Economic Theory

Gordon Tullock, R.I.P.

It is sad to report the death of Gordon Tullock. He was a friend, likeable and respected as a great economist – even though he had no degree in economics.

He came, rather, from a public administration background, which was why he was the perfect partner to co-author The Calculus of Consent (1962) with James M. Buchanan. The book was a counterblast to the ‘welfare economics’ of the day, which saw market failure and prescribed cost-benefit analysis and government intervention. But the book showed, comprehensively and clinically, how there was government failure too. Politicians and officials are not angels, and their decisions are motivated by their own vested interests. Elections too are not a measure of ‘the public interest’ but a contest between competing and conflicting interests, which no amount of cost benefit analysis can resolve.

The book became the foundation for what was to be an entire branch of economics – or perhaps political science – called Public Choice. The public choice economists, applied the tools of economics – the science of choice – to the democratic decision process. They found that the behaviour of voters, politicians and bureaucrats in the political market place is little different from the behaviour of buyers and sellers in economic markets. They too are self-interested and largely motivated by maximising their own ‘utility’, rather than that of ‘the public’.

Following this approach, Tullock, Buchanan and fellow thinkers in the ‘Virginia School’, which focused on real world political institutions, realised that democratic processes were too often a very messy, exploitative and irrational way to make choices. They concluded that we should not be dewy-eyed about government decision making, and that we should limit it only to the things that are both crucial to do and simply cannot be done any other way.

Buchanan, in particular, emphasised the need for constitutional restraints so as to curb the exploitation of minorities by majorities, or of the silent majority by activist interest groups. On that front, Tullock will be particularly remembered for his delineation of the concept of Rent Seeking. The concept, and even the term, predated that work, but his contribution was to show how the cost of lobbying for government perks and privileges was economically inefficient and politically corrupt. He observed – the ‘Tullock Paradox’ – that the cost of rent seeking was often very low in proportion to the potential payoffs. A little lobbying can win potentially massive privileges (such as ‘quality’ regulation that effectively keeps out the competition). So it is no surprise that the lobbying industry has grown so large. And the more that government’s range, power and tax take expands, the larger are the potential gains.

Many of Tullock’s friends and colleagues were disappointed that he did not share in James M. Buchanan’s 1986 Nobel Prize. He never complained about it; and he will still be remembered with respect and affection.

For more on the Public Choice School, see Eamonn Butler’s Public Choice – A Primer.

This article was originally published on the Adam Smith Institute blog.

Eamonn Butler is the co-founder and Director of the Adam Smith Institute.

1 thought on “Gordon Tullock, R.I.P.”

  1. Posted 13/11/2014 at 21:27 | Permalink

    Gordon Tullock’s ideas were greatly stimulating, if not inspirational to me when I was writing my recent book on the collapse of French royal finances at the end of Louis XIV’s reign ( The intellectual categories and tools furnished by Public Choice theory have application not only in representative systems of government, but in advanced monarchical states too – and this can go back to the 17th and early 18th centuries. Value systems change, and so do many facets of human behaviour, but when people want to get something significant out of the state they tend to behave in remarkably similar fashions, and when there is serious information asymmetry governments will struggle to control interest groups, especially financial and logistical contractors….
    I hope Tullock died a happy man that his ideas had had so much impact. What more could a public-minded professor want?!

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