Briefly describe the influence of majority rule on the individual consumption–payment link.

Question

What will be an ideal response?

Answer 1

In private markets, when a shopper goes to the supermarket to purchase groceries, the shopping cart is filled with many different goods that the consumer presumably wants and is willing to pay for; the shopping cart reflects the individual consumption–payment link. The link breaks down when an assortment of political goods is decided on by majority rule. These political goods might include such items as additional national defense, additional money for the space program, new museums, new public schools, increased foreign aid, and so on. Even though an individual may be willing to pay for some of these goods, it is unlikely that she will want to consume or pay for everything placed in the political shopping cart. However, if the majority decides that these political goods are important, the individual will have to purchase the goods through higher taxes, whether she values the goods or not.