Review 3: Property Rights and the Limits of Democracy, edited by Charles K. Rowley

David Schap,
College of Holy Cross,
Public Choice 82: 193-196 (March 1995)

"First impressions are lasting, though not necessarily permanent. I was struck at the outset by the odd organization of this book: each chapter contains its own table of contents and index; each chapter is separately paginated. The unusual organization is not especially puzzling since the book's front matter indicates that each of the four chapters have been published separately and individually in paperback form. Each chapter bears the same copyright date as the entire volume, so this is not merely a compendium of old work. These superficial observations induce the expectation that each chapter will stand on its own, yet one wonders whether the collected set will be cohesive. Based on first impressions, the question of cohesion lingers and nags a bit. An introductory essay by editor Rowley works splendidly to spark interest in the subject matter. Rowley is an empassioned defender of liberty whose style causes one to want to read on.

One way to appreciate the contents of the book's first chapter is to initially bring to mind the efficiency/equity tradeoff that is the subject of much of welfare economics. Next, substitute liberty for equity. An efficiency/liberty tradeoff is what James M. Buchanan explores in the chapter "Property as a Guarantor of Liberty."

Buchanan of course recognizes - even emphasizes - that the institution of private property can promote both liberty and efficiency at once. He chooses nonetheless in this work to conceptualize liberty as inversely related to the degree that one's welfare depends on the behavior of others. In such a frame-work private property allows one the opportunity to choose to withdraw from market interactions when such withdrawal is valued. For example, ownership of a car permits one to avoid (withdraw from) the vagaries of cab-hailing (market dependence); consequently, car ownership may be undertaken by those who travel seldom despite whatever recommendations flow from a narrowly construed cost-minimization calculation applied to an idealized market for transportation services. Buchanan makes a rather neat empirical observation by linking the value of withdrawal to an asymmetry that exists in the dual role of economic actors in their market interdependence: each actor as a supplier typically has a severely limited repertoire with respect to marketable labor services (plumbers are not carpenters); yet each as a demander has available a multitude of substitutable goods capable of satisfying ultimate consumption desires. Thus, the freedom to withdraw from market interaction that private ownership affords is more valuable to us as suppliers than as demanders.

Gordon Tullock's chapter, Rent Seeking can be variously described as wide-ranging; at times idiosyncratic, polemic, and inconsistent; yet always engaging, learned, and insightful - in short, quintessentially Tullockian! The chapter covers comprehensively the main topics in the rent-seeking literature, highlighting of course Tullock's own substantial contributions. Friends of Public Choice (the Society) will find Tullock's stories recounting rejections of his early manuscripts on the subject of rent seeking to be candid and informative, though other readers may regard the same material as somewhat self-indulgent.

Here follows an example of the kind of anecdotes one finds in this chapter, though this particular one is not found therein. Years ago, while undertaking graduate course work, I came across a working paper entitled "Efficient Rent Seeking". I was troubled by a couple of its passage, whereupon I wrote its author calling attention to my concerns. Professor Tullock replied shortly thereafter, thanking me for pointing out what might otherwise have been an embarrassing typo. Later I was to learn from one of Professor Tullock's junior colleagues that such an admission on his part should be regarded as a major concession! Professor Tullock was kind enough to also write to my professor, calling attention to my industriousness and recommending that I be give a very high grade (though the precise grade to be awarded was not specified by Professor Tullock in his letter). Because of this exchange of letters, to this day I refer to the literature on efficient rent seeking as research begun by Schap (with Tullock)!

Except for my last sentence, the preceding story has grown only slightly through the years with my telling of it. It is now some fifteen or more years later, and I again undertake the task of cleaning up Professor Tullock's typos. In one passage (p. 39) Tullock introduces an equation designed to explain the costs and benefits of voting, and a certain variable is defined as the probability that a prospective voter's information is accurate, which should imply its values range from minus to plus one in value, then the ensuing discussion implicitly treats the variable as ranging only from zero to one in value. If Tullock had been more precise I would have given the matter of information-acquisition no more thought; instead, I was led to ponder the topic and came up with a new thought (as far as I know). Prospective voters never subjectively regard acquired information as being erroneous (a presumably negative value for the information variable) because of cognitive dissonance. This would seem to explain at once two phenomena discussed by Tullock: (1) politics "hobbyists" actively seek to acquire information, even though the act is not cost effective in the decisive-voter model; and (2) "[p]olling information indicates that the more information a person has, the less likely he is to switch from one political party to another" (p. 35). Tullock explains these phenomena by analogy to statistics-hungry baseball fans who always eagerly root for the same team regardless of the content of the statistics. My alternative explanation is that, because of cognitive dissonance, only information that reinforces existing political preferences and prejudices is sought after and allowed to filter into the voter's calculus. Prediction: I am betting that the intersection of the lists of names of individual subscribers (not libraries) to National Review, Reason and The American Spectator exceeds the intersection of any one of the afore-mentioned lists with the subscriber list of The New Republic. Any takers?

And since I have mentioned baseball (or at least Tullock did), I may as well say that cleaning up Tullockian typos brought to mind my story of the great Babe Ruth, who could not be bothered with details, saying "I'll hit'em and you count 'em". Tullock's inconsistencies with some details can be regarded as fallen wheat left to be gleaned by his lessers. Here is another inconsistency that may lead to additional research. At page 28, Tullock recounts a recent episode of log-rolling on road-repair projects in Tucson, with projects bundled to include something for everybody, thus assuring that this "socially desirable or at least very close to socially desirable" package got passed. Later, at page 81, in discussing the merits of the referendum as a check on the legislature, Tullock discusses a Tucson referendum on a collection of street repair and school building projects, which passed though no one item would likely pass individually. He affirms that the referendum works best to restrict rent seeking on a single issue. Concerning log-rolled packages, however, he writes: "Such trade are difficult in referendum though, unfortunately, they are not impossible." Why should we want "socially desirable" packages rendered "impossible"? I am not sure what to make of the juxtaposition of these passages other than to say, if you allow me to mix metaphors and branches of government, that the jury appears to still be out on the topic of the referendum, hence another area for additional research.

By dwelling on two inconsistencies I do not want to give the impression that the chapter is especially flawed, for it is not. On the contrary, it is a well-written, thought-provoking discussion of the multi-faceted topic of rent seeking which I commend to students and scholars of the subject alike.

Richard E. Wagner considers a fundamental question in political economy in "Parchment, Guns and Constitutional Order." Using Wagner's imagery, given that a written constitution is not generally self-enforcing, how does one holster the guns of special interests that are everywhere armed to attack the constitutional order? Many of the issues presented are not new. Indeed, they are the same as those contemplated by the Framers of the Constitution of the United States over 200 years ago. Wagner explains that at that time the received wisdom recognized the inherent sinful nature of man. This vision induced the creation of a government constructed to be, and widely accepted as, no more than a necessary evil. A basic distrust of intrusive government was the prevalent view for the first 150 years of the Republic, a view that helped sustain the constitutional parchment. Today, the notion of sinful man has been swept aside; fallen angels have given way to the risen ape. Conceited modern man, full of "can do" intellectual hubris, shows a remarkable penchant for invoking government to now address a range of problems which in earlier times would have been left to private concerns for fear of obvious untoward consequences of expansive government, never mind its subtle and disruptive unintended consequences. Wagner explains that modern attitudes are at odds with and dangerously undermine the constitutional order envisioned by the Founders.

Though the issues explored by Wagner are not especially new, the presentation of them is novel and enlightening. Moreover, the defense of liberty falls anew on each generation, as Hayek and others have noted. Would that Wagner's essay be read widely by the prideful moderns.

The concluding chapter, "Liberty and the State", is a hard-edged critique of the major works in the social choice literature from a classical liberal perspective. Who better to write this chapter than editor Rowley himself? Having recently compiled eighty-four important articles originally published between 1938 and 1992 into a three volume collection (Rowley, 1993), his erudition fits hand-in-glove the task of critically reviewing the literature. Rowley's classical liberal sympathies are indeed fully disclosed, but would be obvious to readers even without explicit mention. I liked the fact that Rowley applies the same high degree of scrutiny and deft analysis in his review of classical liberal papers as one finds applied to papers emanating from other schools and traditions. His chosen perspective thus appears to inform and guide the analysis rather than cloud or bias it.

So, returning to first impressions, do these individually fine chapters fare well when regarded as integral parts of a unified whole? I think so. All chapters perform as advertised in that they explore various aspects of property rights and democratic processes. They do so with some degree of complementarity and virtually no unsuitable repetition. First impressions notwithstanding, this is one well-executed work deserving widespread readership."