Social Choice: An Overview

1
Social Choice An Overview

• Michael Munger
• Duke University
• Public Choice Outreach
• GMU, Fairfax, VA
• July 2006

2
Why Study Social Choice?

• Isnt a society just a bunch of people arguing?
• BT Origin of Government is disagreement,
  capturing gains from exchange

3
Why Study Social Choice Contract?

• Discussion must be concentrated on the "margins"
  of variation in political institutions, not on
  the "totality" of such institutions, and the
  relevant question becomes one of criteria through
  which the several possible marginal adjustments
  may be arrayed. The contract theory, in this
  context, may be interpreted as providing one such
  criterion. Adopting the criterion implicit in the
  contract theory, the analysis of political
  institutions asks On what changes in the
  existing set of rules defining the political
  order can all citizens agree? This embodiment of
  the unanimity rule for all basic, structural
  reforms in political institutions, in the
  constitution, reflects the individualistic ethic
  in its broadest sense. (Calculus, Buchanan
  Appendix)

4
Why Study Social Choice?

• What does justice mean? Fairness? Do these
  words just mean whatever the speaker wants, or do
  they have objective meanings?
• Is it more important to have
• Liberty?
• Justice?
• Security?

Justice
Security
Liberty
5
Common Heritage, Though Different Schools

• In fact..

What about it, Dad?
6
The Right Thing

• There may not be any one right thing to do. It
  depends.
• It is the nature of collective choices that they
  are unitary One defense budget, one standard
  for pollution, and so on.
• Asking What Will We Do? begs the question. The
  real question is
• Why Do You Think There is a We?
• Buchanan and Tullocks Two Levels Cant let
  the majority decide what the majority gets to
  decide

7
Coherence and Legitimacy

• Can a group of people who disagree come to a
  consensus? How would this work? Why would we
  believe that the consensus is any more than an
  imperfect choice?
• Do the choices of majorities tell us anything
  about the right thing to do in the face of
  disagreement?
• Is there such a thing as the majority, which we
  just have to discover through voting or some
  political process?
• I wantyou wantwhat do we want?

8
Institutional Design

• Institutions are the humanly devised rules of the
  game that shape and direct human interactions.
• Institutions reduce uncertainty by shrinking the
  choice set of all of the players. If the rules
  are not formalized, the players spend too much
  time arguing over the rules, and less time in
  productive activities. The actual choice of
  institutions, however, is hard, since there are
  countless ways of choosing. What makes some
  institutions better than others?
• In particular, is democracy a good institution?
  How would we know? What are the alternatives?

9
Tacoma Narrows Bridge
10
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

11
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

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I. Unintended Consequences (Part the First)

• Unexpected aggregate consequences of individual
  choice
• Hog cycles
• Keynes paradox of thrift
• Hobbesian SoN/Prisoners Dilemma

13
I. Unintended Consequences(Part the Second)
Social Choice is Different

• Unexpected individual consequences of aggregate
  choices
• Auto safety Are Safer Cars Safer?
• Alliances Most Fail When Attacked...
• Pigou vs. Coase

14
Indl reactionsSome Examples...

• Auto Safety Peltzman claimed people choose
  their own risk level. Tullocks Modest
  Proposal

15
Indl reactionsSome Examples...

• Alliances Clearly, alliances are worthless.
  Nearly all alliances fail when attacked, in fact.
• So an alliance agreement is of no value in
  deterring attack or protecting ones citizens.
  Right?
• No.

16
Indl ReactionsExamples--Pigou vs. Coase

• Pigous Conjecture Markets are
  inefficient, as a means of allocating resources,
  to the extent that the (social) opportunity cost
  of a resource diverges from its price, or private
  cost to the user.
• Coasess Counter-Conjecture If property rights
  are clearly and exclusively defined, and the cost
  of writing and enforcing contracts is not too
  high, market forces will make the opportunity
  cost and the price of a resource converge.

17
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

18
II. Social metaChoice or MetaSocial Choice?

• Choice of rules creates the societyThe society
  is constituted by its constitution.
• Choice of basic allocations, distributions of
  power and wealth
• Partition of choice authority / legitimacy

19
Social metaChoice or MetaSocial Choice?

• Choice of rules creates the societyThe society
  is constituted by its constitution.
• Constitutional Political Economy

20
Social metaChoice or MetaSocial Choice?

• Choice of basic allocations, distributions of
  power and wealth
• PPF
• Bergson-Samuelson SWF
• Secular Deism

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Social metaChoice or MetaSocial Choice?
Roses
PPF 2
PPF 1
Guns
22
Social metaChoice or MetaSocial Choice?
Bergson-Samuelson
Roses
PPF
SWF
Guns
23
Social metaChoice or MetaSocial Choice?
Bergson-Samuelson Deism Two Welfare Theorems
Roses
Guns
24
Social metaChoice or MetaSocial Choice?
Arrow No SWF!!! Buchanan Ontology
Roses
Guns
25
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

26
Legitimacy/Authority Hobbes or Hume?

• The origin of civil government and the major
  influences in its development may be almost
  wholly nonrational in the sense that explanation
  on a contractual basis is possible. Societies
  form governments and change governments for a
  variety of reasons, many of which remain
  mysterious and far below the level of objective,
  scientific analysis. Political institutions, like
  languages, get changed, almost beyond
  recognition, by the gradual and largely
  unconscious modification imposed on them by the
  movement through time.
• In this sense political society can be said to
  develop and to grow organically and, if the
  purpose of investigation is solely that of
  explaining such growth, there is perhaps little
  purpose in inventing anything like the
  contractual apparatus. (Calculus, Buchanan
  Appendix)

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Legitimacy/AuthorityHobbes or Hume?

• Partition of choice authority / legitimacy
• My own view
• Three sources of authority, or legitimate
  decision-making, in any society
• Politics/Democracy
• Experts/Bureaucracy
• Markets
• Munger (2000), Analyzing Policy, W.W. Norton

28
Markets
Experts
Politics
29
Markets

• Efficiency Policies
• Market Structure
• Control Externalities
• Public Goods
• Information Asymmetry

• Equity Policies
• Income Redistribution
• Resource Distribution
• Control Externalities

• Institutional Reform Policies
• Information
• Values (Efficiency v. Equity)
• Institutional Design

Experts
Politics
30
Markets

• Efficiency Policies
• Market Structure
• Control Externalities
• Public Goods
• Information Asymmetry

• Equity Policies
• Income Redistribution
• Resource Distribution
• Control Externalities

• Institutional Reform Policies
• Information
• Values (Efficiency v. Equity)
• Institutional Design

Experts
Politics
Poli Sci (election / campaign finance reform,
etc.)
31
Markets
From whence? To what effect?

• Efficiency Policies
• Market Structure
• Control Externalities
• Public Goods
• Information Asymmetry

• Equity Policies
• Income Redistribution
• Resource Distribution
• Control Externalities

• Institutional Reform Policies
• Information
• Values (Efficiency v. Equity)
• Institutional Design

Experts
Politics
32
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

33
Focus for a moment on Markets.

• Markets are not the absence of other sources of
  authority. Markets do not just happen.
• On the other hand, unless the other sources of
  authority actively prevent market development,
  then at least some rudimentary market processes
  will nearly always spring up.
• Active markets tend to drive prices down toward
  production costs. Corporations and firms prefer
  profits go up, not down. So the self-interest of
  firms is generally to try to suppress the
  workings of markets.
• Fortunately, markets are robust enough that they
  are not easily suppressed, without the active
  complicity of one of the other sources of
  authority.

34
Preconditions for Markets(Necessary Conditions)

• Differences in goals, tastes, or desires (diverse
  preferences)
• Differences in endowments of productive resources
  and personal talents (diverse endowments)
• Declining average costs as more output is
  produced (economies of scale)
• Declining average costs as the scope of action of
  one producer is decreased (specialization and
  division of labor)

35
Gains From Trade

• Gains from trade Differences in endowments, or
  differences in preferences, result in improved
  welfare for all participants, as long as trades
  are informed and voluntary. This is a benefit in
  consumption, since by rearranging the consumption
  bundles among citizens, we can make everyone
  better off, even though there is no increase in
  the total amount of goods available for
  consumption. Magic? No, just markets.

36
Gains in Productive Efficiency

• By allowing entrepreneurs to take advantage of
  economies of scale, or economies accruing to
  increased specialization, markets foster economic
  growth. An increase in the level of economic
  activity means growth in the total amount of
  consumption goods available to citizens.
  Increased efficiency in production means that
  more can be produced with the same resources,
  again creating the potential for everyone to be
  better off.

37
Bonus Reductions in transactions costs, using
information transmitted by prices

• Quite separate from efficiency in the allocation
  of consumption goods (i.e., ensuring all gains
  from trade are exhausted) and efficiency in the
  allocation of productive resources, markets also
  provide the important service of providing
  information. Prices convey information about
  relative scarcity in a concise, yet effective
  way.

38
Information, Tastes, and Culture

• The peculiar character of the problem of a
  rational economic order is determined precisely
  by the fact that the knowledge of the
  circumstances of which we must make use never
  exists in concentrated or integrated form but
  solely as the dispersed bits of incomplete and
  frequently contradictory knowledge which all the
  separate individuals possess. The economic
  problem of society is thus not merely a problem
  of how to allocate "given" resourcesif "given"
  is taken to mean given to a single mind which
  deliberately solves the problem set by these
  "data." It is rather a problem of how to secure
  the best use of resources known to any of the
  members of society, for ends whose relative
  importance only these individuals know. Or, to
  put it briefly, it is a problem of the
  utilization of knowledge which is not given to
  anyone in its totality. (F.A. Hayek, 1945, AER).

39
Four Ways to Allocate Resources in the Face of
Scarcity

• 1. Price System (market) Resources
  are directed to their highest-valued use, so that
  whoever is willing to pay the most (either in
  terms of other valuable goods, or in currency)
  gets to control the resource.
• Big winners People with lots of money, or with
  talents or resources the society values highly.
• Disadvantages There are two. (a) Poor people
  may get too little, creating ethical problems of
  equity. (b) Independently of their basis in
  justice, market allocations may be politically
  untenable, if democratically-based authority is
  in a position to impose redistributive or
  confiscatory taxes.

40
Four Ways to Allocate Resources in the Face of
Scarcity

• 2. Queuing A queue is a line. Queuing
  means a system of allocation based on waiting
  your turn. So, first in line is first in
  priority. If all the resource is used up before
  your turn, you lose out.
• Big winners People with lots of time (actually,
  a low opportunity cost of time spent waiting in
  line).
• Disadvantages There are two. (a) People
  standing in line incur lots of deadweight
  losses, or time wasted, for no gain in
  consumption or productivity. (b) There is no
  reason to believe that resources are directed to
  their highest valued uses black markets 

41
Four Ways to Allocate Resources in the Face of
Scarcity

• 3. Chance Lotteries, drawings, or
  other random selection processes mean everyone
  has an equal chance of winning.
• Big winners No individual is a winner from the
  process, because in terms of expected value
  everyone is treated the same. From an ethical
  perspective, however, this may be an advantage.
• Disadvantage By definition, allocation is
  random. The person who actually gets the
  resource may value it at only a fraction of its
  worth to someone else. Opportunity cost is
  explicitly ignored in random processes.
  Consequently, chance allocations evoke secondary
  markets for reallocating by price.

42
Four Ways to Allocate Resources in the Face of
Scarcity

•  
• 4. Authority/Discretion Allocations can be
  made by experts, party officials, elected
  leaders, or central planners. This sort of
  allocation process is also called a command
  system.
• Big winners Guess who the party officials,
  their friends, and family! Alternatively, the
  beneficiaries of the policy may be those targeted
  by the policy, if discretion is used to avoid
  corruption and follow the rules.
• Disadvantage There are two. (a) Lose the
  information inherent in prices. (b) Corruption
  is irresistible.

43
Can Markets Plan the Economy?

•  
• Adam Smiths invisible hand
• Social planner, and the farmer

44
My Plan Your Plan ? Our PlanSocialist
Calculation Debate

• This is not a dispute about whether planning is
  to be done or not. It is a dispute as to whether
  planning is to be done centrally, by one
  authority for the whole economic system, or is to
  be divided among many individuals. Planning in
  the specific sense in which the term is used in
  contemporary controversy necessarily means
  central planningdirection of the whole economic
  system according to one unified plan.
  Competition, on the other hand, means
  decentralized planning by many separate persons.
  The halfway house between the two, about which
  many people talk but which few like when they see
  it, is the delegation of planning to organized
  industries, or, in other words, monopoly.
  (Hayek, 1945).

45
Division of Labor

• It is the maxim of every prudent master of a
  family, never to attempt to make at home what it
  will cost him more to make than buy. The taylor
  does not attempt to make his own shoes, but buys
  them of the shoemaker. The shoemaker does not
  attempt to make his own clothes, but employes a
  taylor. The farmer attempts to make neither the
  one nor the other, but employs those different
  artificers. All of them find it for their
  interest to employ their whole industry in a way
  in which they have some advantage over their
  neighbours, and to purchase with a part of its
  produce, or what is the same thing, with the
  price of a part of it, whatever else they have
  occasion for. (WoN, p. 485).

46
Specialization

• To take an example, therefore, from a very
  trifling manufacture but one in which the
  division of labour has been very often taken
  notice of, the trade of the pin-maker a workman
  not educated to this business (which the division
  of labour has rendered a distinct trade), nor
  acquainted with the use of the machinery employed
  in it (to the invention of which the same
  division of labour has probably given occasion),
  could scarce, perhaps, with his utmost industry,
  make one pin in a day, and certainly could not
  make twenty. But in the way in which this
  business is now carried on, not only the whole
  work is a peculiar trade, but it is divided into
  a number of branches, of which the greater part
  are likewise peculiar trades. ... the important
  business of making a pin is, in this manner,
  divided into about eighteen distinct operation,
  which, in some manufactories, are all performed
  by distinct hands, though in others the same man
  will sometimes perform two or three of them. I
  have seen a small manufactory of this kind where
  ten men only were employed, and where some of
  them consequently performed two or three distinct
  operations. But though they were very poor, and
  therefore but indifferently accommodated with the
  necessary machinery, they could, when they
  exerted themselves, make among them about twelve
  pounds of pins in a day. There are in a pound
  upwards of four thousand pins of middling size.
  Those ten persons, therefore, could make among
  them upwards of forty eight thousand pins in a
  day. But if they had all wrought separately and
  independently, and without any of them having
  been educated to this peculiar business, they
  certainly could not each of them have made
  twenty, perhaps not one pin in a day. (WoN, pp.
  4-5).

47
Division of Labor is the Most Powerful Force for
Social Change the World has EVER Known

• Division of labor is limited by the extent of the
  market
• Globalization would result from DoL regardless of
  colonialization or any other conscious policy of
  governments
• But, is it good? Is it just? Is it inevitable?
  Would we CHOOSE it, if the choice were presented?
  Or, is it just the aggregate unintended
  consequence of indl choice?

48
Markets.

• Coase
• Kaldor-Hicks
• Potential Pareto
• Hayek

49
THE PROBLEMS OF SOCIAL CHOICEOverview
Absolved!!

• I. Problem of Unintended Consequences
• II. MetaSocial, or MetaChoice
• III. Three sources of legitimacy/authority
• IV. Transactions Costs and MarketsCoase,
  Kaldor/Hicks, Hayek.
• V. PoliticsThree problems Buchanan, Hayek,
  Condorcet

50
Step back for a moment.The Fundamental Human
Problem(according to Munger)

• How can we construct or preserve institutions
  that make individual self-interest not
  inconsistent with the common good?

51
Origins of Markets

• Differences in endowments
• Differences in preferences
• Technical cost conditions (div of labor,
  economies of scale, increased dexterity,
  innovations in tool design)

52
Origins of Government Institutions

• Disagreement/exchange (BT)
• Capture gains from trade by reducing transactions
  costs
• Make public goods possible

53
Origins of Government Institutions

• What if we all wanted the same thing? Would
  government even be necessary?
• It would. Because we do all want the same thing
  more.
• On disagreement, Charles IV
• My cousin Francis and I are in perfect accordhe
  wants Milan and so do I.

54
Collective ChoicesWhat is truth? said jesting
Pilate, and would not stay for an answer.

• True Statements?
• Democracy means rule by the people
• Democracy is the best form of government
• The many are wiser than any one person
• Morality is defined by majorityDemocracy is a
  means of discovering truth

55
Collective v. Public Buchanan Problem
Property of Choice Property of Good Individual Decision I can choose, alone and without interference Collective Decision Choices are made by a group, and are binding on all
Private Decision My choice has no consequence for your welfare Liberty of the individual What socks should I wear? Whom should I marry? Tyranny of the majority Invasion of privacy Theft of property rights
Public Decision My choices affect your welfare Underinvestment, or else theft by the minority Air or water pollution Education Liberty of the group How much to spend on defense? How to take care of the poor?
56
Central Questions

• Can reasonable people differ? Can a reasonable
  person oppose gay marriage? Can a reasonable
  person be pro-life? Is it possible to support
  the war in Iraq?
• What is the basis of disagreement
• Chocolate vs. Vanilla? In politics, values. Are
  they primitives? Deliberation wont help.
• Different information sets? Evidence about
  causes, different understandings of means-ends
  relations. Deliberation might help.
• Is there a fact of the matter?

57
Central Questions

• Is it true that the many are wiser than any one?
  Many people have argued this claim.
• For it is possible that the many, no one of whom
  taken singly is a sound man, may yet, taken all
  together, be better than the few, not
  individually, but collectively. (Aristotle,
  Politics, Book I, Chapter 11)
• Some important analytical support, under some
  circumstances. Condorcets Jury Theorem, for
  example.

58
Central Questions

• The real problems of political/democratic choice
• Scope of government/collective power the
  Buchanan problem
• Information of time and place the Hayek problem
• Coherence and legitimacy The Condorcet / Arrow
  problem

59
Scope

• What can government decide? How would we decide
  what government can decide?
• What do I get to decide, by myself? What things
  does my family get to decide?
• Suppose a group of people want to decide
  something for me, for my own good? Can they do
  that? How could I stop them?

60
P.J. ORourkeInformation and Scope Problems of MR

• Now, majority rule is a precious, sacred thing
  worth dying for. Butlike other precious, sacred
  things, such as the home and the familyit's not
  only worth dying for it can make you wish you
  were dead. Imagine if all of life were determined
  by majority rule. Every meal would be a pizza.
  Every pair of pants, even those in a Brooks
  Brothers suit, would be stone-washed denim.
  Celebrity diets and exercise books would be the
  only thing on the shelves at the library.
  Andsince women are a majority of the population,
  we'd all be married to Mel Gibson. (Parliament of
  Whores, 1991, p. 5).

61
James Buchanan Like Hobbes, too much liberty?

• What should government be allowed to do? What
  is the appropriate sphere of political action?
  How large a share national product should be
  available for political disposition? What sort of
  political decision-structures should be adopted
  at the constitutional stage? Under what
  conditions and to what extent should individuals
  be franchised? (Politics Without Romance.)

62
Coherence and Legitimacy

• Can a group of people who disagree come to a
  consensus? How would this work? Why would we
  believe that the consensus is any more than an
  imperfect choice?
• Do the choices of majorities tell us anything
  about the right thing to do?
• Is there such a thing as the majority, which we
  just have to discover through voting or some
  political process?
• I wantyou wantwhat do we want?

63
Problem of the U.S. in Iraq
64
Democratic Choices War in Iraq

• Youve got to help me out hereplay along!
• YOUR Preferences and beliefs, as assigned card.
  REALLY! Accept the premise, and act like those
  are your preferences. Three choices
• No war N
• Aggressive war W
• Police/political means P

65
Choices War in Iraq

• One possibility isolationist variant of Powell
  doctrine
• N gt W gt P
• We should not get involved.
• But, if we do, we should go in with overwhelming
  force.
• Worst thing is to expose our troops/workers in a
  limited police action, depend on the U.N.
• If your LAST name starts with A-F, this is YOU!

66
Choices War in Iraq

• Another possibility Rummy World
• W gt P gt N
• Iraq/Saddam is an imminent threat, will develop
  WMD.
• If not war, then must vigorously pursue sanctions
• Worst thing is to do nothing, relax sanctions and
  let Iraq become nuclear power
• If your LAST name starts with G-N, this is YOU!

67
Choices War in Iraq

• Final possibility Prudent Dove
• P gt N gt W
• Let sanctions and inspections do their work,
  because Iraq is a potential danger to its
  neighbors and the world
• We have no good claim to just war, so next best
  is to do nothing
• Worst thing is to use war against a nation that
  has made no overt attack on the U.S.
• If your LAST name starts with O-Z, this is YOU!

68
Choices War in Iraq

• Sowe have disagreement
• Prudent dove wants to use P, police action
• Rummy wants war
• Isolationists would prefer to stay far away from
  foreign entanglements, so do nothing.

69
Choices War in Iraq

• Lets use democracy, the pure kind where the
  people make the choice directly.
• First, lets decide whether to use force, or do
  nothing.
• Vote P vs. W to decide which activity is better,
  and then vote that against N. That way, we are
  comparing the best do something against do
  nothing.

70
Choices War in Iraq

• So, P loses to W.
• What remains is to put W up against N. How
  about that?
• It turns out N beats W, and W beats P.

71
Choices War in Iraq

• Consider what just happened. Simply by changing
  the order in which we consider the alternatives,
  I could generate as the winner any one of the
  three alternatives.
• Choosing the agenda, then, is tantamount to
  choosing the outcome.
• Is this just a conjurers trick, or does it tell
  us something about democracy?

72
Choices War in Iraq

• If there are three (or more) alternatives, and
  there is disagreement, then democracy may be
  radically indeterminate.
• More simply, there is no correct answer to the
  question, What do the people want?
• In fact, some majority opposes every alternative.

73
Choices War in Iraq

• Here is the problem
• I/P Rummy Prud Dove
• N W P Best
• W P N Middle
• P N W Worst
• Majority preferences
• W gt P gt N gt W
• Endless, infinite cycling over alternatives. Not
  a tie, but a literal perpetual motion machine

74
But this is nonsense meetings end

• That is what should terrify you meetings end,
  and things get decided. The point is that we are
  rarely presented with three or more alternatives.
  We usually are presented with two. How are
  those two chosen?
• The Tomasi Revolution coalitions form,
  charismatic people take power. Not the will of
  the people, but the force of will of some
  demogogue or tyrant
• If the rules matter to this extent, that means
  that procedures, not preferences, determine
  outcomes. And elites control procedures.

75
Democracy works fine. So long as everyone agrees

• But if there is disagreement, and at least three
  alternatives, then a majority opposes every
  available choice. So, democracy fails us when we
  need it most!
• Since some choice has to be made, we are left
  with an outcome that is either
• Imposed (tyranny)
• Arbitrary (random or procedure-driven)
• In either case, democratic choice is chimerical
• Dictatorship with the trappings of democracy

76
The worst of all worlds

• Democracy without constitutional liberalism
• 1. Rule of law, protections of property and
  liberty
• 2. Limits on scope of issues within the
  jurisdiction of collective choice
• Democracy without these is the most terrifying
  kind of tyranny you can imagine. Americans, and
  the West, are confused about good government.
  The key is constitutional liberalism, not
  democracy.

77
Three Problems in Politics as Solution for Social
Choice Dilemmas

• Buchanan Problem Scope
• Hayek Problem Information
• Condorcet / Arrow Problem Coherence

78
One Further Problem.Leadership Social Choice?

• Why do we put the pictures of leader on postage
  stamps?
• So we may thumb their noses, and lick their
  hinder parts.
• What role can leadership play in a democracy?
  Can leaders forebear, resisting the temptation to
  use the immanent potential for cycles to their
  own advantage?

79

• Shakespeares Tragedy of Coriolanus Act II, Sc
  3
• BOTH CITIZENS. The gods give you joy, sir,
  heartily! (Exeunt citizens)
• CORIOLANUS. Most sweet voices!
• Better it is to die, better to
  starve,
• Than crave the hire which first we
  do deserve.
• Why in this wolvish toge should I
  stand here
• To beg of Hob and Dick that do
  appear
• Their needless vouches? Custom
  calls me to't.
• What custom wills, in all things
  should we do't,
• The dust on antique time would lie
  unswept,
• And mountainous error be too highly
  heap'd
• For truth to o'erpeer. Rather than
  fool it so,
• Let the high office and the honour
  go
• To one that would do thus. I am
  half through
• The one part suffered, the other
  will I do.

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