Anthony de Jasay's book The State (1985) belongs to public-choice theory. The similarities are numerous, including a common individualist methodology, the same normative individualist presumption, the nonromantic analysis of government, and the rejection of any "social welfare function" and cost-benefit analysis. This essay, however, focuses on the differences between The State and public-choice theory. These differences can illuminate our understanding of the state and the possibility, if any, of limiting it. Although Jasay has produced a considerable body of work since The State, I focus on that book and use James Buchanan as the focal point on the side of standard public-choice theory.
The main difference between The State and standard public-choice theory lies in their basic conceptions of the state. The state can be conceived as a servant or as a dominator. Public-choice theory adopts the first conception, even if it always keeps in mind the possibility that the servant may turn against its master. The State defends the second conception.
Some Methodological Differences?
Let us deal with some methodological differences first. Jasay models the state as a single, monolithic actor. One reason he does so is the observation that the state cannot but have its own ends because it is impossible to aggregate the preferences of all members of society into a sort of social welfare function: "[T]he state could not pursue the interests of its subjects unless they were homogeneous" (Jasay 1985, 267). I say a bit more about this reason later.
Another reason is purely methodological: assuming that the state is a monolithic entity' rationally pursuing its own ends is convenient and produces interesting results. Indeed, many of the predictions of Jasay's model are disturbingly close to our experience of the contemporary' state, from growing redistributive activities to global state-owned enterprises, constant attempts by the tenants of the state (the individuals or parties of individuals who actually run it) to limit political competition, minute regulation of life, and so forth. Modeling the state as an acting monolith, however, makes it more difficult to conceive how its internal structure can serve to constrain it, or how in Montesquieu's words "power should be a check to power" ( 1914, book XI, chap. 4).
Standard public-choice theory usually models the state as a complex assemblage of groups and individual actors: politicians, bureaucrats, voters, and organized interests. Once you adopt this approach, it becomes more difficult to talk of the state's interests without looking at the sometimes clashing interests of its constituent parts. So it is not surprising that public-choice analysis provides a more charitable vision of the state.
One might think that another methodological difference relates to the stability of individual preferences. Neoclassical economics, from which public-choice theory derives its analytical tools, assumes that individual preferences are stable over time. Jasay sometimes departs from this assumption. He suggests that individuals used to the state come to prefer it to the state of nature, which they might have preferred had they stayed in it. Individuals, he argues, can become addicted to the state or, on the contrary, allergic to it, as happens to a minority. An individual's preferences can also change as he becomes accustomed to a certain level of income. But this difference is only apparent. The assumption of stable preferences is mainly a methodological trick meant to avoid the temptation of ad hoc explanations (Becker 1976, 5) and often suffers exceptions. Moreover, even Buchanan abandons it when talking about political or philosophical values as opposed to tastes: "individual values can and do change in the process of decision-making," he explains (1954, 120).
Public Goods and Social Contract
The crucial substantive difference between public-choice analysis and the theory exposed in The State is that the former buys into the standard economic theory of public goods, whereas the latter does not. Recall that according to the standard theory a public good is a good whose consumption everybody enjoys simultaneously (nonrivalry) and from the consumption of which nobody can be excluded (nonexcludability). Public protection--national defense, police, and the courts--is the main example of a public good, although many others have been proposed. Because public goods are nonexcluable, free riders would skip paying for the production of such goods in an anarchic state of nature, so they would not be produced in sufficient quantity, if at all. In Hobbes's immortal words, the life of man under anarchy is "solitary, poor, nasty, brutish, and short."
Public-choice analysis concludes that it is in the interest of individuals to conclude a social contract that creates the state with the mission of producing the required public goods. This unanimous social contract forms the basis of the contractarian-constitutionalist dimension of public-choice theory (Buchanan 1975). The state...