ECONOMY

990 politics and scientific enquiry
failure to exploit these opportunities may be traced to the presence of prohibitive
transactions costs barriers.
The normative implications are clear; participants in the economy will be able to
secure more of that which they separately value if barriers to possible exchanges are
removed or reduced. Particular focus is to be placed on the facilitation of exchanges
in legal rights to undertake or to prevent activities, often treated as beyond the conventional
nexus of exchange in goods and services. The implications of the Coasian
analytical thrust for the development of a science of politics are largely indirect. To
the extent that the exchange or market nexus can be extended by the clarification
of rights and improved enforcement of contracts, any value-based argument for
politicization or collectivization becomes less convincing. On the other hand, the
argument for collective or political provision of protective state services, those that
involve guarantees of freedom to enter and exit exchanges, along with protection
of person and property and enforcement of voluntary contracts, is strengthened. In
the idealized setting that may be inferred from the Coasian analytical structure, the
protective state would be strong, and the productive state would be quite limited in
scope. 7
10 Wicksell and the Unanimity
Benchmark
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Knut Wicksell’s seminal contribution was written well before the twentieth-century
developments in welfare economics and in public choice (Wicksell 1896). His interest
was in extending the analytical framework of neoclassical economic theory,
which he had been instrumental in constructing, to the public or collective sector
of economic interaction. Wicksell started from the presumption that members of
an organized polity, through their representative agents, will seek to secure values
potentially promised by shared goods and services. But how will the collective action
be organized when the costs of providing such goods and services necessarily involve
distributional considerations? Wicksell was under no delusion to the effectthatrepresentative
agents seek out some general or public interest rather than that of their own
constituents. And he stressed that majority voting in legislative assemblies contained
no protection against exploitation of minorities and no guarantee that the aggregate
benefits of collective action exceed the costs.
How could the decision structure be constructed so as to ensure that the values
promised by shared goods and services could be secured in such fashion to ensure
that all members of the sharing group receive net gains? How could both economic
efficiency and justice be guaranteed? These questions made it necessary for Wicksell
⁷ For an explicit discussion of the distinction between the protective and productive state, see
Buchanan 1975.