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Abstract
This article considers public choice theory as a component of the New Right critique of Keynesian social democracy in the 1960s and early 1970s. More specifically, it details the nature of the challenge it posed to the conception of public bureaucrats, public bureaucracies and the ethos of public service that informed the Keynesian social democratic agenda and discusses its dissemination through think-tanks and other media. It also assesses its consequent impact and legacy, arguing that public choice theory struck at the heart of Keynesian social democracy and left a legacy more profoundly destructive in this regard than either monetarism or Austrian economics.
Acknowledgements
I would like to acknowledge the helpful comments and criticisms of three anonymous referees who reviewed an earlier draft of this piece and also the comments of Alan Finlayson of the Department of Politics and International Relations, Swansea University, for a helpful interchange of views on the social democratic response to public choice theory.
Notes
[1] Though the critical response of Enoch Powell, Geoffery Rippon, Angus Maude, John Jewkes and, at a more profound philosophical level, Michael Oakeshott should not be forgotten. It should also be noted that not all historians accept that such a consensus existed. See, for example, CitationZweiniger-Bargielowska, Austerity in Britain, Controls and Consumption, 1939–55. However, this article is not dependent upon taking a position on this issue.
[2] CitationSchumpeter, Capitalism, Socialism and Democracy, 134.
[3] CitationSchumpeter, Capitalism, Socialism and Democracy, 131–3.
[4] CitationSchumpeter, Capitalism, Socialism and Democracy, 206 (my emphasis).
[5] CitationSchumpeter, Capitalism, Socialism and Democracy, 207.
[6] CitationSchumpeter, Capitalism, Socialism and Democracy, 211.
[7] CitationWeber, Economy and Society, 1393.
[8] CitationWeber, Economy and Society, 974.
[9] CitationWeber, Economy and Society, 958–9, 973.
[10] CitationWebb and Webb, A Constitution for the Socialist Commonwealth of Great Britain, 149 (my emphasis).
[11] CitationWebb and Webb, A Constitution for the Socialist Commonwealth of Great Britain, 302.
[12] CitationWebb and Webb, A Constitution for the Socialist Commonwealth of Great Britain
[13] CitationWebb and Webb, A Constitution for the Socialist Commonwealth of Great Britain, 211–12.
[14] CitationHarling, The Waning of ‘Old Corruption’, the Politics of Economical Reform in Britain, 1779–1846.
[15] For a short discussion of the growth of that professional expertise, see CitationEvans, The Forging of the Modern State, Early Industrial Britain, 299–305.
[16] See, for example, CitationCollini, ‘Hobhouse, Bosanquet and the State’, 86–111.
[17] Citationvon Mises, Bureaucracy, 1, 44.
[18] CitationDowns, Inside Bureaucracy, 253.
[19] CitationNorthcote Parkinson, Parkinson's Law, the Pursuit of Progress.
[20] CitationBuchanan, ‘Towards Analysis of Closed Behavioral Systems’, 14.
[21] CitationTullock, ‘Economic Imperialism’, 10.
[22] CitationTullock, Seldon and Brady, Government, 5.
[23] CitationTullock, ‘Public Choice Theory’, 1144.
[24] ‘State employees are often men of high ability and impeccable integrity’, Seldon, ‘Whose Obedient Servant?’, 246.
[25] Tullock, ‘The Vote Motive: An Essay in the Economics of Politics’ in C. Rowley (ed.) The Economics of Politics, Selected Writings, vol. 4, 192; see also CitationBuchanan et al., The Economics of Politics, 4.
[26] Seldon, ‘Preface’ to Tullock, ‘The Vote Motive’ in The IEA, the LSE and the Influence of Ideas, Collected Works, vol. 7, 251; Tullock, et al., Government, 55.
[27] Tullock, The Vote Motive, 194.
[28] Tullock, The Vote Motive, 195.
[29] Tullock, ‘Public Choice’, 1043.
[30] CitationNiskanen et al. , Bureaucracy, 23.
[31] CitationNiskanen et al. , Bureaucracy, 27.
[32] CitationSeldon, ‘Whose Obedient Servant?’, 254.
[33] CitationBuchanan et al., The Economics of Politics, 11.
[34] On this see, for example, Seldon, Charge in Introducing Market Forces into ‘Public Services’, Collected Works, vol. 4, 10 and also Seldon, ‘The Essence of the IEA’ in The IEA, the LSE, 4.
[35] The bureaucrats ‘output cannot be evaluated directly or indirectly on any markets by means of voluntary quid pro quo transactions, regardless of whether or not most of the output of the organization he works for is so evaluated’. Downs, Inside Bureaucracy, 26.
[36] In a sense, the argument here is the same as that deployed by writers like von Mises and Hayek in the socialist economic calculation debate of the 1920s and 1930s—a parallel sometimes drawn by public choice theorists themselves—see CitationTullock, The Politics of Bureaucracy, 124.
[37] Arrow raised this problem in CitationArrow, Social Choice and Individual Values.
[38] Seldon, ‘Whose obedient servant?’, 245. ‘In general, the constraints put upon people's behaviour in the market are more “efficient” than those in government, with the result that individuals in the market are more likely to serve someone else's well-being when they seek to serve their own than they are in government’, Tullock, The Vote Motive, 175.
[39] Robinson, ‘Introduction’, Introducing Market Forces, ix.
[40] Hall, ‘The State’, 24. On this theme see, for example, CitationLevitas, ‘Introduction’, 12.
[41] Seldon, ‘Workers Reject State Welfare’, The State is Rolling Back, 191.
[42] Tullock, The Politics of Bureaucracy, 12.
[43] Tullock, The Politics of Bureaucracy, 70.
[44] Seldon, ‘Tory Advance, Reluctant Officials’, The State is Rolling Back, 214.
[45] Tullock, The Politics of Bureaucracy, 22.
[46] Tullock, Government, 15.
[47] Tullock, The Politics of Bureaucracy, 22.
[48] Ibid, The Politics of Bureaucracy, 23.
[49] Tullock, The Vote Motive, 199.
[50] Tullock, The Politics of Bureaucracy, 160.
[51] Tullock, The Politics of Bureaucracy, 161.
[52] Tullock, The Politics of Bureaucracy, 168.
[53] The idea is developed more fully in his Bureaucracy and Representative Government. CitationNiskanen worked in the US Defence Department from which experience the central themes of this volume were distilled.
[54] Tullock, The Politics of Bureaucracy, 119.
[55] Tullock, The Politics of Bureaucracy, 119, 193.
[56] C. Rowley, ‘Introduction’, The Rent Seeking Society in The Selected Works of Gordon Tullock, vol. 5, xi.
[57] Tullock, ‘Rent Seeking’, The Rent Seeking Society, 19.
[58] Tullock, ‘Rent Seeking’, The Rent Seeking Society, 31.
[59] Tullock, ‘Rent Seeking’, The Rent Seeking Society, 60.
[60] Tullock, The Vote Motive, 199; see, for example, CitationTullock, ‘Competing for Aid’, 41–62.
[61] Tullock, ‘Rent Seeking’, 39.
[62] Tullock, ‘Rent Seeking’, 22; see, in particular here, CitationTullock, ‘The Cost of Transfer’, 629–43.
[63] CitationTullock, ‘The Charity of the Uncharitable’, 379–92.
[64] CitationHarris, The End of Government?, 20. See also here CitationStigler, The Citizen and the State.
[65] CitationHarrison, ‘Mrs Thatcher and the Intellectuals’, 234.
[66] CitationBuchanan and Wagner, Democracy in Deficit, the Political Legacy of Lord Keynes, 99.
[67] CitationBuchanan and Wagner, Democracy in Deficit, the Political Legacy of Lord Keynes, 99
[68] CitationBuchanan and Wagner, Democracy in Deficit, the Political Legacy of Lord Keynes, 99, 103.
[69] CitationBuchanan and Wagner, Democracy in Deficit, the Political Legacy of Lord Keynes, 99, 70–1.
[70] CitationJoseph, Stranded on the Middle Ground?, 41.
[71] Tullock et al., Government, 141; CitationRidley, My Style of Government, the Thatcher Years, 81.
[72] CitationBuchanan, The Economics of Politics, 14, 16.
[73] Tullock, The Politics of Bureaucracy, 177.
[74] CitationShearmure, ‘Hayek and the Wisdom of the Age’, 80.
[75] Tullock, ‘Rent Seeking’, 68.
[76] On this see CitationTullock, ‘Dynamic Hypothesis on Bureaucracy’, 127–31.
[77] CitationHutton, ‘Foreword’ to F. Hayek, Economic Freedom and Representative Government, IEA Occasional Paper No. 39, London, IEA, 1973, 10.
[78] CitationThompson, The Political Economy of the New Right, 38.
[79] Tullock, et al., Government, 141.
[80] G. Tullock, ‘The Charity of the Uncharitable’, The Selected Works of Gordon Tullock, vol. 2, Virginia Political Economy, 267.
[81] Rowley, ‘Introduction’, The Rent-Seeking Society, xi.
[82] On this see also CitationBrittan, who saw in all this the essence of corporatism, The Economic Consequences of Democracy, 119.
[83] Burton, ‘The Instability of the “Middle Way”’ in CitationBarry et al., Hayek's “Serfdom” Revisited, 96.
[84] Tullock, ‘Rent Seeking’, 44.
[85] Seldon, Charge, 186.
[86] See CitationBrennan and Buchanan, Monopoly in Money and Inflation.
[87] Harris, The End of Government? 19.
[88] Ridley, My Style of Government, 80.
[89] Seldon, Charge, 180.
[90] G. Tullock, ‘Casual Recollections of an Editor’, Virginia political economy, 36, 42.
[91] CitationBlack, The Theory of Committees and Elections; CitationDowns, The Economic Theory of Democracy. In the United States, the methodology, some of the intellectual interests, and some of the arguments of the public choice theorists were prefigured in the work of so-called ‘property rights theorists’ such as Alchian and Demsetz.
[92] Downs, Inside Bureaucracy, 2. Downs' work was strongly influenced by Tullock's The Politics of Bureaucracy, a debt which Downs acknowledged at many points in the book. But Downs' discussion of bureaucracy was in many ways more complex and sophisticated than that of the Virginia School in the 1960s, accommodating a wider variety of motives and a greater diversity of bureaucratic types than had Tullock. And what emerged, therefore, was an analysis which paralleled that of public choice theory in many respects but one that because of its greater breath, and one must say realism, was less determinately negative in terms of its view of the process of bureaucratisation and its outcomes. Specifically, he concluded, as the Virginia School theorists never would have, that there was no reason to believe that bureaucratisation had been excessive and that ‘greater bureaucratization is one of the inherent costs of greater freedom of choice and could not be abolished without reducing that freedom’, Inside Bureaucracy, 257. Even so, works such as those of Downs also helped contribute to a climate of opinion critical of bureaucracy and some of the similarities between his analysis and the Virginia School have been noticed in passing.
[93] CitationBuchanan et al., The Economics of Politics, 3. As Buchanan puts it, ‘in Britain you surely held on longer than most people to the romantic notion that government seeks only to do good in some hazily defined Benthamite sense’; a romantic notion which, of course, public choice theory fundamentally challenged, 4.
[94] The IEA was established in 1957 by Anthony Fisher, a businessman profoundly influenced by Hayeks’ Road to Serfdom, which he had read serialised in the Reader's Digest in 1944. On the activities of the IEA and other Conservative think-tanks and pressure groups in the post-war period, see CitationRanelagh, Thatcher's People, CitationCockett, Thinking the Unthinkable and CitationDenham, Think-Tanks of the New Right.
[95] This it did both through many of its pamphlets and also by means of its Journal for Economic Affairs. On this see Seldon, The IEA, the LSE, xiii, 8; Tullock, Government, xiii. It is interesting to note here too that, from as early as 1967, James Buchanan acted as an adviser to the Institute, A. Seldon, ‘The Economics of Politics’, The IEA, The LSE, 269.
[96] C. Robinson, ‘Introduction’, The IEA, The LSE, ix.
[97] Cockett, Thinking the Unthinkable, 183–4. As one commentator has stated, ‘though much has been written of the Times and Financial Times…the Daily Telegraph was really the key paper as it did much to introduce the philosophy of the IEA to precisely that constituency of people who would make that philosophy such a radical motivating force within the Conservative Party’, ibid.
[98] Harris, The End of Government? 20–1.
[99] CitationMuller, ‘The Institute of Economic Affairs’, 105.
[100] CitationPirie, Micropolitics, 73–4.
[101] CitationPirie, Privatization, 58–9. The Director of the Adam Smith Institute, Eamonn Butler, was also influenced by public choice theory during a period spent in the United States, Cockett, Thinking the Unthinkable, 282.
[102] CitationHeffernan, ‘Blueprint for a Revolution?’, 77. For examples of the proposed operationalization of public choice thinking suggested by the Adam Smith Institute, see CitationButler et al. , The Omega File.
[103] Denham, Think-Tanks of the New Right, 50.
[104] CitationRidley, ‘Comment’ in Niskanen, Bureaucracy, Servant or Master?, 87.
[105] CitationThatcher, Let Our Children Grow Tall, Selected Speeches, 1975–77, 53.
[106] CitationThatcher, Let Our Children Grow Tall, Selected Speeches, 1975–77, 53
[107] CitationThatcher, The Path to Power, 252.
[108] CitationYoung, One of Us, a Biography of Mrs Thatcher, 87; though Ralph Harris himself has been referred to as a ‘leading instructor’, ibid., 407.
[109] He ‘used the IEA as a kind of research facility-cum-scholastic centre’, Cockett, Thinking the Unthinkable, 170.
[110] To give just two examples, this can be seen in the reference to the ‘intense pressure of group activity in the political arena’ with ‘more economic decisions having been taken outside the market’, CitationJoseph, Why Britain Needs a Social Market Economy, 14. While, in terms of groups with a vested interest in the extension of the power of public bureaucracies, he made mention of ‘expanded social studies departments, new professors…new government departments’, Joseph, Stranded on the Middle Ground?, 51.
[111] Joseph, Stranded on the Middle Ground?, 274.
[112] Cockett, Thinking the Unthinkable, 276.
[113] CitationBrown et al., No Turning Back, 9.
[114] Harrison, ‘Mrs Thatcher and the Intellectuals’, 225.
[115] CitationBrittan, Capitalism and the Permissive Society, xvi–vii.
[116] CitationBrittan, Capitalism and the Permissive Society, xvii.
[117] CitationBrittan, Two Cheers for Democracy, 26n; CitationBrittan, The Economic Consequences of Democracy, 237–46.
[118] See, for example, , The Credibility of Liberal Economics; and The Economic Analysis of Government and Related Themes; a work in which a number of the pieces are clearly informed by the work of Buchanan and Tullock. See, in particular, ‘The Economic Analysis of Government’, 3–18.
[119] See, for example, his ‘Public Preferences for Market Processes’ in Catch'76, London, IEA, 1976, 85–92.
[120] CitationThompson, Political Economy and the Labour Party, the Economics of Democratic Socialism, 1884–2005, 203–4.
[121] CitationThompson, Political Economy and the Labour Party, the Economics of Democratic Socialism, 1884–2005, 235–49.
[122] Such views found expression in the 1980s in the literature and practice of municipal socialism, though of course their intellectual pedigree extended much further back. See CitationThompson, Left in the Wilderness, the Political Economy of British Democratic Socialism Since 1979, 70–90.
[123] See, for example, Pirie, Micropolitics, 99–113; CitationCrossman, diary entry 13 June, 1965, ‘Here we are, drifting along, with our momentum halted and the civil service taking over more every day’, A. Howard (ed.), The Crossman Diaries, Selections From the Diaries of a Cabinet Minister, 1964–70, 113.
[124] For a selection of CitationStuart Hall's pieces published in the early 1980s, see his The Hard Road to Renewal: Thatcherism and the Crisis of the Left.
[125] Specifically, Downs' An Economic Theory of Democracy and Olson's The Logic of Collective Action. See CitationBarry, Sociologists, Economists and Democracy, 13–46, 99–125.
[126] Though these, for obvious reasons, tend to emerge in the late 1980s and 1990s. See, for example, CitationClarke and Newman, The Managerial State: Power, Politics and Ideology in the Making of the Welfare State.
[127] Niskanen et al., Bureaucracy, 42; see also ibid., 33, 54 and also, for example, Tullock, The Vote Motive, 203; Tullock et al., Government, 16. On vouchers and tax rebates, see, for example, Seldon, ‘Privatise Welfare’, 174 and Charge, 158, 161.
[128] Niskanen et al., Bureaucracy, 41.
[129] Niskanen et al., Bureaucracy, 58.
[130] On the latter, see CitationPeters and Waterman, In Search of Excellence, Lessons from America's Best Run Companies, for a particularly powerful exposition of the need for a ‘new managerialism’.
[131] On these policies, see, respectively, CitationBrerton and Temple, ‘A New Public Service Ethos’, 455–74; CitationRhodes, ‘The New Governance’, 41–62; CitationLeGrand and Bartlett (eds.), Quasi-Markets and Social Policy; CitationO'Toole, ‘The Loss of Purity’, 1–6 and CitationDeakin and Walsh, ‘The Enabling State’, 33–47.
[132] CitationBrown ‘State and Market’, 266–84.
[133] See Cockett, Thinking the Unthinkable, 243–320.
[134] CitationDenham and Garnett, ‘The Nature and Impact of Think-Tanks on Contemporary Britain’, 52.
[135] CitationOliver, ‘A Response to Denham's and Garnett's “The Nature and Impact of Think Tanks on Contemporary Britain”’, 85.
[136] CitationStone, Capturing the Political Imagination, Think Tanks and the Policy Process.