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Agency, Economic Calculation, and Constitutional Construction

  • Richard E. Wagner
Chapter
Part of the Topics in Regulatory Economics and Policy book series (TREP, volume 1)

Abstract

This paper has both positive and normative foundations. The normative foundation is an affirmation of the broadly liberal heritage of the American experiment with constitutionally limited government. The presumption reflected in the Declaration of Independence, that government derives its just powers from the consent of the governed, is taken seriously, which, among other things, requires rejection of the tautological version of this presumption which is so common, in which the mere presence of what are called “democratic” institutions is taken to mean that those institutions necessarily reflect such consent. Legislative actions may reflect such consent and hence be legitimate, but also they may not and hence be illegitimate. The victim who yields her purse and her body to the knife-yielding intruder “consents” to do so in light of the alternative, just as citizens “consent” to be taxed, regulated, and otherwise governed in light of the alternative. But it is possible to move beyond a statement of tautology only by recognizing that contractarian principles are the only principles that are appropriate for a society of free people. Such a free or liberal society requires in turn a political, constitutional order that is consistent with its own promotion, and such consistency in constitutional construction is a positive and not a normative matter.

Keywords

Capital Market Public Choice Public Official Public Output Ownership Share 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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    For a recent compilation of papers on this topic, written from a variety of perspectives, see George Zodrow.Google Scholar
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    This is, of course, though in a different context, the basis for the common argument, in the literature on federalism, that wealth redistribution is more “efficiently” performed by the national government than by local governments. It is also the basis of the common assertion that public output, unlike private output, is hard to measure. There is, however, no differential problem of measurement, but there is a difference in the degree of consensus among principals due to such institutional differences as those described above.Google Scholar
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    The essential identify of Wicksell’s principle and Pareto’s, with both being grounded in consensus, is explored by P. Hennipman. With respect to Pareto, the distinction between a general principle of consensus and various concrete ways in which that principle might be put into operation, is set forth by Juergen Backhaus, (1980)(1981).Google Scholar
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    To the extent they were broadly representative of business interests, cities before the reform era of so-called good government may have operated in similar fashion, thereby illustrating yet another particular implementation of Wicksell’s general principle of consensus.Google Scholar

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© Springer Science+Business Media New York 1988

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  • Richard E. Wagner

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