Schools of western economic theory.

James buchanan Gordon Tulok

In the United States in the early 1960s, the public choice school represented by james buchanan and Gordon Tulok was formed as a new tributary school in the development of western economics. They put the analysis of economic problems in the field of political science research and successfully studied many problems in political activities with economic theory. For example, analyze the behavior characteristics of political individuals (voters and politicians) closely related to us in real life and the behavior characteristics of political groups derived from it; Through the analysis of economic man, this paper explains why bureaucracy is widespread in government departments, government policies will deviate repeatedly for other government reasons, and social resources will be wasted. Therefore, the failure of the political system explains the bankruptcy of the market system.

(A) an overview of the choice of public schools

1, the reason and process of the establishment of public choice college

Before 1930s, traditional economics described a perfect world, in which perfect competition and market system could automatically make social resources effectively and optimally allocated. However, the crisis in 1930s broke the wonderful illusion of omnipotence of the market in traditional economics, and made people generally realize the defects of the market system. Since then, mainstream economists headed by Keynes have regarded the government as a reasonable regulator and intervener of the market system as their fundamental creed. However, with the strengthening of government intervention in the market, the limitations and defects of government intervention are increasingly exposed, and the government's fiscal deficit is increasing day by day. Inevitably, a large number of government expenditures will fall into the pockets of special interest groups, and the government's social welfare plans will fail one after another, and the economy will stagnate and expand. Buchanan and others founded the theory of public choice to overcome the limitations and defects of government intervention. In Buchanan's view, government intervention, like the market system, has limitations and defects, and excessive dependence on government intervention will also have unsatisfactory consequences. In order to make up for the defects of market system and government intervention, it is necessary to conduct economic research on non-market decision-making and improve the shortage of market exchange with corresponding political system.

Buchanan believes that political system is like market system, politicians are like entrepreneurs, citizens (voters) are like consumers, electoral system is like trading system, and votes are like money. Because there are many similarities between political system and market system, many principles of economics can be used to analyze political decision-making behavior. In the political market, people establish a contractual exchange relationship, and all activities are based on personal cost-benefit calculation. As the main body of exchange behavior, the government is as rational and selfish as the economic man, pursuing the best interests of the group, while citizens or voters are based on the calculation of personal costs and benefits. In this way, when ordinary voters can't pay the cost, they don't vote, so the government is often manipulated by decision makers representing special interest groups, which breeds various economic and political disadvantages. Therefore, Buchanan believes that the difficulties faced by modern western society are not so much the bankruptcy of the market system as the failure of the political system. Therefore, the challenge facing modern society is not the challenge of market system, but the challenge of political system. Buchanan pointed out, "We should invent a new political technology and a new way to show democracy, which will control the spread and growth of bureaucratic privileged class." It is also based on this need that Buchanan founded the theory of public choice.

The School of Public Choice originated in the early 1960s and is located in Thomas Jefferson Center, University of Virginia, Virginia, USA. American scholars Warren Nutt and james buchanan founded the center in 1957, with the initial purpose of studying political economy and social philosophy, with special emphasis on the study of social order based on individuals.

1963, Buchanan and another scholar, Gordon Tulok, established the Committee on Non-market Decision-making System in Charlottesville, Virginia, aiming at promoting people's research on non-market decision-making economic theory. Subsequently, the collection of essays on non-market decision-making was published. At first, the publication of this anthology did not cause any repercussions in society. From 1966 to 1968, the "non-market decision-making committee" was renamed "Public Choice Association", and Public Choice magazine was officially edited and published. At this time, the relevant research results began to be concerned by the academic circles of economics and political science.

The whole 1960s was the period when Keynesian theory was dominant. The academic research activities of Buchanan and Tulok were interfered by their University of Virginia, because they were too different from the mainstream thoughts of economics at that time. The Thomas Jefferson Center and the economics departments of Professor Buchanan and Professor Tulok were criticized by the school as "1rigid single view of extreme conservatism in the 9th century". 1968, Buchanan and Tulok were forced to leave the University of Virginia and transferred to UCLA and Rice University as professors of economics and political science, respectively, and the Thomas Jefferson Research Center was automatically dissolved.

Although the research of Buchanan's public choice theory was interrupted due to his forced departure, during the period of 1957- 1968, the public choice theory achieved great success. On this basis, Buchanan and Tulok reunited at Virginia Tech in 1969, and founded the Public Choice Research Center on the basis of the Public Choice Research Association. Since then, in 10, public choice theory, as a new school of political economy, not only attracted the attention of American academic circles, but also appeared in Europe and Japan. Blacksburg, where the Public Choice Research Center is located, has therefore become a holy place for scholars studying public choice theory all over the world-"Mecca". 1983, Buchanan was transferred to George Mei Sen University in Virginia as a professor of economics, and in the same year, the Public Choice Research Center also moved to the school. At present, George Mei Sen University in the United States is known as the base camp for economists who gather in the School of Public Choice. The theory of public choice has not only attracted the attention of economists in western countries, but also attracted the attention of some developing countries in the process of reform and development.

2. The main representatives of public choice school and their works.

James buchanan and Gordon Tulok are the founders of public choice theory, and they are the co-founders of the Public Choice Research Center. Because they use the tools and methods of economics to analyze political phenomena and expand the new field of economic science research.

Buchanan is a famous American economist, the founder of public choice theory, and the professor and general manager of the Center for Public Choice Research at the University of Virginia in Blacksburg, USA. 19 19 was born in Murfreeball, Tennessee, USA. 1940 obtained the bachelor of science degree from the University of Tennessee. 194 1 obtained a master's degree in literature, and 1943 obtained a doctorate in philosophy from the University of Chicago. From 65438 to 0955, he went to Italy to study the tradition of European public finance, which laid the foundation for the theory of public choice. 1956- 1968 used to be MacIntyre chair professor and director of economics at Thomas Jefferson Center for Political Economy, University of Virginia. 1962 co-founded the public choice society with Tulok and others. 1963- 1969 Professor of Economics, UCLA. 1963 is the president of the southern economic association, 1969 is the professor and director of the public choice research center of Virginia Tech and George Mei Sen University. 1972 vice president of American Economic Association. From 65438 to 0980, he was a member of the Executive Committee of Monte Pellerin Association.

Buchanan's works mainly include: Individual Voting Choice and Market (1954), Calculation of Consent: Logical Basis of Democracy in the Constitution (1962), Externality (1962) and Public Finance in the Democratic Process (65438). Public Choice Theory: Political Effects of Economics (co-authored with tolson, u72), Limits of Freedom (1975), Freedom in Constitutional Contract (1977), Deficit Democracy: the Political Legacy of Sir Keynes (co-authored with Wei Gena, 65438).

Buchanan's outstanding theoretical contribution is to combine the analysis of political decision-making with economic theory, and apply the extended economic analysis theory to the structural choice of social-political rules and institutions. On the basis of analyzing the political decision-making structure, he criticized Keynes's macroeconomic policy, expounded the opportunity cost theory and criticized the post-Keynesian public debt theory. Buchanan was awarded the Nobel Prize in Economics by the Swedish Academy of Royal Science in 1986 because he was the most important founder, main disseminator and one of the outstanding contributors of public choice theory.

3. Methodological characteristics of public choice school.

The public choice school uses "rational economic man" to analyze all kinds of disadvantages in political market exchange. In the process of analysis, the methodology adopted has its uniqueness. Its performance mainly has three aspects:

(1) The methodology of individualism. This methodology holds that all human behaviors, whether political or economic, should seek the reasons from the perspective of individuals, because individuals are the basic cells that constitute a group, and the collection of individual behaviors constitutes a collective behavior.

The so-called individualism analysis method means that economics takes the analysis of individual consumers' selfish motives, personal preferences and personal budget constraints as the starting point to investigate the influence of these factors on consumption activities. Before the emergence of public choice theory, traditional political science theory also had individualistic methodology. When investigating group behavior, the traditional political viewpoint is to regard the group as an inseparable organism and analyze its political behavior and social behavior from the overall perspective; When analyzing a country, it usually regards the country as the only decision-making unit representing the whole society, and the national interests and public interests are completely independent of personal interests. The individualism methodology of public choice school is completely opposite to the concern of traditional political science. It regards the individual as the basic unit of decision-making, and the individual is the only final decision-maker, which is applicable to both group behavior and individual behavior.

(2) The analysis of economic man hypothesis reappears in political science. Economics believes that as a person, no matter where he is, human nature is the same, and the most basic motivation is to pursue the maximization of personal interests and personal satisfaction. This assumes that everyone has the characteristics of an economic man. This assumption reflects the basic characteristics of human behavior and is the statistical characteristics of all individuals in society.

For a long time, economists who analyze market operation have obtained a series of meaningful economic results based on the hypothesis of economic man. Buchanan believes that through similar behavioral assumptions, we can also make some basic predictions about the structural characteristics of collective choice. Its theoretical value lies in: ① ensuring the consistency of human behavior analysis. Prior to this, political scientists and economists used two completely opposite standards when analyzing human behavior. In the field of market choice, economists assume that everyone is self-interested; In the field of political choice, the same people have become altruists of "charity and fraternity". ② Comparative analysis of systems. The purpose of comparative analysis of institutions is to examine under what circumstances and under what system may the worst policy result be produced? How to avoid it? And discuss what kind of system will be the best. If everyone is assumed to be an altruist, there will be no bad system and no explanation for the bad policies we can observe in reality.

(3) The study of political science should conform to the analysis of transaction characteristics in economics. Buchanan believes that the basic proposition in economics is not "choice", such as consumers choosing the most favorable consumption combination and producers choosing the most favorable production combination, but exchange, that is, exchange between different economic individuals (producers and consumers). The same is true in the field of political activities. The important propositions are not associations, political parties and countries, but a series of transactions between these groups and individuals who form groups for self-interest motives. Efficient policy results do not come from the mind of a political leader or a mysterious figure, but from the political process of bargaining, compromise and adjustment between groups or individuals who form a group.

Based on this basic proposition, Buchanan emphasized that the core issue of economics should not be the scarcity of resources and the efficiency of resource allocation, but the origin, nature and system of exchange. To do this, people's attention will naturally turn to an efficient market supervision order.

More importantly, the analysis centered on exchange has been extended to the process of political activities and political decision-making, and then two important changes have taken place. The purpose of political activities has changed. People used to think that collective activities were basically unprofitable, so the task of the state was mainly limited to the minimum guarantee for the normal operation of the market order. But this does not explain why government actions can sometimes produce some good things that are beneficial to society, such as national defense and education system; Nor can it explain why economic men who are self-interested in the economic market become indifferent to personal interests as soon as they arrive in the political field. According to the public choice school, people's participation in political activities is not for the pursuit of super-individualistic social goals such as truth, goodness and beauty. The main difference between economic market and political market is not that people pursue different goals, but that people choose different methods when pursuing personal interests. Politics is a complex transaction structure between people. Through this structure, people hope to achieve their different personal goals, which can not be effectively achieved in the simple market transaction process, and can only be completed in the form of groups. Without individual interests, there will be no collective interests, and the pursuit of individual interests is the premise and guarantee for realizing collective interests. ② Voluntary cooperation in political activities. In the past, the state was regarded as selfless, but now it is regarded as a market for political activists to trade. Like the economic market, the premise of trading is the voluntary cooperation between traders, and people can also benefit from political trading. Although there is a certain compulsion in the political market, especially when the majority rule is adopted, the collective decision-making result is mandatory, but as long as everyone has the freedom to choose, cooperate and not cooperate, the compulsion of political choice will not affect the common interests of all parties to the transaction.

From this analysis, we can see that the methodological feature that runs through the theory of public choice is that political activities, like economic activities, follow the principles of economic egoism and free trade and cooperation. The role of the state is only to ensure people's freedom through the formulation and implementation of rules.

(B) the main content of public * * * selection theory

1, the basic meaning of "the theory of public election"

What is the theory of "open election"? Buchanan explained: "The theory of public choice is just an effort to clearly put forward the general theory of public economy, which can help us to do what people have done for a long time in market microeconomics in collective choice, that is, to supplement the theory of production and exchange of goods or services with the corresponding theory of political market operation as appropriate as possible. This theory is such an attempt. It is necessary to establish a model to simulate today's social behavior, which is characterized by adopting different ways to deal with the process of human decision-making according to whether individuals are active in the economic market or the political market. All traditional models regard economic decision-making as an internal change of the system and political decision-making as an external factor, and people refuse to discuss the law and generation of these external factors. In this case, the purpose of public choice theory is to re-integrate two aspects of human behavior into a single model, which notes that the person who bears the results of government decision-making is the person who chooses these results. " This expression contains the following three meanings:

(1) public * * choice theory is a general theory of public * * * economy. For example, the provision of public goods by the government is a public economic problem. It should help people make reasonable collective or public choices in the political market. Collective choice behavior, especially the collective choice problem of some behaviors of governments at all levels related to external effect management and public goods supply, is exactly the question answered by public choice theory.

(2) The basic feature of public choice theory is to discuss how the behavior of economic man determines and dominates the collective choice behavior in the political field, especially the restrictive effect on the collective choice of government behavior, with the hypothesis of economic man as an analytical weapon. This proves that it is possible to have defects in the political market field.

(3) The purpose of public choice theory is to bring human behavior in the market system and government behavior in the political system into the same analysis track, that is, the economic man model. So as to correct the theoretical defect that traditional economics puts the political system outside the economic analysis.

Buchanan claimed that we are not trying to challenge the principle of state intervention, but to make modern people realize that if the market is an extremely imperfect wealth distribution institution, then the state is not without shortcomings. What we want to do is to apply the methods used to investigate the defects and mistakes of the market economy in the past 25 years to all sectors of the state and public economy. This is not to restore the dualism of good and evil, that is, to expose "evil" countries and praise "moral" markets, as people did in the past and now, but only to add a little meaning and realize that market solutions are indeed more expensive than public intervention solutions before choosing countries. The fundamental purpose of public choice theory is not to show that any government intervention is justified after investigating some defects of the market, but to reduce the defects of the state structure to the minimum as far as possible through the study of government decision-making behavior, so as to make up for the lack of economic market operation by the harmonious operation of the political market.

2. Analysis of personal choice in economic market and political market.

In order to get rid of the traditional state theory, Buchanan explained human behavior, especially government behavior, from the perspective of human's "self-interest".

(1) The dilemma of the theory of economic man and state. Traditional economics is separated from political credit, and their analysis of economic behavior and government behavior belong to two different conceptual systems. The former takes the cost-benefit analysis of "economic man" as the only tool, while the latter takes the state's representation of social interests as the starting point to draw a rational conclusion of state behavior. In response to this view, Buchanan pointed out: the country is not created by God, and it has no omnipresent correct talents. Because the country is still a one-person organization, the people who make decisions here are no different from others, neither better nor worse, and these people will make mistakes. Therefore, the national political theory based on moral myth will fall into a difficult predicament as soon as it meets the practical problem of "economic man". Therefore, "we must get rid of the economic man driven by egoism and narrow personal interests on the one hand, and the logical fiction of the extraordinary country on the other hand, and apply the method of investigating the defects and faults of the market economy to all departments of the state and the public economy." In this way, all analysis has the same origin: economic man-when people have to choose among several options, they will be more willing to choose the method that can bring them more benefits. Behind this is always the calculation of the cost and benefit of this choice, whether it is clear or vague. When this premise is applied to the analysis of economic market and political market, we will find that its consequences are completely different.

(2) Comparison of personal choice between economic market and political market. Economic market is a transaction structure composed of demand and supply. As a supplier, producers provide goods and services to the market, and as a demander, consumers (including individuals and enterprises) go to the market to buy the goods and services they need. After bargaining, the supply and demand sides finally clinched a deal at a price and quantity level satisfactory to both sides.

Similar to economic market, political market refers to the place where people have relations with other political individuals and organizations when they participate in political activities. It is also composed of supply and demand. The demanders are voters and taxpayers, and the suppliers are politicians and government officials. Politicians and government officials have the responsibility to provide a certain amount and quality of public goods to the society. Voters and taxpayers get public goods and pay certain taxes. As for the specific types, quantities and taxes of public goods, they are "bargained" through the election process. Every participant in the political market, whether voters or politicians, must first calculate personal costs and benefits when making a choice. If the benefits of a collective decision are greater than the actual costs he needs to bear when he votes yes, then he will support the decision. Otherwise, we will not support or even oppose it.

In the final analysis, the similarity of transaction structure between political market and economic market depends on people's self-interest nature. Because interest restriction is the ultimate form of restricting human behavior, politicians in the political market must imitate the behavior of helping people in the economic market and appear as economic people. Although human nature determines that political people and economic people have similarities in their choices in different markets, the differences in the operating characteristics and the characteristics of the goods supplied by political markets and economic markets lead to the differences in personal choices in the two markets. It is manifested in the following aspects:

First, the result of personal choice in the political market is uncertain relative to the economic market. Because in the political market, the choice of a single selector is inconsistent with the final decision-making unit. Here, although a single selector is also a unit that makes choices, it is usually not the individual but the collective that makes the final decision. The selection unit and the final decision-making unit of the economic market are a unified carrier, that is, individuals. Therefore, relative to the economic market, the political market is uncertain.

B, personal choice in the political market has social participation, and personal choice in the economic market has non-participation or non-sociality. That is to say, in political choice, individuals in the political market can not only easily realize that their voting behavior will have a certain impact on the final collective choice, but also clearly feel that they are participating in social decision-making activities. In the choice of economic market, an individual usually cannot change the price and range of available commodities, and it is difficult to directly feel the influence of his personal behavior on other people's behavior and the allocation of economic resources in the same market. Because their social participation degree and participation consciousness are different.

C, in the political market, the degree of correlation between responsibility and loss is not great, but in the economic market, responsibility and loss are directly related. That is to say, in the political market, from the collective point of view, individual voters choose as part of the overall behavior, and the final decision-making result does not depend entirely on an individual voter, but on the statistical nature of the behavior of all voters as a collective. Therefore, because individual voters generally don't pay much attention to the gains and losses brought by collective choice, in the political market, the responsibility of individual selectors is separable, and sometimes even absolutely divorced from their responsibilities.

D, in the choice of political market, public goods and the votes held by a single selector are completely inseparable. In the choice of economic market, private goods and services are completely separable from the money invested by individuals to buy goods and services. So the difference of this optional object will bring two different consequences. In the political market, individual voters can neither divide their votes into several parts and put them on different public products, nor can they choose a specific plan while choosing another one properly. In the economic market, the consumer's choice of a certain commodity and service does not completely exclude his demand for another commodity and service.

E, the choice in the political market is inherently mandatory, and the individual choice in the economic market is completely voluntary, and the selection process is completely consistent with the result. Because in the political market, the process of choice is separated from the result of choice, and individual choice is only a part of the whole collective choice, even a very small part. When individual preferences are inconsistent with collective statistical preferences. The result of individual voting in favor will eventually be rejected by collective preference. Therefore, in the choice of political market, although the individual selector is in an equal position before entering the market, one person, one vote, but the final position of the individual selector in the process of political choice is unequal, so the choice in the political market is inherently mandatory.

3. An important analysis of the new national economic theory: the theory of government failure.

"Government failure theory" is the most important theoretical research field of the new national economic theory.

The so-called "government failure" means that the activities of the state are not always as "effective" as it should be or theoretically said. In Buchanan's view, as the guarantor of common interests, the role of the state is to make up for the deficiency of the market economy and make the social effects of decisions made by economic personnel higher than those made by the state before. Otherwise, the existence of the country has no economic significance. However, government decisions often fail to achieve this goal, and some policies have the opposite effect. They weaken the social "positive effect" of state intervention, that is, the policy effect weakens rather than improves social welfare. So a question is raised: Why do some public actions have "negative effects" on society instead of "positive effects"? What is the reason for this problem? What are the defective departments? How to make up for these defects in the determination of the system? Buchanan's answers to these questions constitute the new national economic theory of the public choice school.

(1) An analysis of three government modes that determine the motivation of government behavior. Buchanan summarized three hypotheses about government behavior before the emergence of public choice theory into three different models.

The first model can be called charity model. This kind of government regards social interests as its own interests and maximizes social interests-that is, maximizes the welfare of the whole people-as its own policy goal. At the same time, it can maintain an absolute authority without any constraints. Buchanan believes that this model only exists in normative economic theory, because it excludes the role of political factors such as public choice, so it is absurd to analyze the economic behavior of western governments in theory and will inevitably end in failure in reality.

The second mode is called behemoth mode. Buchanan compared the second model to a giant with independent interests. Under this model, the government's goal is to maximize its own interests, such as the maximization of fiscal revenue, in order to meet the needs of government officials' life and power. Buchanan analyzed this, although this is an extreme form of government power expansion, but at least it shows that it is necessary to give legal restraint and supervision to the government's economic behavior.

The third model is the democratic model. Buchanan assumes that all members of society participate in political decision-making through votes, and the economic behavior of the government is directly restricted by democratic voting, so the orientation of government decision-making is often subject to the decisive factor of public choice. According to the starting point of "economic man", Buchanan believes that even that kind of "giant" is more realistic than a benevolent autocratic monarch, and the government of modern capitalist countries is actually between the democratic model and the giant model.

Buchanan's model of government division of labor laid a foundation for future analysis of government behavior. It is under this premise that Buchanan led the new state theory to a deeper level.

(2) Inefficiency of government policies and government agencies. The so-called inefficiency means that the implemented policy is not optimal, in other words, this policy cannot guarantee the optimal allocation of resources. Theoretically speaking, American government policies can be divided into three categories: one is policies formulated by relevant government departments and finally decided by voters, such as the adjustment of major tax policies and the formulation of foreign policies that have a significant impact on the country's future. The second category is the scheme drawn up by senior government leaders, such as the scheme drawn up by the federal government or local state governments. The third category is the policies independently formulated and implemented by government departments. The rationality of such policies is usually guaranteed by the Constitution and other laws and regulations, and the responsibility of government departments is to act according to the rules. Here, we only take the way of formulating the third kind of government policies as the object of investigating the inefficiency of policies.

As far as the policies independently formulated and implemented by government departments are concerned, the policies followed by each government department or public utility department are usually decided by department leaders according to their own understanding of common interests. Therefore, on the one hand, politicians in these departments have considerable freedom in their actions, and they are consciously or unconsciously influenced by their own economic motives. Therefore, their understanding of common interests is often difficult to meet the public interest. On the other hand, due to the flexibility of departmental politicians' behavior and the strong stimulation and restriction of their self-interest motives, their behavior actually does not tend to serve the maximization of common interests. Instead, we make decisions based on the information we have obtained and the principle of maximizing personal utility. Buchanan believes that the external cause of this kind of government behavior is the lack of a restraint mechanism to restrain government behavior. If the restraint mechanism cannot provide a benign pressure to ensure that no one can seek too much personal gain when he is in a privileged position, then no matter how noble the consul is, there is no guarantee that the public interests will not be harmed intentionally or unintentionally by others or their successors. It is in this sense that the public choice theory emphasizes that the power to increase social welfare and ensure equality for all should not be handed over to a privileged institution or class casually, and then wait for the gift of this privileged institution or class devoutly. The rational approach is to make these privileged institutions or privileged people be bound by a hard binding mechanism, and citizens really have the final decision-making power of the binding mechanism rather than formally.

After analyzing the inefficiency of government policies, Buchanan analyzed the reasons for the inefficiency of government agencies. In his view, there are three reasons for its inefficiency: ① Inefficiency caused by lack of competition. In the United States, representatives directly elected by voters account for only a small part of the total number of government workers. For example, leaders at the national and state levels, such as the president, vice president, governor and deputy governor, and members of the Senate and House of Representatives who supervise these leaders are directly elected, while leaders of other departments are appointed by leaders at the national and state levels and recognized by the corresponding Senate and House of Representatives. Because department leaders are closely related to elected representatives, they will not be fired because of inefficiency, so there is no pressure to work efficiently. In addition, because the restriction system that restricts the personal activities of politicians is not for profit, and there is no competition between departments that provide public services, the freedom of government officials is much greater than that of private enterprise managers, and too much freedom makes them have no motivation to work hard. It can be seen that there is no competitive pressure vertically (step by step appointment) and horizontally (between departments). ② There is no motivation to reduce costs. Objectively speaking, most activities of government departments do not calculate the cost, even if the cost is calculated, it is difficult to be accurate, which makes the supply of public goods in government departments exceed the amount needed for the optimal distribution of social wealth, leading to the waste of social resources. Compared with private monopoly, this oversupply is equivalent to a disguised collective subsidy paid by the public to some privileged classes, and the cost of collective subsidy is ultimately borne by taxpayers.