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Buchanan's Big Idea.

James M. Buchanan and Liberal Political Economy: A Rational Reconstruction

By Richard E. Wagner

220 pp.; Lexington Books, 2017

From publishing trends in 2017, it seems like James Buchanan might be the official "recently deceased economist" of The Age of Trump. He was the villain in Nancy MacLean's fundamentally flawed conspiracy tract Democracy in Chains (see "Buchanan the Evil Genius," Fall 2017), and his misadventures with the administration at the University of Virginia figured prominently in David Levy and Sandra Peart's Escape from Democracy (see "The Discontented Animal," Summer 2017).

Given the breadth, depth, volume, and multidisciplinary importance of his contributions, it stands to reason, perhaps, that there would develop a field we might call "Buchanan Studies." Buchanan's student and then longtime colleague and collaborator Richard Wagner is--with the possible exception of Geoffrey Brennan--the scholar most qualified to contribute to those studies. In James M. Buchanan and Liberal Political Economy, Wagner explores some of Buchanan's most important ideas and how they are relevant to 21st century political economy.

It is important to state at the outset what this book is and what it is not. It is a discussion of Buchanan's ideas and why they might be relevant or useful to active scholars. It is not an "intellectual biography" of Buchanan in the strict sense, and Wagner is clear on this. He makes much of Buchanan's influences, but he offers a topic-by-topic discussion of his ideas rather than a chronological account of their development, and his approach is fundamentally analytical. The book also discusses the ideas' place in intellectual history and 21st century political economy. It draws from Wagner's intimate knowledge of Buchanan the man and the scholar, as well as the collaborative work Wagner and a generation of younger scholars have done developing what Wagner calls "entangled political economy." It is, as he puts it, his "interpretation of the contemporary meaning and significance of Buchanan's oeuvre, as filtered through my 50-year association with him as a student, colleague, and coauthor."

Political economist / This book is not an exegetical exercise, but it is still relevant to how we understand Buchanan as a product (or not) of the time in which he wrote and his broader cultural influences. This takes on importance, even urgency, in light of MacLean's thorough misunderstanding of Buchanan's overall program.

MacLean makes much of Buchanan's classical liberal sympathies, Tennessee upbringing, and career spent mostly in Virginia. To her, Wagner might respond with this passage:

Buchanan was a classical political economist who entered the scholarly world during the heyday of the neoclassical period of economics. Consequently, he was often misconstrued as a neoclassical economist with right-wing ideas. That view is wrong; it reflects the common tendency of people to interpret other people and events in terms of the main currents in play at the time. While Buchanan worked during the heyday of the neoclassical period in economics, he was a classical political economist in the style of Frank Knight and not a neoclassical economist of post-war Chicago vintage.

This is a key insight if we are to understand Buchanan with reference to the intellectual and political world he inhabited. Buchanan the classical political economist was squarely outside the mainstream of economics but squarely inside the main line of economics stretching back through Friedrich Hayek to Adam Smith, to use George Mason economist Peter Boettke's characterization. He made use of equilibrium constructions, but Buchanan's political economy was largely classical rather than neoclassical, emphasizing economics as a science that studies exchange and social processes rather than resource allocation and the efficiency properties of equilibria. Buchanan won the Nobel Prize in 1986 for this work, the most important application of which was in the development of Public Choice Theory, a body of theory and evidence that treats "politics as exchange" and that makes the same assumptions about political action that analysts typically make about commercial action.

Wagner goes on, then, to explore the major themes in Buchanan's intellectual system and the ways in which people have and can apply them today. It is important to note that while public choice can be pithily summarized as "economics applied to politics," public choice as Buchanan did it was not simply neoclassical economics applied to politics. It was, rather, a resurrection of classical political economy and a marriage between it and Italian public finance, which emphasized the political underpinnings of governments' taxing and spending choices. Buchanan's public choice emphasized social processes, the institutions of exchange, and the incentives facing political and bureaucratic actors. Wagner refers to "Virginia Political Economy as Classical Political Economy Italianized," and writes that "The Virginia theorists to a man focused on process and coordination, and not on resource allocation."

One big idea / Buchanan's was fundamentally an anti-elitist paradigm, which is ironic given MacLean's charge that his system is but a thinly veiled reaction against racial egalitarianism as embodied by the Brown v. Board of Education decision. Toward the end of the book, Wagner juxtaposes the egalitarianism of Buchanan with the elitism of John Maynard Keynes and notes that Buchanan's ideas lend themselves to a politics of "genuine liberalism" as opposed to the "guided or controlled liberalism" of Keynes.

To the extent that Buchanan was "reacting" to anything, it was "the presuppositions of Harvey Road"--the conceits of Keynes and his coterie who thought themselves intellectual aristocrats positioned to make "the really important decisions" on everyone's behalf. Buchanan, by contrast, put no faith in experts and argued, for example, that the Council of Economic Advisers, which had been established by the 1946 Full Employment Act, should be disbanded.

Wagner characterizes Buchanan as a "hedgehog," borrowing from Isaiah Berlin's The Hedgehog and the Fox (Weidenfeld & Nicolson, 1953). Hedgehogs, to Berlin, are thinkers with One Big Idea, while foxes are thinkers with lots of small ideas. He bases this characterization on the pattern set by Buchanan's first paper, a 1949 article in the Journal of Political Economy titled "The Pure Theory of Government Finance: A Suggested Approach." If Buchanan was a hedgehog, though, he was a foxy hedgehog, applying his One Big Idea about the importance of rules and groups to numerous settings. To Buchanan, we cannot treat a state as an independent unitary actor immune to incentives, and we have to peel back the layers of the onion in order to really get at what is meant by a "self-governing" polity.

There are Adam Smith scholars, Friedrich Hayek scholars, Karl Marx scholars, John Maynard Keynes scholars, Marcel Proust scholars, and a whole host of scholars who have dedicated their careers to exploring and understanding a single thinker's breakthrough insights. As a leading representative of the mainline tradition in the late 20th century, Buchanan is as good a candidate as any to draw the attention of specialists in intellectual history, constitutional economics, political theory, and social philosophy. For scholars seeking to acquaint themselves with his ideas, James M. Buchanan and Liberal Political Economy is an indispensable starting point.

ART CARDEN is professor of economics at Samford University.
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Title Annotation:James M. Buchanan and Liberal Political Economy: A Rational Reconstruction
Author:Carden, Art
Publication:Regulation
Article Type:Book review
Date:Dec 22, 2017
Words:1164
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