Abstract
This chapter and the next are devoted to the rather simple model in which transfers are made from A to B solely because B wants them and not because A has any desire to make the transfers. That such activities are common in the modern world is, I take it, obvious. It is also obvious that such transfers have always been part of government activities. We should not be surprised that profit-making individuals should seek profit out of the use of the coercive power of the state to obtain funds from other people. It is reported that when Alexander the Great had a pirate chief brought before him, the pirate said, “The only difference between us is that you have more men and ships.” This was, in fact, a correct evaluation of the situation, although it did not save the pirate chief’s life.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Something a little different than this has happened occasionally. People who already have democracy have had constitutional conventions to provide improved democratic institutions. Our own example in Philadelphia, in my opinion, fully deserves the praise it has recieved.
For a summary of the anthropological literature on the origin of the state, see “The Centralization of African Societies” by Robert H. Bates, Social Science Working Paper 400, California Institute of Technology, and “Reciprocity, Political Origins, and Legitimacy” Fred H. Willhote, Jr., Coe College. The first few pages in the Willhote paper are devoted to biology, and can reasonably be skipped.
For a basic explanation, see Gordon Tullock and T. Nicholas Tideman, “A New and Superior Process for Making Social Choices,” Journal of Political Economy (October 1976): 1145–1
Note that all of this is really of more historic interest than current. The arrangement still exists but is now completely dominated by other aspects of the program.
The following discussion tends to separate the purveyors of whole milk from purveyors of cheese. As a matter of fact, there is a substantial overlap in the two industries, with the same enterprises frequently involved in both.
Now they sell a large part of it to the government, which is competing with the economic community in Europe for the honor of being the largest owner of elderly cheese and butter.
If the dairy farming industry gained from the transfer, presumably resources would move in until these gains had been dissipated.
In this particular case, the basic cause of the provision was lobbying by the dairy farmers and not by the cheese industry, but it may be that the cheese industry had something to do with the particular form of the regulations.
Transfers from the wealthy to the poor also have incentive effects, but they are much milder.
This assumes that the constitution permits this kind of transfer. The British constitution and many other constitutions do. It is not clear whether such transfers would be constitutional in the United States. They would certainly require careful draftsmanship. We do not observe them in England.
See my “Why So Much Stability,” Public Choice 37(2): 189–202.
For an exhaustive analysis of logrolling and its efficiency effects, see James M. Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962).
Candor compels me to tell the reader that this is my explanation of the absence of general coalitions making large direct cash transfers. It is not unanimously held by students of public choice. Indeed, the journal Public Choice is currently holding a discussion on the point. In any event, we must agree that the kind of coalition in which the majority transfers large sums in cash to itself from the minority is unknown in democratic societies except insofar as the wealthy are regarded as a particular minority. Even there, they are a very small minority, and they do not suffer too badly.
There are also some government goods, the benefit of which spreads well beyond the country in which they are generated. In these cases foreign countries can be free-riders as NATO has freeridden on the American military establishment.
As a matter of fact, the demand-revealing process makes this quite feasible. See Tullock and Tidemand, “A New and Superior Process for Making Social Choices,” and the special issue of Public Choice for an appropriate explanation.
The reasoning here follows primarily my “Federalism, Problems of Scale,” Public Choice 11 (Spring 1969): 19–31.
In addition to the demand-revealing process discussed above, there is E.T. Haefele’s “general purpose representative.” This would be a representative elected by each small district who would be himself a member of quite a number of different small governments, dealing with specialized activities. These small governments would characteristically have different geographic scopes, but all would include the district in which he was elected. The individual representative of a given area would then make trades with other representatives in which the benefit or cost to his area on a given bill is taken into account.
Once again, this matter is discussed with much greater thoroughness in The Calculus of Consent.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1997 Springer Science+Business Media New York
About this chapter
Cite this chapter
Tullock, G. (1997). Horizontal Transfers. In: Economics of Income Redistribution. Studies in Public Choice, vol 11. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5378-2_2
Download citation
DOI: https://doi.org/10.1007/978-94-011-5378-2_2
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-6261-9
Online ISBN: 978-94-011-5378-2
eBook Packages: Springer Book Archive