7 Cato J. 331 (1987-1988)
The Calculus of Consent and the Constitution of Capitalism

handle is hein.journals/catoj7 and id is 335 raw text is: THE CALCULUS OF CONSENT AND THE
CONSTITUTION OF CAPITALISM
Dwight R. Lee
Introduction
The functioning of a market economic order, or capitalism, is not
discussed in The Calculus of Consent. The purpose of the public
choice classic by Buchanan and Tullock was to examine the demo-
cratic political process from the analytical perspective of the modern
economist.' The success of the Calculus in achieving this stated
purpose is beyond question. We now have 25 years of impressive
intellectual effort that builds on and attests to the success of the
Calculus in opening avenues of insight into the political process. But
in achieving this success, the Calculus also opened a field of research
that significantly expands our understanding of the market order.
Every economy is a political economy and it is impossible to under-
stand an economic system without taking into consideration the polit-
ical environment within which that system operates. This is obvious
in the case of a socialist, or centrally planned, economy where the
distinction between economic and political decisions is blurred in
the extreme. It is much easier to overlook the mutual interaction
between economics and politics in the case of a market economic
order where economic decisions are less directly influenced by polit-
ical decisions. But the connections between politics and the market
economy are no less important by virtue of being more subtle.
CatoJournal, Vol.7, No. 2 (Fall 1987). Copyright @ Cato Institute. All rights reserved.
The author is Professor of Economics at the University of Georgia.
'The closest Buchanan and Tullock get to discussing the market in the Calculus is
when they state, the market order is founded on the empirical reality that not all men
renounce self-interest, and that, because of this, the pursuit of private gain should be
put to social use where this is possible. Their next sentence, however, is, The
question that we have posed in this work concerns the possibility of extending a similar
approach to political organization (1962, p. 304).

331

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