Abstract
This paper tracks economists’ rising, yet elusive and unstable interest in collective decision mechanism after World War II. We replace their examination of voting procedures and social welfare functions in the 1940s and 1950s in the context of their growing involvement with policy-making. Confronted with natural scientists’ and McCathythes’ accusations of ideological bias, positive studies emphasizing that collective decisions mechanisms were unstable and inefficient, and normative impossibilities, economists largely relied on the idea the policy ends they worked with reflected a “social consensus.” As the latter crumbled in the 1960s, growing disagreement erupted on how to identify and aggregate those individual values which economists believed should guide applied work, in particular in cost-benefit analysis. The 1970s and 1980s brought new approaches to collective decision: Arrow’s impossibility was solved by expanding the informational basis, it was showed that true preferences could be revealed by making decision costly, and experimentalists and market designers enabled these mechanisms to be tested in the lab before being sold to those public bodies looking for decision procedures that emulated markets. In this new regime, the focus paradoxically shifted to coordination, revelation and efficiency, and those economists studying collective decision processes were marginalized.
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Notes
See Medema (2000) for a history of the early public choice movement.
Mueller (1976, 2003) explains that collective decisions arise from market failures, and he frames all “the theory of the state, voting rules, voter behavior, party politics, the bureaucracy, and so on” in terms of collective decisions in a direct or representative democracy. Tideman (2006) defines collective decisions as the coordination of intended actions by members of a collectivity. He proposes a taxonomy of collective choice procedures and norms in which he distinguishes between those procedures designed to achieve assent to the decision (consensus, trade or extortion) and procedures requiring agreement to their use (authority, contest, voting).
In his survey of the concepts of preferences, values, and choice, he explained that (1) economists have usually defined preferences in terms of valuations and (2) usually believe that agents choose the alternative that is at the top of their preference ranking. He concludes that choices, preferences ad valuations are difficult to disentangle in economic models.
Stigler himself conceded that in studying collective decision, economists were venturing into “applied ethics.”
The dearth of knowledge in America concerning the “continental tradition” certainly motivated Musgrave and Peacock (1958) to publish a collection of texts from European theorists. James Buchanan contributed to the endeavor by selecting a few papers and translating some of Wicskell’s work.
Bowen’s references to the political process largely were neglected by economists. A JSTOR search for papers published in economics journals from 1943 to 1950, and which refer to Bowen’s (1943) contribution, returns only one citation.
Samuelson (1947, p. 250) also believed that “concretely, the new welfare economics is supposed to be able to throw light on such questions as to whether the Corn Laws should have been repealed” only to point out that it “gives no real hue to action.” Boulding (1952, p. 1) likewise insisted that “the contribution of welfare economics to the discussion of economic policy…is not too encouraging”, partly because it is not “a realistic guide to social policy.”
Charles Tiebout (1956) quickly came up with a market solution to the problem of preference revelation, namely “voting with the feet”. Singleton (2015) explains how Tiebout developed the idea that citizens revealed their preferences by choosing among local communities proposing bundles of public goods and associated taxes.
Marciano (2013) provides an archive-based survey of the exchanges between Buchanan and Samuelson on these topics.
For instance, “we certainly wish to assume that the individuals in our society be free to choose, by varying their values, among the alternatives available,” he wrote (p. 338).
Lindblom (1997, p. 246) remembers that the vast majority of political scientists in the 1940s and 1950s relied on a set of undisputed axioms, among which the notion “that stable governments require the consent of the governed; that some degree of agreement on values, at least among elites, is necessary for stability.”
See Desmarais-Tremblay (2016) for a survey of Musgrave’s changing understanding of public goods.
Most of them would move to the Virginia Polytechnic Institute in the late 1960s, where the Center for Study of Public Choice was then created. The Center moved in 1983 to George Mason University.
As James March (1962, p. 671) also noted at the time, “most modern observers have viewed concepts of the ‘general will,’… as unsatisfactory concepts in the development of a theory of how political systems behave. ‘Public interest’ as a theoretical tool suffers from the standard problems of superordinate goals. It is almost impossible to make it simultaneously meaningful, stable, and valid.”
Though Arrow always continued to claim that his theorem was relevant to Bergson-Samuelson’s work, he nevertheless used the terms “social choice function” and “constitutions” more and more to name his function. This longstanding controversy between Samuelson and Arrow, as well as its effects on welfare economics and social choice are thoroughly related in Igersheim (2016).
Tucks (2007) argues that the void left by the lack of grand political philosophy syntheses was filled by economists’ purportedly ahistorical and universal concept of Pareto optimality to judge social arrangements.
See, for instance, James Snyder's “collective choice” course at MIT: http://ocw.mit.edu/courses/political-science/17-812jcollective-choice-i-fall-2008/syllabus/ or curricula requirements at Columbia University’s Department of Philosophy (http://philosophy.columbia.edu/content/major-requirements). Collective decision courses have survived in those economics departments with a strong tradition in public or social choice. See, for instance, Bryan Caplan’s course outline at George Mason University (http://econfaculty.gmu.edu/bcaplan/e854/econ854.htm, Accessed 07/28/2016).
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Acknowledgements
We thank Eric Posner, Glen Weyl, Roger Backhouse, Steven Medema, Vincent Merlin, Antoinette Baujard, Maxime Desmarais-Tremblay, Muriel Gilardone, Bernard Grofman, Herrade Igersheim, Alain Marciano, Dennis Mueller, Fabio Padovano, Maurice Salles and the participants at HISRECO (ENS-Cachan), at the “Bridging Public and Social Choice” conference (Center for Public Choice, University of Rennes I) and at the Quadratic Voting conference (Becker-Friedman Institute, University of Chicago). We acknowledge financial support from COST IC1205-Computational Social Choice and from INET.
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Cherrier, B., Fleury, JB. Economists’ interest in collective decision after World War II: a history. Public Choice 172, 23–44 (2017). https://doi.org/10.1007/s11127-017-0410-7
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DOI: https://doi.org/10.1007/s11127-017-0410-7