Economists and the State

Economists and the State

What Went Wrong

Timothy P. Roth

Adam Smith is widely regarded as the ‘founder of modern economics’. The author shows, however, that Smith’s procedurally based, consequence-detached political economy, an approach shared by America’s Founders, finds no expression in the economist’s utilitarian, procedurally-detached theory of the state. This ‘wrong turn’ has meant that, if economists are ill-equipped to address an expanding federal enterprise in which utilitarian considerations trump the Smithian/Madisonian idea that means and ends must be morally and constitutionally constrained, they are also ineffectual bystanders as growing institutional skepticism, demands for ‘social justice’ and metastasizing rights claims threaten our self-governing republic.

Chapter 5: What has been wrought

Timothy P. Roth

Subjects: economics and finance, political economy, public choice theory, politics and public policy, political economy, public choice


5.1 THE FEDERAL LEGISLATIVE PROCESS As has been repeatedly emphasized, America’s Founders’ republican self-government project was informed by a prior ethical commitment to the moral equivalence of persons. This commitment, shared with Adam Smith and Immanuel Kant, found expression in Smith’s ‘science of a statesman or legislator’, and in the Constitution’s Madisonian ‘auxiliary precautions’. A recurring theme, pressed in the works of Smith and Kant, in the Founders’ Writings, and in The Federalist Papers is that statutory law must be impartial, and that the maximum possible equal political participation must be promoted. If this means that statutory law should both reflect and promote respect for the equal treatment imperative, and that ‘[Representatives] must seek first to pass just and effective legislation’ (Rawls 1971, p. 227), it also means that ‘the Constitution … must underwrite a fair opportunity to take part in and to influence the political process’ (p. 224), and that All citizens should have the means to be informed about political issues. They should be in a position to assess how proposals affect their well-being and which policies advance their conception of the public good. Moreover, they should have a fair chance to add alternative proposals to the agenda for political discussion. The liberties protected by the principle of participation lose much of their value whenever those who have greater private means are permitted to use their advantages to control the course of public debate. (Rawls 1971, p. 225) It is against this background that I draw attention to legislative...

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