The quotation of the day is from page 270 of my late Nobel laureate colleague Jim Buchanan‘s insightful and deep 1984 article “Rights, Efficiency, and Exchange,” as it is reprinted in volume 1 of The Collected Works of James M. Buchanan: The Logical Foundations of Constitutional Liberty (footnote deleted):
Within a specific legal order, if entry [into markets] is free, market exchanges are made under an implicit rule of unanimity. If A and B voluntarily agree to an exchange, and if C remains free to offer possibly different terms to either party, there is no outcome that does not pass the consensus test. The outcome attained can be classified as “efficient” because it reflects agreement among all parties…
DBx: In other words: In markets with no, or only minimal, government-imposed restrictions on the terms of exchange or on who is allowed to make, and to accept, offers, the results of voluntary exchanged in free markets reflect unanimous consent.
Such consent is far more inclusive than is the consent of a mere majority. Therefore, to allow a simple majority of voters to override the results of market exchanges is to allow the consent of only a fraction of the polity (that is, [50/100] + 1) to dominate the consent of the full polity.
Donald Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University, and a former FEE president.
This article was originally published on FEE.org. Read the original article.