Political Entrepreneurs

The Economic Engine of Political Change

Robert D. Tollison on James M. Buchanan

February 15th, 2014 by Edward Lopez

I previously listed and commented on several published memorials of James M. Buchanan. Many academic journals have since published special issues on Buchanan as well as customary memorial essays. I wanted to update my earlier posts by conveying some more of Bob Tollison’s memorial in the Southern Economic Journal.

Bob was my professor and dissertation advisor at George Mason from 94 to 97. Jim Buchanan was also on the faculty of course, and while I got to interact with him extensively in seminars and on my dissertation, I regret never having sat in his classroom. I stayed in regular touch with Bob, and occasionally chatted with Jim. I got to know Jim better in 2012 when we visited regularly about the Public Choice Society. So it was with close-up interest that I read this memorial by my professor about his professor. Here are a few lines from the opening:

Jim was a colleauge on the same faculty with me for 17-18 years. These years featured low and high points. An example of the former was a bitter departmental struggle at Virginia Tech, which ended with the move of the Center [for the Study of Public Choice] to George Mason. The high point, of course, would be the day in 1986 when Jim won the Nobel Prize, fittingly the last Nobel to be tax-free. I told Jim 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 here is the closing of it:

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 contiue 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 wil 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 doing so pay homage to our memory of Jim Buchanan. Rest in peace.

*– Robert D. Tollison, “James M. Buchanan In Memoriam” Southern Economic Journal, July 2013.

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.

Madmen, Intellectuals, & Academic Scribblers

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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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?

Madmen, Intellectuals, & Academic Scribblers

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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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