It was with great sadness that I learned that James Buchanan, a godfather of the public choice school of economics passed away this morning. Buchanan was awarded the Nobel Memorial Prize in Economic Sciences in 1986 for his groundbreaking work in constitutional economics, and indeed, our readers might be interested in his lovely 1980 book called The Power to Tax: Analytical Foundations of a Fiscal Constitution. In it, he and Geoffrey Brennan examine the question of what limitations on taxing power citizens should agree to if they were participating in an initial social contract.
Buchanan’s model of government action was based on a theory of “politics without romance,” which contended that policymakers act in their own self-interest the same way that market actors do. This means that politicians are not enlightened, selfless despots, and respond to the incentives of the political sphere, making policy that will help get them re-elected. Often the best way to do that is by catering to special interests. The longer I work in this city, the more I see this observation as true to life.
I asked around this morning if any of our staff had some anecdotes about Buchanan that they would like to share, and our Chief Economist Will McBride had a few gems he remembered from taking classes with him:
1) I think his most important contribution, found in The Calculus of Consent (which was coauthored by Gordon Tullock) was to demonstrate the inherent tradeoff between decision-making costs and externalities. It means that majority rule systems "get a lot done", but at the expense of all those who are in the minority. It caused a lot of economists to look more skeptically at the democratic process. This was lost knowledge, as the framers of the Constitution had expressed concerns about the “tyranny of the majority.”
2) In 2006 he was asked if anyone alive today deserved a Nobel Prize but hadn't gotten one. He thought long and hard and said, “No, I think all the obvious ones have been given.” Gordon Tullock was sitting right next to him.
3) One day in class he said quite proudly, “I have never done a regression analysis in my life.”
4) Someone asked him once if he'd rather be famous in his lifetime and then forgotten or forgotten in his lifetime and then famous forever. He chose forever famous. But he had to think about it.
Buchanan was brilliant, prolific and still sharp into his 90s. I’d echo Donald Boudreaux’s sentiments this morning that he was “one of the greatest and most profound scholars of the 20th century.” He will be missed.
Thoughts from our friends at the Cato Institute, the Heritage Foundation, and Reason.
Follow Scott Drenkard on Twitter @ScottDrenkard.
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