Political Entrepreneurs

The Economic Engine of Political Change

New Memorials of Jim Buchanan

August 18th, 2013 by Edward Lopez

Some noteworthy memorials have been published since my last post on memorials to Jim Buchanan.

Perhaps most noteworthy are Geoff Brennan’s in Public Choice and Bob Tollison’s in the Southern Economic Journal. Links to both are gated, but most of the Brennan piece can be browsed free of charge. Both offer somewhat personal reflections.

Geoff talks about Buchanan’s normative use of the word “optimal” — with reference to his own death — and how Buchanan wasn’t one to revise and keep coming back to prior works. Instead, he would just put it out there, and that is how it would stay.

Bob recounts some of Jim’s hobbies, including sports, wood chopping, and widespread reading and traveling. I reproduce three of the best passages, the first on how Bob recalled Jim’s work habits.

After graduation, Jim and I became coeditors and subsequently coauthors. I remember well what it was like to work with  Jim. Casual discussion in my office resulted when Jim roamed the halls in search of conversation during the afternoon. He would frequently get an inspiration or a new idea, and the next morning a typed draft of a paper (on yellow onionskin) would appear on my desk.  The process was a little frustrating because when you read it there were few improvements you could make to what he had done.

Then, describing the two decades working as Jim’s colleague:

The high point, of course, would be the day in 1986 when Jim won the Nobel Prize in Economic Science. What a day. What a time. What a good feeling to bask in the afterglow of Jim’s Nobel, fittingly the last Nobel to be tax-free. I told Him more than once that serving as his colleague held an honor that I place before all others (not that there are so many that have come my way.) As someone once said, he was an entire university in and of himself.

And ending as Bob’s essay does, with a long tail of scholarly legacy, to which I nod in complete agreement:

Along with fellow members of the SEA, I salute the life and times of a former President and active participant in our affairs. His great mind is now still, but he lives on in the ideas he passed on to his students, colleagues, and friends. It has been said that only poets and songwriters are immortal, but as an economist, Jim’s work surely approaches immortality because it will continue to be read and discussed throughout time to come. We still read Adam Smith (at least some of us), and it is a good bet that over 200 years from now, young scholars will pore over Jim’s articles and books in search of ideas, insights, and inspiration. This may not be an eternity, but it is a very long half-life. Better yet, maybe some future political generation will see fit to put our fiscal house in order and in so doing pay homage to our memory of Jim Buchanan. Rest in peace.

Indeed. Here is my interpretation of Buchanan’s SEA presidential address, where I argue that his breadth and depth as an economist go beyond what many attribute to his legacy.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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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The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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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The Economic Engine of Political Change

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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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The Economic Engine of Political Change

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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.

Madmen, Intellectuals, & Academic Scribblers

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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.

Madmen, Intellectuals, & Academic Scribblers

The Economic Engine of Political Change

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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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