Thursday, January 10, 2013

Remembering James Buchanan

James Buchanan, noted Economist, died yesterday at the age of 93.  To quote an editorial in the 1/10/13 issue of the WSJ:

Though a free-marketeer to his bones, [Buchanan] made his biggest mark and won the Nobel Prize in 1986 for his work studying economic incentives in government.

With Gordon Tullock, Buchanan developed what became known as “public choice theory”.  Buchanan described it as the application of the profit motive to government: “It presupposes that if there is value to be gained through politics, persons will invest resources in efforts to capture this value”. 

In other words, Buchanan theorized that public officials often act in their own self-interest rather than the public’s interest.

While that might seem a quaint notion to my younger readers, it was ground-breaking theory at the time.  I grew up in the 60’s, in Alabama. To paraphrase the Chinese proverb, they were indeed “interesting times”. Civil rights, Women’s rights, Vietnam, rampant drug use – so many social issues that roared to the forefront of American consciousness.  Previously, Americans really did believe that public officials were more nobly motivated and trustworthy than were business and other private-sector people.  We believed that public officials acted only in the public interest.

Then came Nixon.  Slowly, Americans woke up to the reality that public officials didn’t deserve our blind trust. 

Buchanan’s thoughts seem as relevant today as in 1986.  Witness the paralysis in Congress in its “handling” of the fiscal cliff.  It had nothing to do with serving the American people.  It was about political gamesmanship. 

 “The only thing new in this world is the history that you don’t know” … Harry S. Truman