Economic Theory is a Theory of Collective Choice

Any theory of collective choice must attempt to explain or to describe the means through which conflicting interests are reconciled. In a genuine sense, economic theory is also a theory of collective choice, and, as such, provides us with an explanation of how separate individual interests are reconciled through the mechanism of trade or exchange. Indeed, when individual interests are assumed to be identical, the main body of economic theory vanishes. If all men were equal in interest and in endowment, natural or artificial, there would be no organized economic activity to explain. Each man would be a Crusoe. Economic theory thus explains why men co-operate through trade: They do so because they are different.

The above is a quote from the book The Calculus of Consent: Logical Foundations of Constitutional Democracy, by James M. Buchanan and Gordon Tullock, published in 1962 (available for free at the Online Library of Liberty.)

What’s the book about? Buchanan and Tullock start the introduction to the book with

Political theory has concerned itself with the question: What is the State? Political philosophy has extended this to: What ought the State to be? Political “science” has asked: How is the State organized?

None of these questions will be answered here. We are not directly interested in what the State or a State actually is, but propose to define quite specifically, yet quite briefly, what we think a State ought to be.

Here’s the start of their preface —

This is a book about the political organization of a society of free men. Its methodology, its conceptual apparatus, and its analytics are derived, essentially, from the discipline that has as its subject the economic organization of such a society. Students and scholars in politics will share with us an interest in the central problems under consideration. Their colleagues in economics will share with us an interest in the construction of the argument. This work lies squarely along that mythical, and mystical, borderline between these two prodigal offsprings of political economy. [Emphasis in the original.]

Buchanan is an inexhaustible sources of insight and wisdom in the area of constitutional theory.

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