… is from pages 257-258 of my late Nobel-laureate colleague James Buchanan’s Fall 1991 Cato Journal paper, “The Minimal Politics of Market Order,” as this paper is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan:
Political pricing requires an extended supplementary bureaucratic agency to achieve plausibly meaningful coordination of objectives. Individual citizens, not only as demanders and users of the economy’s end items but also as suppliers of the inputs that are combined to produce such items, are necessarily subject to the discretionary direction of the bureaucratic agency to an extent not present under market organization. This dependency of the citizen on bureaucracy exists quite independent of personal behavioral characteristics of people in bureaucratic roles. Even if all those bureaucrats should behave ideally in terms of widely shared criteria of fairness, the dependency relationship continues to exist.
As modern public choice theory suggests, however, bureaucratic agents are not likely to be different from other persons in the community; at least, models of behavior should not be constructed that presume totally different behavior. The bureaucrat will, as will others, seek to maximize his or her utility subject to the constraints that are faced. And because the institutional structure under a regime of political pricing places other persons in a dependency relationship, the bureaucrat can scarcely be expected to refuse, deliberately, to exercise this power of discretion so as to maximize his or her own utility.
