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James Buchanan, RIP

Posted By Kurt Schuler On January 9, 2013 @ 11:58 pm In Economic Thought,Events,Financial Markets,Money & Politics | 5 Comments

James Buchanan died today at the age of 93. He is best known as the founder, with Gordon Tullock, of the “public choice” school of economic thought, which uses ideas that had been applied to market exchange and expands them into nonmarket decision making, especially politics.

The effect of public choice thought has been, at least among many economists and political scientists, to dispel misplaced romance. Public choice is built on the simple but profound insight that men do not cease to be self-interested merely because they work in a government office rather than in a business. Failing to understand the pervasive nature and consequences of self-interest leaves a country’s citizens open to endless disappointment as they expect from government purity of motives and effectiveness of outcomes that it cannot deliver, including, of course, in monetary matters.

Even though public choice is a broad field, Buchanan’s interests were broader still. He reflected deeply on the foundations of the market economy and the implications for economic analysis of the subjective nature of costs. Most relevant for this blog, he dabbled provocatively in monetary theory. He only half jestingly proposed basing a monetary standard on the brick as a unit less subject to tampering than national currencies (see this summary, pages 12 onward).

I never took a course from Buchanan while I was a student at George Mason University. Before I enrolled I had already absorbed some key elements of the public choice outlook. Besides, he had just won his “Nobel” Prize and was doing what most of the winners have done: spending a lot of time taking his message to the wider audience around the world that he had earned. I did attend seminars where Buchanan was present, public lectures he gave, and other events he attended, and heard about him from my classmates who took classes with him. He impressed me as someone who had had wisdom for a long time, well before its usual appearance near the end of one’s career. Such people are ¬†even rarer in universities than in the world at large.

Lars Christensen has collected some links about Buchanan.

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