Trading Equilibrium and Direct Production

Economists who are familiar with the geometrical construction of figure 4.1, and the underlying postulates, will recognize that the minimal restrictions imposed on the locations and shapes of the indifference contours do nothing toward insuring that a final post-trade position where all gains are exhausted will be coincident with the origin, which describes the allocation or result that would obtain in the absence of all defense and predation effort. This direct-production position, in which...

Public Choice of Punishment

The formal analysis of efficient law enforcement has been developed in some detail by several modern economists, and this analysis need not be elaborated here.8 In the elementary discussion of the preceding sections, punish 8. See Gary Becker, ''Crime and Punishment An Economic Approach,'' Journal of Political Economy 76 (March April 1968) 169-217 Gordon Tullock, The Logic of Law (New York Basic Books, 1971) George Stigler, ''The Optimum Enforcement of Laws,'' Journal of Political Economy 78...

Personal Loss Functions and Procedural Norms

Governmental decision-making in its operative form departs from volunta-ristic contracting, despite the contractarian basis for the state's productive role. Indeed the relative efficacy of governmental institutions in providing genuinely public goods and services is presumed to stem from the cost-reducing impact of allowable departures from strictly voluntaristic negotiations. But, in their turn, these departures guarantee that some participants in almost every decision will be coerced into...

Man as Rule Maker

Man looks at himself before he looks at others. The individual recognizes, and acknowledges, that he is neither saint nor sinner, either in existing or in extrapolated society. Man adopts rules. The rule-maker explicitly and deliberately imposes constraints upon himself in order to channel his own expedient behavior toward rationally selected norms. No one could claim that Robinson Crusoe is not free yet a rational Crusoe might build and set an alarm clock, a device designed deliberately to...

Majority Voting under Benefit Cost Constraints

We move somewhat closer to reality when we drop the assumption that collective action requires unanimous consent of all participants. As suggested, under a genuine unanimity rule, individual decisions can keep government under effective controls. Things become quite different, however, once any departure from unanimity is introduced. When the costs of securing agreement are acknowledged, departures from true government by consent be come necessary if the political community is to function as a...

From Small to Large Numbers

Before proceeding from the two-person to the n-person model, it is perhaps useful to summarize the conceptual schemata that has been developed. From a 2. constitutional contract is negotiated, from which, in turn, 3. postconstitutional contract becomes possible, through a. private-goods trade (goods rival in consumption) and or b. public-goods trade (goods nonrival in consumption). When we introduce a large number of participants, negotiations may take place among subgroups or coalitions...

Commonality and Noneconomic Interaction

The dependence of efficient trade upon a delineation and identification of individual rights is revealed most clearly in the case of fully partitionable private goods. It should be evident that the requirements for mutually accepted definitions of structure need not be so restricted. Consider facilities that may, due to either technological necessity or social decision, be accessible to all members of the relevant group. Mutual agreement on the behavioral limits with respect to the use of such...

Enforcement of Putative Contract

In the productive state that provides and finances public goods and services, costs of agreement dictate that decisions binding on all members of the community be made by some subset of the putative parties in contract. Once made, however, these decisions must be enforced just as those reached by negotiations among persons in genuinely voluntary interactions. To enforce its decisions, the productive state must call on its complement, the protective state. To the individual citizen who may...

The Anarchist Utopia

To the individualist, the ideal or utopian world is necessarily anarchistic in some basic philosophical sense. This world is peopled exclusively by persons who respect the minimal set of behavioral norms dictated by mutual tolerance and respect. Individuals remain free to ''do their own things'' within such limits, and cooperative ventures are exclusively voluntary. Persons retain the freedom to opt out of any sharing arrangements which they might join. No man holds coercive power over any...