A Deweyan Perspective on the Economic Theory of Democracy

By Radin, Margaret Jane | Constitutional Commentary, Winter 1994 | Go to article overview
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A Deweyan Perspective on the Economic Theory of Democracy

Radin, Margaret Jane, Constitutional Commentary


The economic theory of democracy, otherwise known as public choice theory, applies the postulates and reasoning of economics to politics and constitutions. "The basic behavioral postulate of public choice, as for economics, is that man is an egoistic, rational, utility maximizer."(1) The basic methodological premise, as for economics, is a rigorous atomistic individualism. The basic moral stance, as for much of economics, is that this is positive" theory, unconcerned with the goodness or badness of political actors and institutions, but only seeking to observe how incentives and institutional structures interact to produce empirical consequences.

For the functioning of democratic institutions--legislatures, administrative bodies, courts--the main predicted empirical consequence of all this individual maximization behavior by political actors--legislators, administrators, judges--is that there is massive rent-seeking going on. (Rent-seeking, in the parlance of public choice, means manipulating wealth transfers away from the unorganized public in favor of well-organized interest groups. Public choice theorists use two different aspects of scientific methodology, which I can characterize as deductive and inductive, to study these phenomena. In deductive research, public choice theorists use formal models to derive in detail exactly how we should see all this profit-seeking do its work on various aspects of the body politic. In inductive research, they use statistical analysis of data to collate the details of how the profit-seeking postulate fits the facts of democratic institutions, their process and output.

Public choice theory presents a bleak picture for any sanguine believer in high school civics. Instead of commitment to dialogue, deliberation, and ideals of public betterment, politicians are committed to collecting as much campaign money as possible so that they can be re-elected. In this bleak picture voting is paradoxical because it is an irrational act, economically speaking. Maybe votes are just commodities that are bought by interest groups for politicians "in exchange for higher probability of seeing a favorite bill passed."(2)

Whether public choice theory is a good or useful way to look at politics is disputed. As a land use teacher, I can say that the model seems to describe pretty well many of the interactions between developers and local planning and zoning officials. But if this is the truth about politics, what should we make of the ideal of deliberative self-government? What should we make of the ideal of a polity whose whole is more than the sum of its parts? Must we conclude that these ideals are merely obfuscatory rhetoric, used only because such rhetoric is welfare-maximizing for some powerful group?

I have been wondering what a Deweyan would make of public choice theory. From what we know of John Dewey's views of democracy, what is it plausible to imagine he might say if a time machine could bring him to our present? In this essay I'm going to speculate rather freely on that question. At first glance it might seem that Dewey's passionate commitment to the ideal of liberal deliberative self-government would make him dismiss public choice theory as anathema. Yet I think the question is interestingly more complex. As you will see, I imagine that Dewey would approve of the impulse to find a scientific approach to explain and predict the consequences of various features of human incentive structures and institutional design; but I also imagine he would think public choice analysis sadly mistakes the contingent nonideal situation we find ourselves in for a set of immutable laws; and I think he would find it important to consider the feedback into cultural evolution of this way of conceiving of our political process.



In The Public and Its Problems, Dewey drew a distinction between "democracy as a social idea" and "political democracy as a system of government.

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