The Review of Austrian Economics, 15:2/3, 111–119, 2002.
2002 Kluwer Academic Publishers. Manufactured in The Netherlands.
Austrian Economics and Public Choice
PETER J. BOETTKE
James M. Buchanan Center for Political Economy, George Mason University
EDWARD J. L
Department of Economics, University of North Texas
Abstract. In this introduction, we will ﬁrst discuss the methodological afﬁnities between the market process and
public choice approaches to political economy, and then suggest that because of these afﬁnities market process
scholars should feel at home using public choice analysis to study politics, and public choice scholars should feel
at home using market process analysis to study the economy. In a fundamental sense, public choice theory refers
to the application of the economic way of thinking to study the political process.
The economic way of thinking
deals with individual decision-making, and exchange relationships in a variety of social settings. Mises is arguably
the ﬁrst scholar to champion a uniﬁcation of the social sciences by way of a common rational choice model.
Hayek should be recognized as one of the forerunners of the economics of politics with his The Road to Serfdom
(1945) and constitutional political economy with his The Constitution of Liberty (1960).
and Tullock’s contribution to modern political economy touch on these themes: rational choice, catallactics or
exchange, and constitutional construction.
The papers in this special issue of The Review of Austrian Economics by Buchanan and Vanberg, Levy, Foldvary,
and Naka point to the strong methodological and theoretical afﬁnities between public choice and market process
economists. The papers by Holcombe, Sutter, Benson, and L´opez move from the methodological and theoretical
level to the realm of applied theory and empirical work.
Establishing the Common Ground
In its emergence, public choice represented a departure from the “organic State” model of
collective action toward an individualistic model (Buchanan and Tullock 1962:11–15.). In
public choice theory, government is neither a collective entity nor an instrument of ruling
classes, but a vehicle or “machine” by which individuals choose to act in concert with one
another for the purpose of producing collective goods. Moreover, in choosing collectively,
individuals are no less self-interested than in their private choices (Olson 1965:101). So
public choice begins as the study of political agents using the conventional behavioral
assumption of individual self-interest found in the study of economic agents. In this sense,
the methodology of public choice is entirely consistent with the Austrian “practice of
viewing social wholes (such as national economies) as the product of individual actions...”
(Christainsen 1994:11). Both market process and public choice economists begin with
methodological individualism, and both are in stark contrast to holistic accounts in the social
sciences. The Austrians developed their methodological individualism within their debate