Political Entrepreneurs

The Economic Engine of Political Change

James M. Buchanan: A Compendium of Remembrances

January 10th, 2013 by Edward Lopez

Donald Boudreaux and Alex Tabarrok have already provided very useful lists of commentary about the passing of Jim Buchanan. Here, I add my own perspectives, admittedly with some overlap.

  1. The New York Times obituary is an excellent place to start and a solid overview of Buchanan’s life and work: A similar article at Bloomberg fills in additional interesting details.
  2. Also an excellent introduction to Buchanan’s life and work, George Mason University produced this video, “Daring to be Different,” in 2009.
  3. One of Buchanan’s most prolific students, and a past president of the Public Choice Society, Randy Holcombe, offers a fine summary of Buchanan’s realistic analysis of how governments actually work in practice.
  4. Robert Higgs, in typical eloquent fashion, weaves an insightful and enjoyable portrait of the person and his work.
  5. Mario Rizzo accentuates Buchanan’s Austrian streak and the very strong philosophical foundations that girded his work.
  6. David Boaz at the Cato Institute conveys the substance of Buchanan’s thoughts on spontaneous order.
  7. Steve Horwitz discusses Buchanan as a scholar and teacher at Bleeding Heart Libertarians.
  8. Brian Doherty at Reason discusses the place of Buchanan among the cadre of libertarian thinkers.
  9. Tim Groseclose covers the market failure vs. government failure aspect of Buchanan’s legacy.
  10. Dylan Matthews at the Washington Post’s Wonk Blog offers some terrific photographs and discusses the implications of Buchanan’s work for public policy and constitutional design; he also usefully points to a few of the main critics of public choice theory.

Summing up: This flurry of insightful and touching commentary carries a couple of common themes:

First, these comments emphasize the body of work for which Buchanan is best known — namely the economic analysis of political processes, better known as public choice and constitutional political economy — and its implications for designing social rules and public policy.

Second, they connect Jim’s scholarly output and impact to his personal qualities — namely his work ethic and his anti-establishment or “maverick” disposition. Two remarks stand out in this regard:

From #2 above, Tyler Cowen:

I think the key to understanding Buchanan is just to understand how he works. Every morning he gets up quite early, and he starts working quite early. And he’s very regular and very devoted to the craft of being an economist and being an intellectual in a way that I think is quite unique. And that to me is the most memorable thing about him. It goes beyond any particular contribution. This notion of how to work, how to think, how to live. To take ideas very seriously and to treat them as such, and to communicate that to other people in an infectious way — I think is ultimately his greatest contribution.

And from #4 above, Bob Higgs:

[T]he hallmark of Buchanan’s work from beginning to end was a deep seriousness of purpose and procedure that not many economists have matched in the past century. Unlike the typical mainstream economist, Jim was never just fooling around, toying with a tweaked model or a trivial, throw-away idea. To a rare degree, he kept his eyes focused on the prize of true economic understanding.

As Buchanan himself wrote in 1982 about the spontaneous order of the market process, “The ‘order’ is, itself, defined as the outcome of the process that generates it.” He could have been speaking about the order that flowed from his own pen.

What’s missing from this flurry of commentary: While Buchanan is best known for the economics of politics, his remarkable contributions to this field are simply one branch, or one set of implications, of his deepest contribution to social science. In particular, in my view Buchanan’s deepest contribution was to re-orient economics (and social science more generally) as a science of exchange rather than of allocation. The clearest statement of this contribution lies in Buchanan’s 1963 presidential address to the Southern Economic Association, “What Should Economists Do?” which was later built out into a book with the same title. Two papers co-authored with Yong Yoon from 1999 and 2000 also represent this deeper aspect of Buchanan’s work. I will elaborate in a follow-up post.

Note: updated to correct two typo’s. EJL

Madmen, Intellectuals, & Academic Scribblers

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.189, ch.7)

The most successful entrepreneurs know what they do well, they know the market and the opportunities within it, and they choose those activities that create the most value. This is true in economic as well as political markets.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.178, ch.7)

[W]hen the right elements come together at the right time and place and overwhelm the status quo, it is because special people make it happen. We call them political entrepreneurs.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.176. ch.7)

While we started this book with Danny Biasone saving basketball, we end it with Norman Borlaug saving a billion lives. These stories are not that different. Both faced vested interests, which were reinforced by popular beliefs that things should be a certain way—that is, until a better idea came along.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.174, ch.6)

Because there was a general belief that homeownership was a good thing, politicians found the public with open arms.... Everybody was winning—except Alfred Marshall, whose supply and demand curves were difficult to see through the haze of excitement at the time, and except Friedrich Hayek, whose competition as a discovery procedure was befuddled... In short, once politicians started getting credit for homeownership rates, the housing market was doomed.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.166, ch.6)

Everyone responded rationally to the incentives before them. In short, the rules that guided homeownership changed over time, which in turn changed the incentives of these actors. And bad things happened.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.153, ch.6)

They understood the economics. The ideas had already won in ... the regulatory agency itself. All that remained to be overcome were some vested interests and a handful of madmen in authority.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.146, ch.6)

If the idea for auctions of spectrum use rights had been part of the public debate since at least 1959, why didn’t the relevant institutions change sooner? What interests stood in the way?

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.121, ch.5)

When an academic scribbler comes up with a new idea, it has to resonate well with widely shared beliefs, which in turn must overcome the vested interests at the table. Many forces come together to explain political change, even though it may seem like coincidence of time and place.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.120, ch.5)

It’s the rules of the political game that deserve our focus, not politicians’ personalities or party affiliations.

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From the Pages of Madmen, Intellectuals, and Academic Scribblers (p.119, ch.5)

In short, ideas are a type of higher-order capital in society. Like a society that is poor in capital and therefore produces little consumer value, a society that is poor in ideas and institutions will have bad incentives and therefore few of the desirable outcomes that people want.

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