Today, two excerpts from the same section of the book. This should stir up some conversation — my comments are meant to provide some ideas of what could be discussed:

Tullock distinguishes, basically, between the relationship of exchange, which he calls the economic, and the relationship of slavery, which he calls the political. I use bold words here, but I do so deliberately. In its pure or ideal form, the superior-inferior relationship is that of the master and the slave. If the inferior has no alternative means of improving his own well-being other than through pleasing his superior, he is, in fact, a “slave,” pure and simple. This remains true quite independent of the particular institutional constraints that may or may not inhibit the behavior of the superior. It matters not whether the superior can capitalize the human personality of the inferior and market him as an asset. Interestingly enough, the common usage of the word “slavery” refers to an institutional structure in which exchange was a dominant relationship, In other words, to the social scientist at any rate, the mention of “slavery” calls to mind the exchange process, with the things exchanged being “slaves.” The word itself does not particularize the relationship between master and slave at all.

— James M. Buchanan, in the foreword to Gordon Tullock, Bureaucracy (Liberty Fund: Indianapolis, 2005), p. 7.

Keep in mind that the realm of the political, going on these definitions, extends to the organization of a firm. Buchanan gives meaning, most likely unintentionally, to the concept of “wage slavery.”

Tullock’s distinction here can also be useful in discussing an age-old philosophical dilemma. When is a man confronted with a free choice? The traveler’s choice between giving up his purse and death, as offered to him by a highwayman, is, in reality, no choice at all. Yet philosophers have found it difficult to define explicitly the line that divides situations into categories of free and unfree or coerced choices. One approach to a possible classification here lies in the extent to which individual response to an apparent choice situation might be predicted by an external observer. If, in fact, the specific action of the individual, confronted with an apparent choice, is predictable within narrow limits, no effective choosing or deciding process could take place. By comparison, if the individual response is not predictable with a high degree of probability, choice can be defined as being effectively free. By implication, Tullock’s analysis would suggest that individual action in a political relationship might be somewhat more predictable than individual action in the economic relationship because of the simple fact that, in the latter, there exists alternatives. If this implication is correctly drawn, the possibilities of developing a predictive “science” of “politics”would seem to be inherently greater than those of developing a science of economics.

— pp. 8–9.

Buchanan goes on to describe Tullock’s method, where he wants to appeal to the reader’s experience and intuition. My experience and intuition disagrees with Tullock, though. I don’t share this view of modern bureaucracy, and I don’t think the term “slavery” (as used by Buchanan) captures how modern hierarchical organizations work. Bureaucracies come against the same knowledge problem that affects markets, and so a good bureaucracy is one in which there is some process by which local agents have enough freedom of choice to exploit local knowledge and by which this local knowledge is delivered by proxy to others who may need it.

As it turns out, bureaucracies often do work like this, both within firms and within larger hierarchy organizations, such as government bureaus. Take the high school teacher, for example; he or she is afforded considerable, although not absolute, liberty in determining how to teach the students. Similarly, political agents often enjoy quite a bit of autonomy when it comes to carrying out daily activities at the “workplace” — while not a perfect example, think of how political agents do what they do in the show House of Cards. There are constraints in choice, often based on “orders from above,” but bureaucratic agents are rarely “slaves” in the sense of having only two choices: what your “master” wants you to do and something comparable to death.

Buchanan mentions that the “science of politics” may enjoy more predictive value than the “science of economics,” based on the idea that a political agent’s domain of choice is severely constricted. But, the explanatory power of public choice theory has been questioned. It can’t explain why people vote; it can’t always explain how politicians choose; et cetera. If the critics are right, that erodes the empirical meaning in Buchanan’s and Tullock’s exchange/slavery distinction between the economic and the political, respectively. (Ironically, in Calculus of Consent, Tullock and Buchanan seem to frame the political in the context of exchange.)

Finally, and totally separate from what we’ve discussed so far, Buchanan here seems to give credence to the philosophical position that the choice between accepting the lowest market wage and accepting starving to death is not really a choice at all, and that the laborer in that case truly is a wage slave. What are the normative implications, in the context of justice?

Thus as a consequences (perhaps unintended) of monopolized note issue, the liabilities of the privileged bank acquire a special status in the banking system; they become a kind of reserve media, supplementing and even superseding reserves of commodity money. Unlike deposit liabilities of non-note-issuing banks and unlike any of the bank liabilities in a system with competing note-issuers, the liabilities of a monopoly bank of issue are a form of high-powered money. Issues of such liabilities add to the base money of the system. This means, in effect, that a monopoly bank of issue i, in the short in the short run at least, exempt from the principle of adverse clearings. The liabilities it issues not employed as currency in circulation become lodged in the reserves of deposit banks, where they cause a multiplicative expansion of credit. In general (assuming a closed economy) these liabilities will not be returned to their issuer for redemption even though their issue, and the multiplicative expansion of credit caused by it, is not justified by any prior excess demand for inside money. In other words, in a closed system a monopoly bank of issue can cause an inflationary increase in the money supply — without suffering any negative consequences. Unless some external short-run control is imposed on it, a monopoly bank of issue even when its issues are convertible into commodity money can for some time at least pursue any loan-pricing policy it desires, arbitrarily expanding or contracting the money supply and causing widespread changes in nominal income and prices.

— George A. Selgin, The Theory of Free Banking (Totowa: Rowman & Littlefield, 1988), pp. 48–49.

[P]urely instrumentally rational agents cannot reason themselves into being rule followers and yet rule following seems absolutely critical to social life. What reason cannot achieve on its own, cultural (and biological) evolution has: normal humans have evolved into social creatures who care about following moral rules. So far from being mysterious, our best understanding of the evolution of social cooperation strongly endorses the conclusion that Rule-following Punishers — agents who care about following moral rules and ensuring that others follow them too — are a prerequisite of a cooperative social order. Thus Hayek rightly points out that our reason presupposes morality (and our caring for it) as much as it presupposes our goals; it does not construct either.

— Gerald Gaus, The Order of Public Reason (Cambridge: Cambridge University Press, 2011), pp. 146–147.