The Democratic State

Despite his strong personal commitment to political democracy, Buchanan nowhere provides a full and rigorous definition of the concept. He does not need to do so since he is a political economist whose model is the consensual agreement represented by voluntary trades and unregulated markets: ‘The simple exchange of apples and oranges between two traders — this institutional model is the starting point for all that I have done.’1 Exchanging rather than economising being the essential activity that most merits the investigation of the economist, it is no surprise that Buchanan should elect to assign pride of place to the catallactic perspective when it is as a political economist that he comes to write: ‘The subject matter of economics has always seemed to me to be the institution of exchange, embodying agreement between or among choosing parties … Almost by definition, the economist who shifts his attention to political process while retaining his methodological individualism must be contractarian.’2 It is contracting and mutually gaining through freely trading that constitute the core of the economic market — and of political democracy as well. We all know that the British people as individuals hold preferences with respect to the quantity and quality of their collectively-provided national health services, and it is therefore eminently reassuring to learn that those preferences are in fact taken into account by the State which is the supplier: ‘The results suggest that the transmission of these preferences into outcomes does take place, quite independently of the particular way in which this process operates.’3