Remembering James Buchanan

Atlas honors the life and achievements of the great economist Dr. James M. Buchanan, who died January 9, 2013. We express our heartfelt condolences to family, friends and the broad community of scholars, students and other fans who have been enlightened by his work. Atlas’s Leonard Liggio reflects on the life of Dr. Buchanan.

I first met Jim Buchanan in June, 1959 at a Seminar on Political Economy at University of North Carolina, Chapel Hill sponsored by the William Volker Fund. Each summer the Volker Fund organized three summer seminars of ten days duration at Chapel Hill, directed by Clarence Philbrook, Treasurer of the Mont Pelerin Society, at Wabash College, directed by Ben Rogge, and at Claremont Men’s College directed by Arthur Kemp, later Treasurer of the Mont Pelerin Society. The Volker Fund seminars typically had three lecturers with afternoon seminars to discuss the lectures. Lecturers included Ludwig von Mises, Frank Knight, David McCord Wright, Bruno Leoni (Freedom and the Law were his Volker Fund lectures), Felix Morley, and Milton Friedman, whose Capitalism and Freedom were lectures in the Volker Fund seminars. The seminars were aimed at university faculty. I was a graduate student. Another participant was Israel Kirzner of NYU. In 1959 the UNC lecturers were F. A. Hayek, lecturing from the manuscript for The Constitution of Liberty; Herrell de Graff, American economic historian at Cornell University (later head of the American Meat Institute),and the third position was divided between two young economists, Greg Lewis, labor economist of University of Chicago and James Buchanan of the University of Virginia. I was particularly interested in Jim Buchanan’s drawing on the Italian fiscal school, and on Knut Wicksell and unanimity theory. Jim Buchanan was a clear teacher. I became re-acquainted with Jim Buchanan when the Institute for Humane Studies affiliated with George Mason University and moved to Fairfax in 1985.

Below you will find biographical information and commentary about the impact of his ideas.

Read Bloomberg News writeup about his life and impact.

New York Times obituary.

Wall Street Journal tribute by Don Boudreaux (subscription required).

More biographical information and an overview of his work in economics.

1986 Nobel-prize Press Release

Buchanan Receives a Lifetime Achievement Award from Atlas’s FSSO in 2010.

Commentary from Atlas’s Emannuel Martin:

“An intellectual giant passes away”

American economist James M. Buchanan, winner of the Nobel Prize in Economics in 1986 died today at 93.

Together with Gordon Tullock, Buchanan co-initiated the sub-discipline of Public Choice Economics with the 1962 book The Calculus of Consent, and then the academic journal Public Choice. The idea that government failure was probably worse than market failure was thus injected in economic analysis. The notion that rules of the game matter “big time” to understand how the “social game” is played made Buchanan start constitutional economics. His reflections in The Limits of Liberty made him one of the main thinkers on the relationship between government and freedom.

In his famous “What Should Economists Do?” Buchanan criticized a mainstream economic idea that envisions economics as a science of “allocation of scarce resources” (following Lionel Robbins’ famous definition), or a science of “choice”, a definition which is in fact the surest path to a dangerous social engineering. He instead refers to economics as a science of exchange – the origin of value creation – and advocates the need for economists to better understand institutions which enable and secure exchange.

His writings in methodology also include a beautiful book on a defense of the subjective theory of cost, Cost and Choice, with obvious, critical implications for “objective” welfare economics.

His latest works include a crucial reading of Adam Smith’s theory of economic evolution based on the idea of the division of labor being limited by the extent of the market. After Allyn Young’s analysis of Increasing Returns and Economic Progress, Buchanan coined the concept of “generalized increasing returns”: increasing the network of exchange generates more opportunities for division of labor, thus more productivity, and thus more growth. This has tremendous consequences in terms of defense of freer trade or of the “work ethics” critique of limitation of working hours (such as the 35-hours-a-week in France).

A critique of Keynesian economics and unchecked government spending, James M. Buchanan made an enormous contribution to the cause of sound economics and of liberty.

Dr. Emmanuel Martin is the editor of the Atlas Economic Research Foundation’s francophone project and Executive Director of the Institute for Economic Studies – Europe in Paris.

Gonzalo Schwarz’s tribute to Dr. Buchanan

The life and work of James M. Buchanan (1919-2013)

I was never a student of James M. Buchanan nor was I fortunate enough to call him my colleague or friend. Before I arrived to George Mason University (GMU) in 2008 I had never even known about him or the field of Public Choice. My current understanding of his work and personal life comes through the magnificent exposure I received to his ideas and the stories told about him while I was studying at GMU under some of his brightest students such as Peter Boettke, Daniel Klein, and former colleagues of his such as Walter Williams and Richard Wagner.

I was blessed to have the chance to attend four lectures he gave on different occasions. The last one being at Sandra Peart and David Levy’s Summer Institute for the History of Economic Thought in which Buchanan was a permanent feature in the program until its latest edition in 2012. My only interaction with him was to ask long-winded questions to which I received, in his characteristic style, short and straightforward answers. I was also lucky to have him sign a copy of one my favorite books, The Limits of Liberty.

The following words on James Buchanan will not do justice to either his work or personal life. But I will try my best to show the brilliance of his work and some personal traits of his that were transmitted to us as students at GMU. James Buchanan was born in 1919 in Tennessee and passed away at the age of 93 on January 9. He was active academically and doing research up until his last few months. He earned a Ph.D. in economics from the University of Chicago upon his return from serving in World War II. He later taught at Florida State University, the University of Virginia, UCLA, Virginia Tech, and last but not least my alma matter George Mason University. His main contribution to economics, and the social sciences more generally, was developing the field of Public Choice along with Gordon Tullock and other economists who were with him from the beginning and contributed a lot to his research such as Ronald Coase. However, being as humble as he was he always said he saw his contributions as just adding to the work of others who started and contributed to the field many years before him.

He was at George Mason when he was awarded the Nobel Prize in Economics in 1986. The press release from his 1986 Nobel Prize which details his academic contributions and the reason why he was awarded the Nobel Prize is linked above. A famous story known around the economics department at GMU is when he was awarded the Nobel Prize and the media arrived at GMU they asked him to define what Public Choice consists of. He did so by using only the following phrase: “Don’t let the fox guard the henhouse.”

Buchanan’s original view on what the field of Public Choice represented was the study of non-market decision making. This became the first name of the research program originated by Buchanan and Tullock. Even though they didn’t like the name and eventually changed it to Public Choice this exemplifies the broad approach of Public Choice and even more so, the bigger nature of Buchanan’s contributions. Like many of his former colleagues mention in this video called “Daring to be Different” he was much more than only an economist, he was a deep social thinker and theorist. In my opinion, even more than just a theorist, he was also practical and his thought exercises obliged his students and readers alike to go down to the most elemental aspects of human life.

When discussing public choice, many people think of it mostly as something that occurs only at a government level. However, Buchanan goes into the most basic level of human interaction and association. He explores through his writings the mechanisms by which people interact in various settings and go about setting the rules of the game, and then later analyzing their interaction within those sets of rules. He believed public choice or non-market decision making spans home-owners associations, communities, and clubs which goes far beyond any government level, whether federal, state, or local. Buchanan believed that in non-market settings when there was no price system which could guide their behavior people still acted out of self-interest and were able to devise rules of the game under which to interact and resolve conflict situations.

In a seminal paper of his (which later on became a book) called “What Should Economists Do?” Buchanan dared to be different and challenged his fellow economists to go back to the origins of economics and study the coordination of the market process and not the maximization of equation which supposed to represent economic agent’s behavior. He urged his colleagues to go back to what Peter Boettke’s has accurately dubbed the mainline of economics and not the mainstream in his latest book Living Economics.

A good synthesis of the basic propositions that drove Buchanan’s research and career is given by Professor Boettke[1]:
1. Economics is a “science” but not like the physical sciences. Economics is a “philosophical” science and the strictures against scientism offered by Frank Knight and F. A. Hayek should be headed.
2. Economics is about choice and processes of adjustment, not states of rest. Equilibrium models are only useful when we recognize their limits.
3. Economics is about exchange, not about maximizing. Exchange activity, arbitrage, that should be the central focus of economic analysis.
4. Economics is about individual actors, not collective entities. Only individuals choose.
5. Economics is about a game played within rules.
6. Economics cannot be studied properly outside of politics. The choices among different rules of the game cannot be ignored.
7. The most important function of economics as a discipline is its didactic role in explaining the principle of spontaneous order.
8. Economic is elementary.

On a more personal level of his life, GMU graduate students always hear about James Buchanan’s exceptional work ethic. He led by example arriving at the university at 6:30 am and did not leave until late at night.

In terms of Atlas work he has attended and contributed to many of our programs including serving as a judge to the International Fisher Awards now in its 23 year. This competition rewards outstanding publications by think tanks in the Atlas network. His last association with Atlas was when he was awarded the Lifetime Achievement Award by the Fund for the Study of Spontaneous Orders in 2010 ( William Dennis, who directs the project with the help of various scholars such as Peter Boettke and Atlas staffers Leonard Liggio and Alex Chafuen, organized the award ceremony in September 2010 and hosted a panel in Buchanan’s honor with two other nobel laureates, Amartya Sen and Elinor Ostrom.

As I mentioned earlier, this does not do justice to all of his lifetime achievements, contributions and to the lives and careers he has touched either with his southern charm or research program. But I believe the full impact of his work is yet to be seen as it will be transmitted for generations to come by his colleagues, former students, and all the future students who will continue his legacy through the vast bibliography he leaves behind.

To close I just wanted to include one of my favorite Buchanan quotes of all times which I think embodies many aspects of his work:

“……constitutional economics for me, must be acknowledged to rest upon a precommitment to, or faith in if you will, man’s cooperative potential. Persons are neither bees in hives, carnivorous beasts in a jungle, nor angels in God’s heaven. They are independent units of consciousness, capable of assigning values to alternatives, and capable of choosing and acting in accordance with these values. It is both physically necessary and beneficial that they live together, in many varying associations and communities. But to do, they must live by rules that they can also choose. ”

[1] Boettke, Peter J., “James M. Buchanan and the rebirth of political economy”, in Ric Holt and Steven Pressman, eds., Economics and Its Discontent: Dissent in 20th Century Economics (Edward Elgar Publishing, 1998): 21-39

Comments are closed.