All Commentary
Monday, June 1, 1987

Book Review: Regulating Government: the Positive-sum Solution by Dwight R. Lee and Richard B. McKenzie

Lexington Books, D.C. Heath and Co., 125 Spring Street, Lexington. Massachusetts 02173 • 1986 • 206 pages, • $22.95

Quite a few journalists and intellectuals were bewildered late last year when James Buchanan won the Nobel Prize in Economics for his theory of public choice.

James Buchanan? Public choice? What goes on? Fortunately, a book comes along which applies, in a timely and illuminating fashion, the ground-breaking yet commonsensical work of Buchanan and his fellow thinker, Gordon Tul-lock, both of whom are professors at George Mason, University and distinguished members of The Mont Pelerin Society.

The book is Regulating Government, a valuable study by two students of Buchanan and Tullock at their Center for the Study of Public Choice. Dwight Lee holds the Ramsey Chair of Private Enterprise at the University of Georgia; Richard McKenzie serves as professor of economics at Clemson University and senior fellow at The Heritage Foundation.

The Lee-McKenzie thesis is plain: Public choice theory assumes, rather persuasively, that voters, legislators, and bureaucrats act mainly in their own interest, that political science and economics are thereby tied together in terms of incentives, that accordingly what we Americans need now is not regulation by government but regulation of government.

For government today, point out the authors, is a lot more than a referee; to quite an extent it is a participating player. It educates our children, aids foreign nations, delivers the mail, runs Amtrak, pensions the old, and much more. In the case of agriculture, government forces citizens to pay for unwanted or “surplus” farm goods—making them public goods—which it proceeds to buy, store, and hand out in the form of school lunches, senior citizens nutritional programs, low- income surplus butter and cheese distributions, and Public Law 480 “Food for Peace” foreign donations.

Professors Lee and McKenzie thus clarify some of the vital distinctions between private goods and public goods. Private goods engender conservation and positive-sum trade—trade which synergizes mutual gain. Public goods engender waste if not plunder—zero- if not minus-sum “solutions” to social opportunities which hence become social problems.

Cows and chickens, for example, are private goods, and nobody sees any chance of shortages or “endangered species” in such goods. Snail darters and blue whales, on the other hand, are declared to be endangered species and thereby, in effect, public goods. Accordingly, people who otherwise place high value on individual freedom urge not privatization of whaling (which is technically possible) but government controls on whalers.

Drs. Lee and McKenzie are anything but anarchists; they are Lockeans, holding that the end of law is not to abolish or restrain but to preserve and enlarge human liberty. In this year of our Constitutional Bicentennial, these two Public Choicers make the point that the raison d’être of constitutional constraints on government is to prevent people from doing through government that which they would not do in the absence of government. The very purpose of constraints on government is the same as the purpose of government. Here they echo James Madison who, in arguing for ratification of the U.S. Constitution, wrote in The Federalist:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.

  • William H. Peterson (1921-2012) was an economist, businessman and author who wrote extensively on Austrian Economics. He completed his PhD at New York University in 1952 under the supervision of Ludwig von Mises.