James M. Buchanan

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James M. Buchanan
James Buchanan by Atlas network.jpg
Buchanan in September 2010
Born
James McGill Buchanan Jr.

(1919-10-03)October 3, 1919
DiedJanuary 9, 2013(2013-01-09) (aged 93)
Nationality American
Institution George Mason University
Virginia Tech
University of Virginia
Field Public choice theory
Constitutional economics
Austrian economics
School or
tradition
Virginia school of political economy
Alma mater University of Chicago
University of Tennessee
Middle Tennessee State University
Influences Thomas Hobbes
John Stuart Mill
Frank Knight
Knut Wicksell
Gordon Tullock
Friedrich Hayek [1]
Ludwig von Mises [1]
Contributions Public choice theory
Logrolling
Benefit principle
Club good
Samaritan's dilemma
Awards Nobel Memorial Prize in Economic Sciences (1986)
Information at IDEAS / RePEc

James McGill Buchanan Jr. ( /bjuːˈkænən/ ; October 3, 1919 – January 9, 2013) was an American economist known for his work on public choice theory [1] (included in his most famous work, co-authored with Gordon Tullock, The Calculus of Consent , 1962), for which he received the Nobel Memorial Prize in Economic Sciences in 1986. Buchanan's work initiated research on how politicians' and bureaucrats' self-interest, utility maximization, and other non-wealth-maximizing considerations affect their decision-making. He was a member of the Board of Advisors of The Independent Institute as well as of the Institute of Economic Affairs, [2] a member (and for a time president) of the Mont Pelerin Society, [3] a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University. [4]

Contents

Background

Buchanan was born in Murfreesboro, Tennessee, the eldest child of James and Lila (Scott) Buchanan, a family of Scotch-Irish descent. He was a grandson of John P. Buchanan, a governor of Tennessee in the 1890s. [5] He attended Middle Tennessee State Teachers College (since 1965 known as Middle Tennessee State University) in 1940 by living at home and working on the farm. Buchanan completed his M.S. at the University of Tennessee in 1941. He served in the United States Navy on the staff of Admiral Chester W. Nimitz in Honolulu during World War II, when he met Anne Bakke, whom he married on October 5, 1945. Anne, of Norwegian descent, was working as a nurse at the military base in Hawaii. She died in 2005.

Buchanan identified as a socialist in his youth and was unaware of the University of Chicago's strong market-oriented approach to economics. His studies there, particularly under Frank H. Knight, converted him to "a zealous advocate of the market order". [6] Buchanan received his Ph.D. from the University of Chicago in 1948 with a thesis on "Fiscal Equity in a Federal State", which was heavily influenced by Knight. It was also at Chicago that he first read and found enlightening the work of Swedish economist Knut Wicksell. [7] Photographs of Knight and Wicksell hung on his office walls ever after.

Buchanan's original political and economic views leaned heavily socialist and were reinforced by his stint spent in the Navy. While serving in the military, Buchanan felt soldiers from the south and west regions were discriminated against in favor of soldiers from the New England region. He believed the soldiers from the north-east universities were viewed as a part of the establishment and received promotions to officer because of their affiliations. Buchanan would state in an interview [8] with Karen Horn, “Out of the 20 boys from the establishment universities, 12 or 13 were picked. against a background of a total of 600. It was overtly discriminatory towards those of us who were not members of the establishment,”. Buchanan went so far as to say he would have become a communist had he been approached by a recruiter. Buchanan would go on to say that his socialist views were less "pro government" and more "anti-big business". His ideology did not change until attending The University of Chicago, where he began studying under Frank Knight. Then he started to advocate for a free market system. 

Career

Buchanan was the founder of the new Virginia school of political economy.

He taught at the University of Virginia from 1956-1968, where he founded the Thomas Jefferson Center for Studies in Political Economy. From 1955 to 1956 he was a Fulbright Scholar in Italy.

He taught at UCLA 1968–1969, followed by Virginia Tech 1969-1983, where he held the title Distinguished Professor of Economics and founded the Center for the Study of Public Choice (CSPC). In 1983, a conflict with Economics Department head Daniel M. Orr came to a head, and Buchanan took the CSPC to its new home at George Mason University, [9] where he eventually retired with emeritus status.

He also taught at Florida State University (1951-1956) and the University of Tennessee.

In 1969 Buchanan became the first director of the Center for the Study of Public Choice. He was president of the Southern Economic Association in 1963 and of the Western Economic Association in 1983 and 1984, and vice president of the American Economic Association in 1971.

In 1988, Buchanan returned to Hawaii for the first time since World War II and gave a series of lectures later published by the University Press.

Personal life and death

Buchanan died January 9, 2013, in Blacksburg, Virginia, at age 93. [7] The New York Times commented that the Nobel Prize-winning economist who championed public choice theory influenced a "generation of conservative thinking about deficits, taxes and the size of government". [7] The Badische Zeitung (Freiburg) called Buchanan, who showed how politicians undermine fair and simple tax systems, the "founder of the new political economy". [10] He and his wife, Ann Bakke, a nurse, had no children, but held close family ties with his sisters and nephews.

Awards

Legacy

Buchanan's legacy lives on through the Political Economic Research Institute (PERI) at Middle Tennessee State University (MTSU) which provides fellowships for both undergraduate and graduate students. [12] PERI at MTSU works with MTSU's Honors College for its undergrad fellows. The Honors college also has its own Buchanan Fellowship. [13] These fellowships honor Buchanan's academic achievement in many subjects besides economics. With respect to PERI's graduate fellowships, these are motived by academic work in the field of economics. [14]

Thinking

Buchanan's work focused on public finance, the public debt, voting, rigorous analysis of the theory of logrolling, macroeconomics, constitutional economics, and libertarian theory. [15]

Approach to economic analysis

Buchanan was largely responsible for the rebirth of political economy as a scholarly pursuit. [16] He emphasized that public policy cannot be considered solely in terms of distribution, but is instead always a matter of setting the rules of the game that engender a pattern of exchange and distribution. His work in public choice theory is often interpreted as the quintessential instance of economics imperialism; [17] however, Amartya Sen has argued that Buchanan should not be identified with economics imperialism, since he has done more than most to introduce ethics, legal political thinking, and indeed social thinking into economics. [18] Crucial to understanding Buchanan's system of thought is the distinction he made between politics and policy. Politics is about the rules of the game, where policy is focused on strategies that players adopt within a given set of rules. "Questions about what are good rules of the game are in the domain of social philosophy, whereas questions about the strategies that players will adopt given those rules is the domain of economics, and it is the play between the rules (social philosophy) and the strategies (economics) that constitutes what Buchanan refers to as constitutional political economy". [19]

In 1972, like George McGovern, Buchanan supported a 100% marginal tax rate on all inheritances above a certain amount. [20]

When conducting his economic analysis, Buchanan used methodological individualism, rational choice, individual utility maximization, and politics as exchange. [21]

Buchanan's important contribution to constitutionalism is his development of the sub-discipline of constitutional economics. [22]

According to Buchanan the ethic of constitutionalism is a key for constitutional order and "may be called the idealized Kantian world" where the individual "who is making the ordering, along with substantially all of his fellows, adopts the moral law as a general rule for behaviour". [23] Buchanan rejects "any organic conception of the state as superior in wisdom to the citizens of this state". This philosophical position forms the basis of constitutional economics. Buchanan believed that every constitution is created for at least several generations of citizens. Therefore, it must be able to balance the interests of the state, society, and each individual. [24]

Buchanan's work Cost and Choice (see below in List of publications) is often overlooked for its contributions in defining the parameters of opportunity cost. In it, he writes that the costs to individuals determine what the price of a good or service is. For example, the physical work that is required to hunt an animal as well as the price of the tools necessary to hunt it and the time spent hunting all play a factor in the price an individual places on the meat. The asking price of the meat will vary from person to person because the input costs required for each person are not the same.

Buchanan is considered to be a quasi-member of the Austrian school of economics, not formally associated with the school but sharing many common beliefs. [1] As Buchanan puts it: "I certainly have a great deal of affinity with Austrian economics and I have no objections to being called an Austrian. Friedrich Hayek and Mises might consider me an Austrian but, surely some of the others would not." Buchanan went on to say that: "I didn't become acquainted with Mises until I wrote an article on individual choice and voting in the market in 1954. After I had finished the first draft I went back to see what Mises had said in Human Action. I found out, amazingly, that he had come closer to saying what I was trying to say than anybody else." [25]

Public choice theory

James Buchanan is considered the architect of public choice theory. His work within Public Choice earned him the Nobel Prize in Economic Science in 1986.[ citation needed ] Public choice theory focuses on people's decision making process within the political realm. Buchanan used both the fields of economics and political science to help develop Public Choice. The same principles used to interpret people's decisions in a market setting are applied to voting, lobbying, campaigning, and even candidates. Buchanan maintains that a person's first instinct is to make their decisions based upon their own self-interest, which varied from previous models where government officials acted in constituents' best interest. Buchanan explains public choice theory as "politics without romance" because, he says, many of the promises made in politics are intended to appear concerned with the interest of others, but in reality are the products of selfish ulterior motives. According to this view, political decisions, on both sides of the voting booth, are rarely made with the intention of helping anyone but the one making the decision. Buchanan argues that by analyzing the behaviors of voters and politicians that their actions could become easily predicted. [26]

Works

Buchanan's works include:

A listing of Buchanan's publications from 1949 to 1986 can be found at the Scandinavian Journal of Economics, 1987, 89(1), pp. 17–37.

See also

Related Research Articles

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References

  1. 1 2 3 4 Charles W. Baird. "James Buchanan and the Austrians: The Common Ground" (PDF). Object.cato.org. Archived (PDF) from the original on March 4, 2016. Retrieved July 15, 2017.
  2. Buchanan, James M; Burton, John; Wagner, R.E. (1978). The consequences of Mr. Keynes (PDF). Institute of Economic Affairs. Archived (PDF) from the original on June 28, 2020. Retrieved September 24, 2019.
  3. "Mont Pelerin Society Past Presidents". Mont Pelerin Society. Archived from the original on September 4, 2018. Retrieved September 4, 2018.
  4. "Meet the Economist Behind the One Percent's Stealth Takeover of America". Institute for New Economic Thinking. Archived from the original on March 26, 2019. Retrieved April 25, 2020.
  5. Reuben Kyle, From Nashborough to the Nobel Prize: The Buchanans of Tennessee (Murfreesboro: Twin Oaks Press, 2012).
  6. "Ideological Profiles of the Economics Laureates". Econ Journal Watch. Archived from the original on August 9, 2020. Retrieved February 17, 2016.
  7. 1 2 3 McFadden, Robert D. (January 9, 2013). "James M. Buchanan, Economic Scholar and Nobel Laureate, Dies at 93". The New York Times . Archived from the original on June 14, 2020. Retrieved August 25, 2016.
  8. Horn, Karen Ilse. Roads to Wisdom, "Conversations with Ten Nobel Laureates in Economics," pg.94-95 Edward Elgar, 2011.
  9. William C. Mitchell (1988). "Virginia, Rochester, and Bloomington: Twenty-Five Years of Public Choice and Political Science". Public Choice. 56 (2): 101–19. doi:10.1007/BF00115751. S2CID   153671519.
  10. "Nobelpreisträger James M. Buchanan ist tot". Badische Zeitung (in German). January 9, 2013. Archived from the original on August 9, 2020. Retrieved January 9, 2013.
  11. Honorary Doctoral Degrees at Universidad Francisco Marroquín Archived May 1, 2011, at the Wayback Machine
  12. "Political Economy Research Institute | Middle Tennessee State University". www.mtsu.edu. Retrieved October 3, 2021.
  13. "Buchanan Fellowship Information | Middle Tennessee State University". www.mtsu.edu. Retrieved October 12, 2021.
  14. "Research | Middle Tennessee State University". www.mtsu.edu. Retrieved October 12, 2021.
  15. Peter Barenboim, Natalya Merkulova. "The 25th Anniversary of Constitutional Economics: The Russian Model and Legal Reform in Russia, in The World Rule of Law Movement and Russian Legal Reform Archived July 5, 2016, at the Wayback Machine ", edited by Francis Neate and Holly Nielsen, Justitsinform, Moscow (2007).
  16. Peter Boettke, "James M. Buchanan and the Rebirth of Political Economy", in Against the Grain: Dissent in Economics, ed. S. Press and R. Holt (Aldershot, UK: Edward Elgar Publishing, 1998), pp. 21-39.
  17. Amartya Sen, in Economics and Sociology, ch. 14, Princeton: Princeton University Press. p. 263
  18. R. Swedberg, Economics and Sociology: On Redefining Their Boundaries (New Jersey: Princeton University Press, 1990), p. 263.
  19. "Where Economics and Philosophy Meet: Review of The Elgar Companion to Economics and Philosophy with responses from the authors", The Economic Journal, 116 (June), 2006
  20. Lee, Dwight R. (2012). Public Choice, Past and Present: The Legacy of James M. Buchanan and Gordon Tullock. Springer Science & Business Media. ISBN   9781461459095. Archived from the original on April 18, 2021. Retrieved July 3, 2017.
  21. James D. Gwartney; Randall G. Holcombe (May 18, 2014). "Politics as exchange: the classical liberal economics and politics of James M. Buchanan". Constitutional Political Economy. 25 (3): 265. doi:10.1007/s10602-014-9165-z. S2CID   154198573.
  22. "Constitutional Economics" (PDF). Archived (PDF) from the original on August 28, 2019. Retrieved July 15, 2017.
  23. James Buchanan, The Logical Foundations of Constitutional Liberty, Volume 1, Liberty Fund, Indianapolis, 1999, p. 314
  24. Buchanan, J., Logical Formulations of Constitutional Liberty, Vol. 1, Indianapolis, 1999, p. 372.
  25. "An Interview with James Buchanan". Mises.org. Ludwig von Mises Institute. July 30, 2014. Archived from the original on September 14, 2014. Retrieved July 15, 2017.
  26. Buchanan Biography Archived March 28, 2014, at the Wayback Machine . Public Choice Theory Archived November 11, 2017, at the Wayback Machine . Public Choice explained Archived November 30, 2017, at the Wayback Machine

Further reading

Awards
Preceded by
Laureate of the Nobel Memorial Prize in Economics
1986
Succeeded by