CONCLUSION

Public choice and law and economics represent two schools of neoliberal governance. Classical liberalism derives from natural law theory to ground either the self-evidence of rights to personhood and property or the obligation to comply with agreements according to the principle of consent and voluntary cooperation.^[515] Liberalism secured a basis for voluntary market exchanges within the context of a night watchman state by arguing that upholding justice is the best means to generate general prosperity, which emerges from indivi­duals’ security of their persons and property, and the freedom to exchange without interference in accordance with their own interests.

Two familiar challenges arise. First, it is unclear how the boundaries of personhood and property are determined, if not through coercive bargaining underlying the formation of a legal regime and the perpetual contestation of legal rights. The second acutely critical point is that, even if we were to accept that agents are satisfied with their original holdings, believe bargaining power is equal, and agree to terms of exchange, according to the bargaining theory championed by John Nash, every agent would still foremost prefer to steal from other members of society unless constrained by the application of force.

Consent to terms of rule, whether in two-party contracts or in an n-member society, provides the fulcrum of classic liberalism. It is possible that Nash, along with noncooperative game theory more generally, provides a deep analytic insight into the nature of exchange that free trade must be encapsulated in a coercive system of constraints to be rendered feasible.^[518] This necessarily follows from first claiming that every consideration of value to agents is contained in their preferences over outcomes and then assuming that the only thing that actors value is possession of fungible goods which have value independent from social institutions and relations.^[519] Expected utility functions, often calibrated in dollar terms, cannot easily incorporate an evaluation of how much respecting another’s right of ownership is worth: it would require that I estimate the value of your property to your equivalent of its value to me so that I am not tempted to steal it. Noncooperative game theory and expected utility theory are thus poor tools for capturing all behavior considerations relevant to agents, such as long­term prudential concerns that cannot be measured on a case-by-case basis; mutual respect, or the voluntary limitation of one’s action to avoid injuring others despite no direct increase in personal satisfaction; and commitment, or the wherewithal to constrain one’s future actions in conjunction with others to achieve mutual goals.

Decision theory by itself, without game theory, is complex and may be modified to encompass moral considerations such as side constraints.^[520] However, the noncooperative game theoretic position that underwrites the Prisoner’s Dilemma view of the social contract and bargaining cannot readily admit long-sighted prudence, mutual forbearance, or commitment. The iron law of this body of theoretical work holds that any agreement must necessarily devolve into coercive bargaining unless encompassed by the threat of force to maintain compliance.

Both public choice and law and economics have drifted far from classical liberalism, which endorses types of action not reducible to momentary cost­benefit analysis of outcomes. Individuals exposed to such teachings are prone to becoming skeptical about the rationality of types of conduct that resist ready reduction to expected utility maximization. Research shows that a small popu­lation of noncooperative actors can influence the larger community, leading to a preponderance of noncooperative outcomes.^[521] The principles of mutual respect of rights and commitment are fundamental to classic Western liberalism and therefore remain well worth contemplating and enacting even though they are not readily assimilated into the language of expected utility and tangible rewards.

By way of conclusion, the following points are prominent:

1. Although James M. Buchanan and Richard Posner propose differing views on consent, both are divorced from classical liberalism. For the classical liberal agent, agreeing to terms is motivationally binding and is built on the respect of personhood and recognition of the others’ right to exist, which are the elemental commitments grounding the rule of law and free market exchange.

2. Both public choice and law and economics are retrogressive in the sense of tacitly endorsing ever widening access to resources and demonstrations of power, even more so than Robert Nozick’s libertarianism.

3. However, like within the family of modern liberal political theories, neoliberalism is not limited in its expression to non-egalitarian outcomes, although it offers little purchasing power to resist this implication given its rejection of the no-harm principle as the ground from which to build relations and institutions. Cass Sunstein’s school of libertarian paternal­ism, for example, also shares with law and economics the tendency to identify actors with their preferences and opportunities, therefore finding it permissible for the state to intercede in their decision making to correct cognitive deficiencies and shortfalls of rationality, nudging citizens to make the right choice.^[522]

4. Neoliberalism’s treatment of persons as though they were interchange­able with nonhuman actors, or even as strategy profiles derived from expected utility functions standing as programmable algorithms deter­mining choice, reveals its shared roots in nuclearized sovereignty. A major US Cold War objective was to maintain sovereignty through issuing credible threats of calibrated destruction ranging from conven­tional warfare through limited nuclear options to full-scale thermonuc­lear exchange. Command and control for this eventuality demanded that the United States could execute a chain of command and set of instruc­tions over war fighting that could persist regardless of whether officers of state were deceased or missing. Rational choice removes the need for a conscious or present decision maker at any given moment of choice. Similarly, for law and economics and libertarian paternalism, if actors’ preferences are known along with all eventualities and market prices, then systems of exchange and institutions can be programmed and auto­mated to achieve optimal equilibria.

5. For law and economics and public choice, rational agency is confined to strategic competition. Both view freedom experienced in terms of deter­mining the significance of one’s choices or choosing from a menu of alternative rationales for action to be naive at best and inviting failure at worst. Yet the two schools differ in their views of which social order best serves individuals’ interests. Although neither has a normative pur­chase in the sense of recognizing any course of action for its ethical merit other than satisfying individuals’ preferences, Buchanan hopes that gov­ernment will be limited to protecting those property rights that indivi­duals bring into the social contract and continually exert their power to renegotiate and augment. Posner holds that the entire purpose of prop­erty rights in the first place is to render possible economic gain; hence, he requires that everything be for sale to maximize wealth, even, in effect, the entitlement to rights themselves.