James Buchanan pioneered important new directions for
economics through his development of the theory of Public Choice, which applies
the logic of the marketplace to the political and legal realms. In so doing, he explained the dynamics of
voting coalitions, pressure groups and pork barrel politics. Buchanan’s early work on public debt theory
challenged the Keynesian orthodoxy and predicted the large budge deficits
experienced in recent years.
The
Nobel Committee recognized Professor Buchanan “for his development of the
contractual and constitutional bases for the theory of economic and political
decision.”
Quotes from James Buchanan’s October 1987 lecture at
I was specifically asked to discuss
my evolution as an economist, an assignment that I cannot fulfill. I am not a “natural economist” as some of my
colleagues are, and I did not “evolve” into an economist. Instead I sprang full blown upon intellectual
conversion, after I “saw the light.” I was indeed converted by Frank Knight, but
he almost single-mindedly conveyed the message that there exists no god whose
pronouncements deserve elevation to the sacrosanct, whether god within or
without the scientific academy.
Everything, everyone, anywhere, anytime – all
is open to challenge and criticism.
There is a moral obligation to reach one’s own conclusions, even if this
sometimes means exposing the prophet whom you have elevated to intellectual
guruship.
There are subtle but important
differences between the allocationist-maximization and the
catallactic-coordination paradigm in terms of the implications for normative
evaluation of institutions. In
particular the evaluation of the market order may depend critically on which of
these partially conflicting paradigms remains dominant in one’s stylized
vision. To the allocationist the market
is efficient if it works. His test of the market becomes the comparison
with the abstract ideal defined in his logic.
To the catallactist the market coordinates the separate activities of
self-seeking persons without the
necessity of detailed political direction. The test of the market is the comparison with
its institutional alternative, politicized decision making.
I recognize of course that my own
research-publication record may be interpreted as the output of a
methodological and normative individualist whose underlying purpose has always
been to further philosophical support for individual liberty. In subjective recall, however, this
motivational thrust has never informed my conscious work effort. I have throughout my career and with only a
few exceptions sought to clarify ambiguities and confusions and clear up
neglected pockets of analysis in the received arguments of fellow economists,
social scientists, and philosophers. To
the extent that conscious motivation has entered these efforts, it has always
been the sheer enjoyment of working out ideas, of creating the reality that is
reflected finally in the finished manuscript.
Additional resources on James
Buchanan are available at the Nobel web
site.