The choice of efficiencies and the necessity of politics

ABSTRACT

Efficiency requires legislative political institutions. There are many ways efficiency can be promoted, and so an ongoing legislative institution is necessary to resolve this choice in a politically sustainable and economically flexible way. This poses serious problems for classical liberal proposals to constitutionally protect markets from government intervention, as seen in the work of Ilya Somin, Guido Pincione & Fernando Tesón and others. The argument for the political nature of efficiency is set out in terms of both Pareto optimality and aggregate welfare maximisation, and similar arguments can be generalised to other social values.

KEYWORDS:

• Efficiency
• constitutionalism
• circumstances of politics
• markets
• Ilya Somin
• classical liberalism

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Correction Statement

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Notes

1. There is of course an alternative, non-instrumental way of arguing for restricting democratic interventions in the marketplace: the natural rights tradition exemplified by Nozick, 1975. I do not claim to rebut this non-instrumental argument here; however, I note that this version of classical liberalism has receded from prominence in recent decades.

2. See also Pennington, 2003; These arguments are briefly mentioned in Somin, 2013, p. 185.

3. For critique see O’Neill, 1998.

4. Waldron 1999 makes a closely related distinction between two tasks for political theory: ‘theorizing about justice (and rights and the common good etc.), and theorizing about politics.’ p. 3.

5. The historical shift in welfare economics was in the opposite direction, from aggregate welfare to Pareto-optimality. The classic text is Robbins, 1935. This shift was motivated by the problem of interpersonal comparisons of utility, which I set aside here.

6. See among others J. Brennan, 2016; Caplan, 2011, pp. 197–199; Estlund, 2009, Chapter 11; Landemore, 2013.

7. Caplan 2011 heads in this direction, pp. 199–201.

8. This is the implication Somin 2013 begins by considering, before he moves on to constitutionalised restraint, pp. 150–151.

9. Somin shows some recognition of this problem, e.g. 2013, p. 124. However, he does not explore it further.

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Notes on contributors

Michael Bennett

Michael Bennett is a postdoctoral researcher at Utrecht University, with a PhD from the University of York. He works on the political theory of markets, democracy and corporate governance.