How “Self-Interest” Works in The Federalist

While Publius occasionally draws a pretty dark anthropology in The Federalist, as well as occasionally a brighter one as well, most of the time he draws human character in the middle, applying what could be styled a soft version of rational choice theory. As a matter of course, Publius assumes politicians and government officials will usually (although not always) pursue individual self-interest through their official positions.

In assuming habitually self-interested behavior, Publius is trying only to be realistic about what motivates officials most of the time. He seeks to take “human nature as it is, without either flattering its virtues, or exaggerating its vices,” as Alexander Hamilton puts it Federalist 76. At the same time, they don’t deploy the self-interest postulate in a reductionistic way. Madison and Hamilton concede people often behave in a public spirited fashion as well. They repeatedly point to the delegates who attended the Constitutional Convention as illustrating a group of officials who often set aside narrow individual interest in deference to the broader public good.

The political problem, however, is that Publius doesn’t believe a nation can count routinely on virtuous officials. A constitution written to require that only the best and the brightest staff the government is one that aims too high; it sets the groundwork for its own failure. As Madison put it famously in Federalist 10, “It is in vain to say, that enlightened statesmen will be able to adjust these clashing interests, and render them all subservient to the public good. Enlightened statesmen will not always be at the helm.”

Madison adds a few lines beyond that neither religion nor morality normally act to curb people’s pursuit of immediate interest. The reins of religion and morality, weak enough when it comes to curbing individual injustice, become all the weaker when individuals gather in groups, which they do when they gather together a legislators.

If the impulse and the opportunity be suffered to coincide, we well know that neither moral nor religious motives can be relied on as an adequate control. They are not found to be such on the injustice and violence of individuals, and lose their efficacy in proportion to the number combined together, that is, in proportion as their efficacy becomes needful.

While humans are not slaves to their interests, Publius regularly takes it as a fair approximation of human behavior to look at the interests people have, then to predict behavior based on actions that would help them achieve those interests. Publius articulates the microfoundations for expected behavior of politicians and government officials. It is implicit in The Federalist, and it is a soft version of rational choice theory given the existence of other motivations, both higher and lower, as well. Nonetheless Publius’s analysis habitually incorporates central postulates of rational choice theory and applies the theory to understand and predict expected behavior of government officials. Two-hundred years later, James M. Buchanan won the Nobel Memorial Prize in Economics for introducing the same insight to modern economics. Prior to Buchanan, economists generally black-boxed government behavior in their models, assuming government officials would neutrally implement optimal policies irrespective of the individual-level incentives they faced.

Contrary to conventional wisdom, rational choice theory is not identical to the assumption homo economicus. The modeler can specify any goals for people to pursue, even altruistic or self-sacrificial ones. Homo economicus appears regularly in The Federalist, however. In Federalist 10, for example, while different opinions regarding religion and politics can prompt faction, economic motivations are the most palpable according to Madison. So “the most common and durable source of factions has been the various and unequal distribution of property.” And later, discussing the inescapability of avoiding factious temptations in legislation, Madison observes that, in crafting appropriation bills, “Every shilling with which [legislators] over-burden the inferior number, is a shilling saved to their own pockets.”

Publius makes persistent appeal to self-interest as an analytical and predictive device throughout The Federalist. It is its methodological leitmotif. But while centrally important to understand and apply when designing a constitution, Publius does not reduce human behavior to self-interest. Hamilton pointedly dismisses the totalizing turn in Federalist 76,

The supposition of universal venality in human nature, is little less an error in political reasoning, than that of universal rectitude. The institution of delegated power implies, that there is a portion of virtue and honour among mankind, which may be a reasonable foundation of confidence: and experience justifies the theory. It has been found to exist in the most corrupt periods of the most corrupt governments.

Despite the comment, however, in actually applying a moderately Augustinian anthropology to the issue at hand in Federalist 76 – the President’s appointment power with the advice and consent of the Senate – Hamilton appeals more to the remediating features of the Constitution’s approval process than to any internal disposition toward rectitude in human nature. He argues safety lies not in the general rectitude of the President’s intentions, but rather in the daunting collective action problem the President would have to solve in order to corrupt the entire Senate. So it’s “the institution of delegated power” that improves the inclination of human heart rather than an intrinsic “portion of virtue and honour.”

Here Hamilton is playing a riff off Madison’s well-known theme in Federalist 51. Indeed, Madison’s argument in Federalist 51 represents the apogee of the role self-interest plays throughout The Federalist. Madison grants the human inclination, yet argues that the separation-of-power system takes advantage of and channels self-interest in a way that sustains liberty rather than threatens it. “This policy of supplying by opposite and rival interests , the defect of better motives, might be traced through the whole system of human affairs, private as well as public.”

The invisible hand the process by which vice (self-interest) produces virtue (the welfare of others) was well-known in America by this time. It’s not simply a matter of whether Adam Smith had been digested among the Constitution’s framers: The idea that virtue could derive from vice was a well-known intellectual problem in Scottish moral philosophy of the time.

Nonetheless, Publius does reduce human behavior to self-interest. Honor, virtue, courage, and more, can often motivate human action. Publius simply does not believe those behavioral aspirations should be assumed to motivate human behavior consistently enough to found a constitution on their assumption. Rather, the separation-of-power system creates an institutional safety net for the way Publius expected most politicians to act most of the time.

There is also a lesson in Publius’s use of self-interest for modern readers of rational choice scholarship as well. The upshot of the deployment of modern rational choice theory is actually much the same as it is in The Federalist. It’s not an analytical problem when government officials pursue the public good on their own. That’s great when they do. But it’s foolish to assume government officials neutrally implement the best policies as a matter of course. As with Publius, the trick to understanding the robustness of a constitution’s design is what happens when the best and the brightest are not in charge.

That is the Madisonian project (and the Hamiltonian project as well). Positing self-interested government officials isn’t intended as a totalizing ontological or anthropological claim about human nature. It’s an analytical convenience to test and understand the robustness of our political system. The issue is how bad, or how not-so-bad, things will get in the U.S. separation-of-power system when those in charge are neither the best nor the brightest. This is a modest theoretical goal, and one in which modern rational choice theory seeks merely to echo Publius’s methodology in The Federalist.



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