The first iron law of economics is that we live in a world of scarcity. Because of this, economics puts constraints on our utopias. Rinse and repeat. This is how we discern between good and disastrous policies.
A feature of the research program conducted by Prof. Angelini on public law is the focus on the applications of the public choice theory and the ordo-liberalism perspective in the field of constitutional and administrative law.
The public choice theory of the Virginia School is the application of economics to the study of politics. It looks at the incentives and costs of political activity and makes predictions about what will emerge from the political process. In particular, public choice suggests that there may be predictable “market failures” in politics—for example, laws that favor well-organized special interests with stronger incentives to influence the law than the public. Even though the public has more votes, each person has less incentive to monitor and participate in the political system, so special interests have a leg up.
The ordo-liberalism of the Freiburg School starts from the very premise that the market order is a constitutional order, that it is defined by its institutional framework and, as such, subject to (explicit or implicit) constitutional choice. It assumes that the working properties of market processes depend on the nature of the legal-institutional frameworks within which they take place, and that the issue of which rules are and which are not desirable elements of such frameworks ought to be judged as a constitutional issue, i.e. in terms of the relative desirability of relevant constitutional alternatives. Its constitutional outlook at the market order places the research tradition of the Freiburg School in close proximity to the more recent research program of constitutional political economy that takes its main inspiration from the work of James Buchanan.
The significant contribution that both these research programs, the Buchanan’s constitutional economics and the ordo-liberalism of the Freiburg School, have made to the classical liberal tradition is that they have sharpened our awareness of the constitutional dimension of the liberal paradigm, an awareness that is conspiciously absent in much of the libertarian doctrine with its emphasis on the ‘unhampered market.’ The research program of the Freiburg School has drawn attention to the fact that the liberal ideal of a free society and market com- petition is a constitutional ideal, that it has to be specified in constitutional terms, i.e. in terms of the specific rules of the game that it advocates, and that it has to be argued for in terms of its attractiveness as a constitutional regime. This insight implies that, in advancing his pro- posals for the constitutional order of a free society, the liberal must ultimately appeal to people’s constitutional interests, and his arguments for a ‘liberal order’ amount, in the final analysis, to nothing other than the claim that people’s common constitutional interests are better served by such an order than by feasible alternative regimes.
The particular significance of Buchanan’s constitutional liberalism must be seen in the special emphasis that it adds to the constitutional theme, namely its insistence that a consistent liberalism cannot confine its normative principles of individual freedom of choice and voluntary contract to the sub-constitutional level of market transactions, but must extend them to the level of constitutional choice and constitutional contracting as well. It is Buchanan’s singular merit to have generalized the liberal ideal of voluntary cooperation from market choices to constitutional choices, from exchange contracts to social contracts, and to have shown thereby how the classical liberal paradigm can be generalized from its traditional emphasis on voluntary exchange and freedom of choice in markets to the level of constitutional choices, thus supplementing in an important respect the earlier arguments of the Freiburg School.