RESEARCH HIGHLIGHT:EXCHANGES WITH AND WITHOUT THE SWORD
This article, published in the Journal of Institutional Economics, sets out James M. Buchanan’s theoretical framework of politics-as-exchange that retrospectively conceptualized formal institutions emerging from bilateral agreements to establish reciprocal rights and prospectively guided constitutional entrepreneurs to broker Pareto-superior reforms that had unanimous consent.
Buchanan believed this conceptualization of politics-as-exchange was necessitated by his ontological-methodological individualism and would initiate a new era of consensual politics if applied to real world institutions.
But I argue that it in fact led to illiberal conclusions that reflected dissonance between Buchanan’s Kantian individualism and Humean subjectivism.
It meant, for example, that slavery was characterized as a bilateral agreement between very unequal parties and it is argued it logically implied abolition required the consent of slaveowners.
But in this article I show that Buchanan’s ontology was compatible with the introduction into his framework of a right of exit that would have differentiated between exchanges with and without the sword to produce a consistent liberal constitutionalism.