Consensus and Competition in the Work of James Buchanan

This paper demonstrates the previously unrecognised influence of the Italian founders of elite theory – Vilfredo Pareto, Gaetano Mosca, and Robert Michels – upon James Buchanan and the Virginia School of public choice. It demonstrates how Buchanan rearticulated their sociologically framed critiques of political competition in economistic terms, for application to the United States of President Lyndon Johnson’s ‘Great Society’. In doing so it provides an example of ‘economics imperialism’ and the attempt to displace other social sciences as the epistemic frame within which to think about politics. Limiting political competition via constitutional means was Buchanan’s fundamental goal. Previously a neglected figure within neoliberalism studies, recent years have witnessed a new appreciation of his importance to the global effort to insulate market outcomes from political redress. Buchanan and his collaborators formulated their theory during the era of Keynesian demand management, the expansion of the public sector, and increasing welfare spending. By placing public expenditure at the heart of an analysis of the modern state, Buchanan developed the economic framework of public choice theory in an attempt to overturn dominant progressive ideas of pluralism grounded in political science. For Buchanan, unlimited political competition functioned as the motor for the expansion of ‘Leviathan’ – the modern welfare state – as parties made increasingly expansive offers of public support to voters. Equally damaging (and here the influence of the ‘Italian School’ is pronounced) the system allowed organised minority interests to ‘blackmail’ government into serving its sectional interests. The only solution, Buchanan believed, was to limit such competition by insisting that taxation be subject to a ‘unanimity principle’ at the constitutional level. This would require radical amendments to the US Constitution. Having received democratic endorsement, these could henceforth be regarded as establishing consensus over fixed levels of taxation, and the limits of government expenditure. It is within this apparently consensual framework that political competition – now circumscribed – could legitimately play out. In transposing the sociological concerns of the Italian School to the field of economic theory Buchanan hoped to arrive at ‘politics without romance’. Yet in doing so he also eliminated any regard for power from his economic theory of the state. This was intentional, I argue. When his constitutional abstractions ran up against the realities of the deeply unequal 20th century United States, the result would be his desired reversal of that century’s progressive gains. This, however, is by no means an American story alone. The influence of the Virginia School’s restrictive constitutionalism has been felt globally. In the most extreme form in the Chilean constitution established under Pinochet, but also in ‘balanced-budget’ legislation encountered across Europe, and indeed in the constitutionalism that characterises multinational organisations such as the World Trade Organisation and the European Union. Buchanan can indeed be regarded as ‘the quintessential neoliberal thinker of our time’. Establishing the nature of his intellectual formation is critical to an understanding of current debates about the relationship between political competition and consensus.