Individualism and Political Disorder

Individualism and Political Disorder

James M. Buchanan and Yong J. Yoon

Inspired by F.A. Hayek’s Individualism and Economic Order, this book also stands in contrast to the themes of that work, by emphasizing that collective action works differently from the way the market works. The chapters comprise papers written by James M.Buchanan, both with and without Yoon’s co-authorship, after the publication of his Collected Work volumes. These chapters reflect the authors' thoughts on politics, seen through the lens of fiscal policy and the tragedies of the commons and anti-commons in collective action. The pathologies of democratic politics rigorously analyzed in the book prove the relevance of Buchanan's constitutionalism

Chapter 12: The costs of collectivization, per se

James M. Buchanan and Yong J. Yoon

Subjects: economics and finance, economic psychology, political economy, public choice theory


The question of collectivization becomes relevant in the post-financial crisis years as characterized by growing criticism of market organization. Collectivization, the social structure distinguishable from the market or central planning agency, can be costly from overspending. In our analytical framework, the political order remains polycentric. The most widely acceptable institutional solution may be budgetary outlay sufficient to meet all demand, and especially when it is recognized that public criticism of market alternatives is often concentrated on moral goods, e.g., health care. The excess burden of collectivization, per se, is the excess of costs over benefits if the collectivity meets individual demand for the good beyond plausible efficiency levels. The costs of collectivization, per se, can be reduced by separated budgets, showing both revenue and outlay for individual budgetary line items, that bring collective spending decisions closer to the accompanying levy of taxes.

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