Journal Article The Theory of Monopolistic Quantity Discounts Get access James M. Buchanan James M. Buchanan Tallahassee, Florida Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 3, 1952, Pages 199–208, https://doi.org/10.2307/2295890 Published: 01 January 1952

Journal Article The Optimality of Pure Competition in the Capacity Problem: Comment Get access James M. Buchanan James M. Buchanan University of Virginia Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 81, Issue 4, November 1967, Pages 703–705, https://doi.org/10.2307/1885590 Published: 01 November 1967

Journal Article Peak Loads and Efficient Pricing: Comment Get access James M. Buchanan James M. Buchanan University of Virginia Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 80, Issue 3, August 1966, Pages 463–471, https://doi.org/10.2307/1880732 Published: 01 August 1966

At the meetings in 1974, I presented a paper entitled, A Contractarian Paradigm for Applying Economic Theory (printed 1975). In that paper, along with others (see my 1979 book), I argued that our subject matter is centrally a of or a science of contract,' and that the exchange paradigm should take precedence over the maximizing paradigm. This shift in the focus of positive inquiry carries normative implications. Conceptions such as aggregate efficiency in the allocation of resources become, at best, examples of functionalist error, along with the more explicitly normative variants of the social welfare function. The contractarian or catallactic approach to economic interaction suggests that systems or subsystems be evaluated in terms of the comparative ease or facility with which voluntary exchanges, contracts, or trades may be arranged between and among members of the community. Normative judgments take the form of statements that array better and worse processes (rules, laws, institutions) within which exchanges are allowed to take place. These judgments are categorically distinct from those that array and evaluate results or outcomes. This shift in normative political economy has implications for the issues of constitutional interpretation debated by legal scholars and philosophers. These issues involve disputes along several related and intersecting dimensions: between judicial activism and nonactivism; between judicial deference to legislative authority and judicial independence; between strict constructivism and pragmatism; between original intent and legal environmentalism; between teleological and deontological conceptions of law. My purpose here is to discuss some of these contractarian implications for constitutional interpretation. This is a limited purpose, and I advance no direct and extended argument on either general philosophical issues, or on points of debate in particular legal settings. Any identifiable contribution of the contractarian political economist must emerge from the differentially abstracted order that his perspective imposes on social reality. Section I covers the familiar distinction between an individualistic and a communitarian starting point. The implication for legal interpretation of constitutional rules is almost self-evident. In Section II, I again go over analysis, developed elsewhere, that extends the catallactic paradigm from the economy to the political order, and, in particular, to the design, selection, and enforcement of constitutional rules. Section III examines the implications for judicial interpretation of the political constitution, and, in particular, the implications for the debate between strict constructivism and pragmatism and between original intent and legal environmentalism. In Section IV, the argument is extended to the contractarian's stance in interpretative confrontation with rules that cannot find a logic in any contractarian ideal.

object for economists' research is which is, by definition, a social organization, an interaction among separate choosing entities. I return deliberately to this element in our primer, because I think that it has been too often overlooked. By direct implication, the ultimate object of our study is not itself a choosing, maximizing entity. The economy does not maximize, and we may substitute polity here without change in my emphasis. No one could quarrel with these simplistic statements. inference must be, however, that there exists no one person, no single chooser, who maximizes for the economy, for the polity. To impose a maximizing construction on the models that are designed to be helpful in policy is to insure sterility in results. Where did economics, as a discipline, take the wrong turn? My own suggestion is that Lionel Robbins marks a turning point. His book defined economic as the location of maxima and minima. Almost simultaneously with this, the Edward H. Chamberlin and Joan Robinson books marked a turning inward, so to speak, a shift toward the maximizing problem of a specific decision-making entity. economics of the firm was born, to be followed by the Hicksian elaboration of the economics of consumer choice. Paul Samuelson put this all together in his Foundations of Economic Analysis. Importantly, he extended the maximizing construction to welfare economics, extolling the virtues of A. Bergson's social welfare function as the tool through which such extension was made possible. For a quarter of a century, we have witnessed many variations on this theme, with economists hither and yon maximizing objective functions subject to specific constraints. I should not imply that the maximizing models have held monolithic dominance. institutional economists, and their successors, have continued their sometimes inarticulate critique of economic theory. Frank Knight, and some of his students, continued to lay stress on the social-organization aspects of the discipline. Game theory, in its solution rather than its strategy search, offered partial redirection of emphasis. More importantly for my purposes, public choice theory emerged as the positive theory of politics, a theory that necessarily treats individual decision takers as participants in a complex interaction that generates political outcomes. But let me return to mainstream efforts of economists in the years since World * University Professor and General Director, Center for Study of Public Choice, Virginia Polytechnic Institute and State University. author is indebted to Amoz Kats and Gordon Tullock for helpful comments.