UNANIMITY SCRUTINIZED
Jules Coleman’s essay on unanimity demonstrates how philosophically complex this concept is.[482] On the surface, the principle of unanimity appears self- evident and free from controversy.
It seems to be roundly compelling and constructive. It is profoundly democratic but also obviates the difficulties of the tyranny of the majority because there is no minority that could be oppressed. It captures the idea of market efficiency, or the Pareto condition that individuals only accept states of the world that improve their conditions, increase their wellbeing, or promote their interests. It also seems to convey the sense of voluntary participation because each individual has personal veto power to reject any outcome under consideration that she or he deems personally inferior. In the case that a collective decision requires unanimous consent to be enacted, then any single individual has veto power to say “no.” Hence, if Buchanan’s insistence on unanimity as the basis of his constitutional order can deliver on all of these promises to ground mutually attractive principles governing a constitutional order and to identify the attractive feature of the free market through individuals’ voluntary and unanimous participation, then it would seem to be unassailable from all angles of attack.Throughout his career, Buchanan has claimed to follow his intellectual predecessor’s, Knut Wicksell’s, use of unanimity to provide an argument for government. Wicksell directly attacks the heart of the matter in considering what level of public goods production versus taxation would achieve unanimous consent from citizens.[483] As has been repeated ad nauseam in the Prisoner’s Dilemma rendering of the public goods problem, it is demonstrably in each individual’s interest to partake in public goods, even if each seeks to free ride on others’ efforts.[484] The uncontroversial role of government is to levy punishment on defectors, thereby achieving a state of affairs on the Pareto frontier whereby all individuals gains more than they pay through the collective effort.
However, I argue in Part II, Chapter 9, that the rational choice application of the Prisoner’s Dilemma model of exchange to analyze social order deviates considerably from Wicksell’s, which holds that as long as individuals gain more than they receive from a collective venture, or government, then voluntarily contributing is rational.[485]Coleman explains Wicksell’s basic premise: “Because the provision of public goods is capable of making each person better off, there should be a way of providing and distributing their benefits and costs that can secure each person’s agreement.” He continues, “There should exist, in other words, a public good-tax package tailored to each person which will secure his consent. In the aggregate, there is a relationship between the optimal provision of public goods and unanimity.”[486] Here unanimity refers to all individuals ratifying a comprehensive tax package based on its formula being responsive to each individual’s costs versus benefits from collective action. Wicksell’s tax scheme was formally developed by his student Erik Lindahl. The Wicksell-Lindahl system determines each individual’s tax package by comparing the marginal cost of a public good to the marginal benefit each individual receives from it and then builds this up to a plan that can acquire each individual’s consent. It seems uncontroversial that individuals would sign up for a tax scheme in which the benefits they receive outweigh the costs of their personal contributions. The concept of efficiency lies behind such an application of the unanimity principle. Wicksell, moreover, assumes that efficiency has an objective benchmark: the output must be more than the input given market prices and an individual’s willingness to bear the costs. For example, if I contributed $400 per year of my income and received $600 per year of services I value, then I would find this plan agreeable.[487]
A close observation of Wicksell’s application of the unanimity principle reveals two significant deviations from Buchanan’s.
First, Wicksell specifies the precise terms of each citizen’s acceptance of a tax package whereas Buchanan insists that specific terms are superfluous because any government is better than no government. He does implicitly suggest that individuals would not consent to a state in which they were worse off than before the agreement, and yet because his agreements are susceptible to manipulation through coercive threats in the case of a failure to settle, he is unable to guarantee that the terms individuals accept are attractive. This departure is surprising given its radical nature. Buchanan’s subjective stance on value leads him to reject Wicksell’s use of shadow prices, evident from public records of transaction histories, to devise tax packages favorable for each individual. Although he looks to Wicksell’s use of unanimity to inform his rationale for government, he rejects its central premise that the agreement that matters is the precise terms favorable to each individual. For Wicksell, terms that citizens would find attractive can be objectively specified by knowing, for example, what the costs of a public service are, how much individuals require, and what those individuals’ costs could be without public access.The second marked departure that Buchanan takes from Wicksell is at first more difficult to identify but is no less radical than the first. Whereas Wicksell’s use of unanimity tracks market-style efficiency in maintaining that all individuals are better off by their own estimation, Buchanan assumes that the existence of unanimous agreement itself indicates the achievement of efficiency. Coleman pinpoints the crucial difference:
These two arguments for the unanimity rule are based on two very different conceptions of efficiency and of the relationship between it and unanimity. Though Buchanan thinks of himself as above all else a Wicksellian, the differences between them may be more impressive than are the similarities. In Buchanan’s argument for the unanimity rule, we infer efficiency from unanimity; in the Wicksell-Lindahl scheme, we establish efficiency and then infer unanimity from it.[488]
In essence, Wicksell’s concept of efficiency is based on an objective, or at least quasi-public, test of whether every individual’s net gain from paying a tax outweighs that individual’s net cost.
Wicksell assumes that this can be decided as a precondition and proxy for agreement; the point at which an individual’s marginal tax rate exceeds that person’s marginal gain from public services is not up to imagination or random judgment. Having sewage and garbage removed has a cost. If this cost is worth it to me, given the alternative of living with removing my own waste, then the public good is efficient for me. If it can be provided to everyone in accordance with this analysis, then the public good is generally efficient.By contrast, Buchanan’s use of the unanimity principle is purely semantic, or analytic: “In the semantic sense, to say that a state of the world is efficient is just to say that it has secured unanimous agreement.”[489] In this alternative view, nothing underlies agreement; it does not track any objectively evident property in the world. Buchanan thus deviates from neoclassical economics in his insistence that there is no external marker of the achievement of market efficiency besides the fact that individuals choose to make the trades they do. He is a fan of neither general equilibrium theory nor the idea that it is possible to discern an individual’s well-being independently from each agent’s subjective account of personal satisfaction.
Buchanan’s principle of unanimity, being more minimalist and less ambitious than Wicksell’s, might seem to be a more certain foundation for a constitutional order. Indeed, given agents’ generally accepted propensity to free ride, a concern at the forefront for Buchanan, Wicksell’s tax scheme might seem to suffer from the fact that individuals will fail to report their honest preferences to sweeten their benefits and lessen their burdens.13 Buchanan anticipates this practical infeasibility of the Lindahl-Wicksell tax plan: citizens will report their preferences, underestimating the value of public goods, and their own marginal rate of return of services in turn for paying taxes.
Buchanan’s minimal constitutional order thus seems to acknowledge that individuals are not motivated to uphold bargains because each will continually press his or her advantage. Holding out and renegotiating, or exhibiting preferences that diminish their actual experience of gain characterizes citizens’ relationships to one another and government. This position coincides with Buchanan’s understanding that the social contract, indeed any contract, necessarily resembles a Prisoner’s Dilemma in which each most prefers unilateral gain if at all possible, and the eventual outcome of an exchange will be determined by the disagreement point set by credible harmful threats. Yet to provide a rationale for his constitutional order, Buchanan appeals to the seemingly obvious fact that all individuals still unanimously prefer mutual cooperation to mutual defection in every PD scenario.We thus return to the observation that for Buchanan’s constitutional order to be attractive, not only must the unanimity principle be meaningful, but it must also be possible to differentiate between an agreement that every government is better than no government and an agreement on an actual tax scheme endorsed by any particular government. Buchanan tries to uphold the power of unanimity in the form that everyone prefers Leviathan to anarchy consistent with neoliberal political theory, but he dismisses the idea that terms deemed favorable to an individual will lead to voluntary adherence to an agreement. What, then, remains intact of the significance of unanimity if it does not serve to indicate that the state to which individuals agree is actually more favorable than other alternatives and results in voluntary participation? Most obviously, it is apparent that unanimous agreement is not, in the lexicon of game theory, strategy proof. Agents may veto arrangements that, though actually favorable, may be leveraged to greater personal advantage through a “hold-out” strategy. One could threaten to defect unless one were permitted to gain more and contribute less, threatening to otherwise ruin a collective venture, specifically if unanimous agreement is a condition for that venture to go forward.
As Coleman explains, even though Buchanan hopes to circumvent the problem of agreement to precise terms in isolating the universal and obvious point that all prefer cooperation to anarchy, the actual practice of agreement is inseparable from strategic maneuvering over the conditions of distribution. Unlike in Wicksell’s tax scheme, the Prisoner’s Dilemma floor of mutual defection itself is subject to coercive threats. This moving floor is the basis for establishing whether individuals are better off in civil society or without, and that particular distributional arrangements may be legitimately coercively enforced.To make the point dramatically, either the benchmark of unanimous agreement is so weak as to suggest that any time individuals join in a collective
1 3 For further elaboration, see Coleman, Markets, Morality, and the Law, 2002, 283-284.
action, they have achieved a mutually favorable basis for social order, or it is so strong that it requires an externally valid indication to check that universal agreement is not merely mass psychosis. For example, if individuals were to dig their own graves, the mere fact of their action serves to indicate that it comports with their preferences; alternatively, if actors jointly jumped off a cliff, then if they had falsely believed in a resulting reward of a heaven on earth, their actions would need to be scrutinized by a shared public benchmark of well-being. Wicksell relies on the latter criterion. However, Buchanan avers that there cannot be any independent means to check that agents are actually efficiently served by the state to which they have agreed. Once the independent test of merit of assent has been rejected, unanimity has no more clout than the suggestion that the existence of a school of fish indicates a universal agreement to swim to a single place at a single time. As we shall see in looking at Posner’s law and economics in Chapter 8, in contemporary expected utility and game theoretic political economy, consent implies no more than showing up. Being at a certain place at a certain time signifies that given one’s options, taking the action to be here now seemed the best choice at the time of decision making.
We may recall that a strength of Buchanan’s position was supposed to be its minimalism that accepts moral skepticism yet searches for an Archimedean point upon which to erect government as a means to secure gains from trade that would otherwise be lost as each seeks to dominate the other. This Archimedean point is the purported obviousness that we are all trapped in a multiparty Prisoner’s Dilemma defined by the mutually and individually preferred hope for joint gain, even given each individual’s not-so-secret hope to sucker all others in the bid to achieve personal success. Buchanan insists on the objectivity of the favorability of mutual cooperation (CC) at the same time that he denies that any particular terms will be behaviorally motivating. Therefore, he approves of the threat of sanctions for any defection, rendering specific terms superfluous. The specific terms that will be enforced are those negotiated on the basis of bargaining strength.