure of politics. But the real problem is that we often experience government failures despite the best, the most benign motives on the part of citizens, politicians, and bureaucrats. Better than the theory of man’s innate self-interest is the theory of the unintended consequences arising from the inherent shortcomings of the political system. To wish well but to do evil—that is the dilemma of politics.

Public choice constitutes a new theory of politics, write William C. Mitchell and Randy T. Simmons several times in their book, Beyond Politics: Markets, Welfare, and the Failure of Bureaucracy (Boulder: Westview Press, 1994), and in his short foreword Gordon Tullock manages to say the same thing—if I have counted right—no less than six times in the space of three pages. But the notion that human beings seek the same personal advantage in politics as in their private lives is one of the perennial themes in the history of political ideas. Machiavelli articulated it, describing as well as any modern public-choice theorist the ruthlessness of the princes. Hobbes was aware of it too, and constructed a whole theory about the results of man’s egoistic behavior. The ideas of these philosophers were then outstripped by the more “modern” theories of Locke, Rousseau, and Mill, in which men are unselfish and society inherently good. These were then, in turn, replaced by revived theories of egoism, and so on. Thus has the social-science pendulum swung.

But, a modern theoretician might object, public choice is not simply a view of the nature of man. It is also a sophisticated method that demonstrates the logical consequences of the actions of individuals. There is surely something new in that, at least. Since it is systematic, it is superior to the historical accounts of the political science of an earlier age, in which the government was presented as a “romanticized generator of public goods” (Tullock’s preface, xiii); the “new” theory more closely resembles economics or perhaps mathematics. Even this claim to “modernity” is unfounded, however. Hobbes, for example, began his career as an historian and wrote on the war between Athens and Sparta. But on one of his trips abroad he visited a library where he happened to see a book on geometry lying open. He read the proposition on the open page and found it impossible to accept. But he also read the proof of the proposition, which led him in turn back to a previous proposition, and so he continued backwards through the whole theoretical construct. When he had finished reading, he was completely convinced of the validity of the original proposition and of the superiority of the deductive method. This was the way all science should be conducted! How amateurish his earlier warnings about civil war now seemed, presented as they were as the products of historiography. He resolved to write about politics in a new fashion—and he did so with considerable pride: he did not consider there to be any scientific works on politics earlier than his own. The similarity of Hobbes’s approach to the pioneering public-choice analysis of James Buchanan and Gordon Tullock in The Calculus of Consent (1962, 298) is remarkable:

First, on the basis of certain initial postulates and assumptions, the logical consequences can be developed. This sort of theorizing is purely logical in nature and has no empirical relevance in the direct sense.

Perhaps it is hypercritical to take exception to the intellectual pretensions suggested by a certain tone? But in speaking about “a revolution in thought,” “scientific advances,” and “out-of-date opinions,” Mitchell and Simmons make use of bad history to get their readers to be unfavorably predisposed toward earlier writers; thus, they rather persuade than convince their readers. The time at which something is said has no bearing on its validity. Instead, let us judge each theory on its substantive contributions and declare that what Mitchell and Simmons have done is to remind us of one of the classic theories of the motives of man and the nature of politics that recur throughout the ages. They do so, I hasten to add, in an unusually thorough and stringent manner that clarifies their subject. Nevertheless, the fundamental question is whether they and their forerunners are right.

Self-Interest

If, like the authors, one has set oneself the task of writing a basic textbook in public-choice theory, it is certainly to the point to begin with the assumption that the self-interest of man is the moving force in politics. The electorate is presented as a group of pocketbook voters (instead of motivated by a desire to see some general interest realized), the politicians as vote maximizers (as opposed to program-realizers), and the bureaucrats as budget maximizers (instead of as loyal implementers of public decisions). “The new approach begins by assuming that voters are much like customers and that politicians are much like businesspeople,” Tullock writes (xiii). “Bureaucrats in the federal government are much like bureaucrats in many large corporations. These statements seem simple and straightforward. One would think few would disagree.”

Why? An equally plausible hypothesis is that politics has emerged in protest against the market. Parties are often formed because various groups of citizens are moved by a passion to change the conditions they see around them in society. “When we go to vote, we put on our Sunday best,” members of European populist parties used to say. Through an active interest in politics one could broaden one’s horizons and take responsibility for things other than those related to oneself and one’s family. This is why John Stuart Mill saw democracy as an education of the public spirit, a doctrine that was on everyone’s lips when the general franchise was introduced at the time of the First World War.

Two equally reasonable a priori assumptions thus stand here opposed to each other. The task of the scientist is to confront these ideologies with empirical data. In this respect, modern political science has much to contribute; here, one really can speak of a definite advance in relation to former generations of scholars. That Mitchell and Simmons have not made a closer study of the very extensive empirical research that has by now been carried out into the motives of politicians, bureaucrats, and, in particular, voters is a weakness. This negligence is typical of public-choice theory, with its logical and deductive orientation. But similar faults can be found in other approaches in political science. A Tower of Babel has risen amongst us, for those who conduct empirical electoral studies or do empirical research on politicians and bureaucrats often ignore the theory of rational choice, which they might need to interpret their data. Not to mention those who study the history of political thought, who often forget that the philosophers they so lovingly interpret, long since dead and buried, are in fact very much alive, although in the guise of modern theorists (Buchanan is actually Hobbes, Arrow is Condorcet, Hayek is Hume, Nozick is Locke—the game could be continued); and these scholars are just as guilty of neglecting modern empirical research, which would make it possible for them to test the validity of a goodly number of the statements about man and society that have been made by the philosophers they study.

The first empirical results of electoral research tended to support the self-interest hypothesis. Researchers were able to determine a correlation between (of all things) weather and support for the incumbent president: if the harvest was good and the economy prosperous, the president got re-elected (Barnhart 1925). Man thus appeared to be an egoistic creature interested only in satisfying his material needs. However, the next question was which of the voters deserted the government when times were bad, e.g., during a period of mass unemployment. If the deserters were those who were affected, this fact could be taken as support for the self-interest hypothesis. If, on the other hand, they were voters who, without themselves suffering from the crisis, sympathized with those affected and based their votes on principled convictions about what sort of policy the country needed to counteract unemployment, this result would rather favor the counter-hypothesis; in this case, the public interest would seem to be the motive force (Schlozman and Verba 1979).

Present-day research, with its refined concepts and methods, presents us with the following picture. Economic considerations are indeed decisive for the voter’s choice of party. But it is the state of the country’s economy as a whole rather than the voter’s own pocketbook that is appraised: what tips the balance is the voter’s assessment of the government’s ability to manage unemployment, inflation, and the budget deficit. The extra that they stand to gain if a certain party takes power means less to most voters than the loss in welfare that would befall all if an incompetent or ideologically repulsive government were to come to power. There are pocketbook voters in every country, but surprisingly few of them (Kramer 1971; Kinder and Kiewiet 1979; Fiorina 1981; Kiewiet 1983; Lewis–Beck 1986). The theory of voter self-interest has been described as “a good hypothesis facing resistant data” (Lewis–Beck and Eulau 1985, 4).

The deficiencies of Mitchell and Simmons’s treatment of empirical data become apparent on page 46, where they dismiss the ideal of active and interested voters by pointing to the low level of participation in elections in the United States. The reader might come to the conclusion, probably unintended by the authors, that European voters, with 90 percent participation in elections, are consequently very “interested.” (In actual fact, more relevant data indicate that the level of participation is rising generally in the Western world and that American voters actually tend to come closer to the classical ideal of a democratic citizen than their European counterparts.)

Similarly weak is the evidence supporting the public-choice hypothesis regarding politicians. Mitchell and Simmons describe with irony the naïveté of Keynesian economists who believed that governments would use their post-1920s economic powers for the purpose of improving the welfare of their citizens. Instead, they maintain, governments naturally use their increased power for the selfish purpose of getting re-elected, creating a political business cycle that distributes benefits (such as Social Security payments) to voters in election years but diminishes them in the period between elections. Is this true? It is a matter of some controversy among researchers, but a consensus has gradually formed around the verdict that the political business cycle is unproven. (Sweden in 1979 is often cited as a curious exception; the minority Liberal government, comprising ministers who were trained in the social sciences, expanded the budget just before a general election.) The voters are not so easily fooled; if benefits are withdrawn, they will certainly notice it and remember at the next election (McCallum 1977; Alt 1980; Paldam 1981; Dinkel 1981).

Finally, it also has proven difficult to verify the hypothesis that bureaucrats are budget-maximizers who try to get large budgets so that they, themselves, can more easily obtain a higher salary, larger office, or more luxurious car (Niskanen 1971)—as appealing as that view might be to our prejudices about bureaucrats, with whom most of us have had at least some unhappy experience. Instead of administering an agency with a large budget, “the Mandarins of Western Europe,” for example, dream of running a small efficient unit close to the ear of the prince—that is, the finance minister. The satisfaction of being close to political power and of being allowed to take part in executing its program is still today more appealing to the top bureaucrats than the task of administering large, expensive systems for making routine payments (Goodin 1982; Breton and Wintrobe 1975; Rose 1984; Dogan 1975).

The Common Good

If it really were true that man is essentially an egoist in politics, surely a Leviathan would then be needed to prevent people from causing each other injury. That was the conclusion Hobbes drew, as is well known. And he presented Leviathan as nothing less than a fire-breathing crocodile that suppressed people—not at all as harmless as the authors seem to think when, on page 5, they write of “minimal activities by government” as the normative implication of public-choice theory. They do mention Hobbes in one place, but unfortunately do not get his position quite right; a keen awareness of the history of political thought is not one of the authors’ strong points. Hobbes delighted in pointing out conflicts between goals. To decide between freedom and security was no easy choice. For the security he thought necessary, Hobbes was prepared to accept a form of political absolutism that would horrify any modern public-choice theorist.

To me, this is a point on which public-choice theorists have always seemed to be illogical. If man is inherently “good,” no state is needed to maintain law and order, but it is very definitely required if man is inherently “evil,” as is assumed in their theory.

The authors’ normative position is summarized in many pithy formulations. Their main point is a criticism of the notion that market failures justify government intervention. Government is presented as something quite different from the benevolent state that political scientists and welfare theoreticians often claim it is. On the contrary, it is a tool in the hands of those who wish to gain benefits at the expense of others and as such, government should be made as small as possible.

Adam Smith provides the authors a solution to the conflict between egoistic individuals and a mere minimum of state coercion: when individuals act in a free market solely with their own interests in mind, they are also led, as if by an invisible hand, to further a general goal (such as economic growth) that was no part of their original intention. The authors thus declare their faith in the market economy and take a number of pointed and humorous shots at their opponents; in a section on “agoraphobia” in chapter 8, the ignorance shown by many of the critics of the market economy is particularly telling.

But suppose the market is characterized not only by an invisible hand but sometimes by the “Prisoner’s Dilemma”? What happens if selfish individual actions lead to suboptimal outcomes? This is the misgiving the authors should feel when they concern themselves with the free-rider problem (Olson 1982).

Perhaps this is the point at which I might try to summarize the possible combinations of individual strategies and collective results that suggest themselves during a reading of Mitchell and Simmons’s profound analysis. Public-choice theory is so rich and varied that it can be interpreted from a number of perspectives. Let us arrange the combinations in terms of classical positions held in the history of political thought.

Table 1: Conceptions of Politics

		Politics
		“Bad”	“Good”

Individual	“Bad”	Hobbes	Smith

	“Good”	Epicurus	Rousseau

For Hobbes, mankind was “bad”; men were like wolves toward each other and were moved by instincts and drives to exercise power. Leviathan kept them in order. But there was never any doubt that this suppression was also a “bad” condition. The problem was simply that the alternative is even worse: the civil war that would unavoidably break out if men were not kept in check by the iron hand of the state. It has become common in the public-choice literature to agree, a bit nonchalantly, with Hobbes’s questionable analysis; in this respect Mitchell and Simmons are no exception.

Smith, on the other hand, does not believe any such state tutelage to be necessary. In his view, the selfish preferences of the individual are transformed by the invisible hand into the general interest. Smith and other early liberals thought that what is best for the individual is best for society.

For Epicurus man was good; this was his “happy message” when trying to combat the predominant Platonic outlook of ancient Greece, with its depreciation of the earthly life. Politics, on the other hand, was “dirty and bad”; it was best to keep away from it. The purpose of life was to gather one’s friends together in the garden for philosophical discussion. In a way, this is the dream of public-choice theorists, perhaps of everyone. But does the minimal-state utopia work in the present-day world?

Rousseau combines the best of all worlds: man is good and society is good. Despite this, he is no naive idyllist. On the contrary, he is the one who expressed the modern predicament in the sharpest terms: how are the individual preferences of citizens to be transformed into optimal collective decisions? What happens when individuals become active in politics in order to seek general solutions to the problems of society? How can the “general will” be attained? Politics is a “black box” into which individual preferences are stuffed and out of which unfortunate decisions sometimes emerge. What takes place inside this box? As I see it, Rousseau’s thoughts constitute the most fruitful point of departure for a study of the problem posed by the public-choice school. Let us therefore continue the discussion on the basis of his view of the problem as I have expressed it.1

But first I should like to put into question the very point of departure of our—and the public-choice school’s—analysis. Is it really necessary to make any a priori assumptions whatsoever about the egoism of man—whether the nature of man is “bad” or “good”? These a priori assumptions have done more harm than good. In the social sciences it is wise to follow the principle of minimal definition: to refrain from presupposing more than is necessary to the research task at hand and to leave instead as much as possible open to empirical testing (Sartori 1984). I should therefore like to propose that we do not make any assumptions at all about whether man is “bad” or “good”; such speculation is unnecessary if we wish to explain how political decisions are made. Our task is instead to open the black box of politics and examine what happens with the preferences of individuals when they become involved in collective decision-making.

The Black Box of Politics

Political decisions often are unfortunate. They may have sprung from good intentions but the outcome is often bad. Why is this so?

The public-choice approach as presented by Mitchell and Simmons has valuable contributions to make in tackling this question. Democracy was conceived of as a way of substituting the power of the people for the absolutism of kings. But what happens if the people are not in general agreement? This was a theoretical oversight that, during the French Revolution, was shown to have significant practical consequences in reality. The majority principle was finally adopted to break the deadlock. But this rule is of little use when majorities can so seldom be found in reality. In Western democracies, it is in practice different minorities that rule by means of cooperation, negotiation, and bartering. In the process they must sacrifice some of their preferences, which they have been charged by their voters to defend, as payment for receiving help on other issues (Buchanan and Tullock 1962). Sometimes it is not possible to arrive at stable decisions because preferences are circular and do not meet the requirement of transitivity (Arrow 1963). On occasion, the spontaneous wish of the people is too hasty; without special constitutional arrangements, democracy suffers from a lack of reflection and examination of consequences (Riker 1982). Given these difficulties, real-world political decision making easily takes on the character of rule by an isolated elite, something that has little in common with the original theory of democracy. It is not surprising, therefore, to find that the public-choice school often expresses contempt for politicians.

Perhaps most important of all, when trying to shine some light into the black box of politics, is to maintain the “methodological individualism” for which Mitchell and Simmons energetically plead. “The state” is a mere intellectual construct. All that we can observe are individuals and their actions. For this reason, it is an error in method to suppose with some political scientists or welfare theorists that “the state is benevolent.” Individuals, alone, can have such characteristics (Weldon 1947). As I have pointed out above, however, it seems to me that public-choice theorists turn a logical somersault when they presuppose that all people can have only one kind of character—namely, always “egoistic” and never “benevolent.”

The Long Run

How can we escape from the predicament in which unfortunate decisions are made despite the often benign intentions of those who made them? Game theorists have shown that through repeated rounds of the “Prisoner’s Dilemma” the players learn to cooperate in order to arrive at collectively rational solutions. Repetition is one of the hallmarks of politics; tomorrow we meet again for a new round of negotiations. Credibility is therefore a politician’s most valuable asset; if one is deceitful today, one will be left out of the bargaining tomorrow (Axelrod 1984). Rousseau made the same point in the famous parable of the stag hunt, even though he wrote more intuitively and without the stringency one finds in modern rational-choice theory: before man “discovered tomorrow” and learned to make long-term calculations, it could happen that a hunter, patiently standing watch in the stag hunt, might allow himself to be distracted by a rabbit that happened to run by, even though his share of the stag would have been greater than the rabbit he might have for himself (Rousseau [1755] 1974).

Mitchell and Simmons, as well as the whole public-choice school, depict political man as such a myopic cave man. But is not politics the art of making farsighted assessments of the consequences of collective action for society as a whole? Is this not, in a nutshell, the purpose of an election campaign? The authors in fact admit as much in their discussion of the political business cycle. “The most important cause of modern economic fluctuations is not the economy but the polity,” they first state (176). But suddenly, they argue instead that the voters are not so foolish as to let themselves be deceived time and time again: “the citizenry soon learn that they can partially counter this obvious Machiavellian electoral strategy” (180). Thus, while those who control the state, i.e., politicians and bureaucrats, are constantly out to hoodwink us, this is perhaps not so serious since the citizens can fight back! As far as I can see, this constitutes an important concession: man is not as shortsighted as public-choice theory assumes but is capable—not from goodness but from rationality—of making farsighted calculations.

That being the case, the theory of public choice, as presented by Mitchell and Simmons, contains a sort of ecological fallacy. Their assumptions in one area lead them to believe that similar conditions pertain in another. Let us instead be content to declare that politics sometimes fails, but let us not make any a priori assumptions about how frequently. Let us assume that man is capable of acting rationally without presuming that he always does. And certainly let us engage in no apriorism about the substance of man’s preferences. The better we understand what happens in the black box of politics, the better able we surely will be to make long-term calculations. Political scientists have only just begun this project by examining the institutional conditions that sometimes lead to unwanted social consequences.

References

Alt, James. 1980. “Political Business Cycles in Britain.” In Models of Political Economy, ed. Paul Whiteley. London: Sage.

Arrow, Kenneth J. 1963. Social Choice and Individual Values. New Haven: Yale University Press.

Axelrod, Robert. 1984. The Evolution of Cooperation. New York: Basic Books.

Barnhart, John D. 1925. “Rainfall and the Populist Party in Nebraska.” American Political Science Review 20: 527–40.

Breton, Albert, and Ronald Wintrobe. 1975. “The Equilibrium Size of a Budget-Maximizing Bureau: A Note on Niskanen’s Theory of Bureaucracy.” Journal of Political Economy 83: 195–207.

Buchanan, James M., and Gordon Tullock. 1962. The Calculus of Consent: Logical Foundations of Constitutional Democracy. Ann Arbor: University of Michigan Press.

Dinkel, Reiner. 1981. “Political Business Cycles in Germany and the United States: Some Theoretical and Empirical Considerations.” In Contemporary Political Economy: Studies of the Interdependence of Politics and Economics, ed. D. A. Hibbs, H. Fassbinder, and R. D. Rivers. Amsterdam: North Holland Publishing.

Dogan, Mattei, ed. 1975. The Mandarins of Western Europe: The Political Role of Top Civil Servants. New York: John Wiley.

Fiorina, Morris P. 1981. Retrospective Voting in American National Elections. New Haven: Yale University Press.

Goodin, Robert E. 1982. “Rational Politicians and Rational Bureaucrats in Washington and Whitehall.” Public Administration 60: 23–41.

Kiewiet, Roderick D. 1983. Macroeconomics and Micropolitics: The Electoral Effects of Economic Issues. Chicago: University of Chicago Press.

Kinder, Donald R., and Roderick D. Kiewiet. 1979. “Economic Discontent and Political Behavior: The Role of Personal Grievances and Collective Economic Judgements in Congressional Voting.” American Journal of Political Science 23: 495–527.

Kramer, Gerald H. 1971. “Short-term Fluctuations in U.S. Voting Behavior, 1896–1964.” American Political Science Review 65: 131–43.

Lewis–Beck, Michael S. 1986. “Contemporary Economic Voting: Britain, France, Germany, Italy.” American Journal of Political Science 30: 315–46.

Lewis–Beck, Michael S., and Heinz Eulau. 1985. “Introduction: Economic Conditions and Electoral Behavior in Transnational Perspective.” In Economic Conditions and Electoral Outcomes: The United States and Western Europe, ed. Heinz Eulau and Michael S. Lewis–Beck. New York: Agathon Press.

McCallum, Bennett T. 1977. “The Political Business Cycle: An Empirical Test.” Southern Economic Journal 44: 504–15.

Niskanen, William A. 1971. Bureaucracy and Representative Government. Chicago: Aldine–Atherton.

Olson, Mancur. 1982. The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities. New Haven: Yale University Press.

Paldam, Martin. 1981. “An Essay on the Rationality of Economic Policy: The Test-Case of the Electional Cycle.” Public Choice 37: 287–305.

Riker, William H. 1982. Liberalism Against Populism: A Confrontation between the Theory of Democracy and the Theory of Social Choice. San Fransisco: W. E. Freeman.

Rose, Richard. 1984. Understanding Big Government: The Programme Approach. London: Sage.

Rousseau, Jean–Jacques. [1755] 1974. “Discourse on Inequality.” In The Essential Rousseau, ed. Lowell Baird. New York: New American Library.

Sartori, Giovanni, ed. 1984. Social Science Concepts. A Systematic Analysis. London: Sage.

Schlozman, Kay Lehman, and Sidney Verba. 1979. Injury to Insult: Unemployment, Class and Political Response. Cambridge, Mass.: Harvard University Press.

Weldon, Thomas D. 1947. States and Morals. London: Whittlesey House.

Endotes

*: Leif Lewin, Department of Government, Uppsala University, Skytteanum, Box 514, S-751 20 Uppsala, Sweden, telephone 46-18-18-34-12, telefax 46-18-18-34-09, is the author of Self-Interest and Public Interest in Western Politics (Oxford, 1991). Back.

Note 1: J. S. Mill offered a special variant, a sort of mixture of Smith and Rousseau. This eclecticism makes him difficult to classify. Basically he has an optimistic view of the nature of man (man is “good”) but he also counts on there being egoistic beings. Mill’s original contribution to democratic theory is to see the role of democracy as that of educating citizens: by being trusted with public positions, all people—the “bad” as well as the “good”—are transformed into responsible citizens. Back.