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Nancy MacLean Deeply, Profoundly Errs

Perhaps the passage in Nancy MacLean’s fictional tract that is richest in irony – and just as rich in error as any other randomly chosen passage in Democracy in Chains – is this one on page 98 (which serves as a source of quotations for many reviewers, including Brian Doherty and Mike Munger) (footnote deleted):

They [public-choice scholars] depicted as “rent-seeking” any collective efforts by citizens or public servants to prompt government action that involved tax revenues. And, in their assumption that individuals always acted to advance their personal economic self-interest rather than collective goals or the common good, Buchanan’s school went further, projecting unseemly motives onto strangers about whom they knew nothing. Similarly, Virginia school economists deployed the existing term “special interests” to refer primarily to organized citizens seeking government action and occasionally to corporations seeking legislative favor….  The scholars were conducting, in effect, thought experiments, or hypothetical scenarios with no true research—no facts—to support them, while the very terms of their analysis denied such motives as compassion, fairness, solidarity, generosity, justice, and sustainability.

Let’s begin with the errors.  Rent-seeking activities are not “any collective efforts by citizens or public servants to prompt government action that involved tax revenues.”  (Note: Making sense of “to prompt government action that involved tax revenues” is no easy chore.  One must guess just what MacLean thinks she means by this poorly worded passage.  I’ll do my best.)  First, rent-seeking as described and criticized by public-choice scholars typically is carried out by members of a relatively small special-interest group – for example, U.S. tire producers.  By “rent-seeking,” public-choice scholars do not mean all efforts by ‘the People’ to affect tax revenues or government behavior; they do not refer to efforts by any group or organization that can plausibly be regarded as working for the inclusive public interest.  A rent-seeking effort is one aimed at transferring value or sources of value – for example, property, income, consumer patronage – from one group of people to another group of people.  The very point of Gordon Tullock’s now-classic insight into rent-seeking is that efforts and resources spent merely to transfer value are wasted; those efforts and resources could have instead been, but weren’t, used to produce more value.

Put differently, for Jones to seek rents is for Jones to spend effort and resources trying to slice a given-sized pie more favorably for Jones – and, hence, less favorably, on average, for others.  Not only do non-Joneses, on average, get smaller slices of the pie, the pie itself is kept from growing because Jones spent resources on getting for himself a transfer from others rather than producing for others.  Contrary to what MacLean seems to think, efforts by public-spirited souls to genuinely improve society are not what is meant by “rent-seeking.”  (Reasonable people can and do disagree on which particular efforts will improve society and which will merely transfer value from the politically or economically less-adept to the politically or economically more adept.  A great deal of ink has been spilled in the rent-seeking literature on just this question.  But no one who knows anything about the rent-seeking literature believes that “rent-seeking” refers to efforts to improve society.)

Second, rent-seeking is not limited to “government action that involve[s] tax revenues.” The canonical rent-seeking activity is the quest by domestic producer groups for protective – as opposed to revenue – tariffs.  Such tariffs transfer income to successful rent-seeking domestic producers from large numbers of consumers who must pay higher prices, and from unseen workers and entrepreneurs who are rendered unemployable in their most-productive lines of work.  Tax revenue has nothing whatsoever to do with this form, or with many other forms, of rent-seeking.  And, importantly, there is no reason to believe that the typical successful rent-seeker is a poor, powerless person who manages to get the state to transfer income to him or her from people richer and more powerful.  Quite the opposite – as is shown over the decades in many of the empirical studies that appear in the referred journal Public Choice (and other places, such as the Journal of Law & Economics).  These studies are among the empirical public-choice studies that MacLean asserts do not exist.

A similar criticism applies to MacLean’s bizarre suggestion that public-choice scholars typically mean by “special interests” a public-interest group, and “occasionally … corporations seeking legislative favor.”  Whether public-choice scholars are correct on this matter or not, the special interests that they typically refer to are indeed corporations and other producer groups seeking legislative (and bureaucratic) favors.  MacLean is completely mistaken to suggest that by “special interests” public-choice scholars have in mind mostly large and diverse groups that act, or mean to act, in what members of those groups sincerely regard to be the public interest.

Another error is MacLean’s assertion that public-choice scholars (1) focus on motives, and (2) believe that the motives of people acting politically are narrowly materialistic and contemptible.  As Mike Munger correctly points out in his review of MacLean’s book, her claim is mistaken because Buchanan “thought people made subjective judgments, and those judgments might well be altruistic or almost anything else.”  But even more fundamentally: Buchanan reminded his readers repeatedly that public choice does not project motives onto those who operate in collective- or political-choice settings that differ in any way from the motives that are assumed to operate in commercial markets and other private settings.

Central to the public-choice project is the use in analyses of political decision-making the same assumptions about human motivation that are used in analyses of markets.  Public-choice scholars do not regard people who choose and act within political institutions to be any different from people who choose and act within private-property, market institutions.  A central – many might say the – point of public-choice analysis is to show that people’s choices and actions differ in political settings from what these are in market settings not because people have different motivations but, instead, because people confront in the different settings different constraints and potential benefits.  Change the rules of the game – change the opportunities and constraints – and the players change their choices and actions.

That MacLean misses this public choice point is alone sufficient to render anything else that she says about public choice, and about the men and women who work in the public-choice tradition, utterly untrustworthy.  Her missing this point is the equivalent of someone writing about Copernicus and missing Copernicus’s argument that the earth revolves around the sun rather than the sun revolving around the earth.  MacLean doesn’t begin to know what she’s talking about.

Now to the irony.  As argued just above, Buchanan and other public-choice scholars do not “project[] unseemly motives onto strangers about whom they knew nothing.”  But guess who does?  Nancy MacLean.  Despite her research, she obviously knows next-to-nothing about Buchanan in particular or about public choice generally.  And yet despite not knowing Buchanan (or, I feel certain, any other public-choice scholar) she attributes to Buchanan and public-choice scholars evil motives – motives that they did not (and do not) have and that she has no good reason to assert that they had or have.

MacLean is far too sloppy, illogical, and uninformed a historian to take seriously on these matters.