Happy 100th Birthday, James M. Buchanan

This year’s Oct 3rd will mark the 100th birth anniversary of a man I intensely admire, just as Oct 2nd marks the 150th birth anniversary of a man I equally intensely detest, Mohandas Karamchand “Mahatma” Gandhi. Rarely do two humans occupy such diametrically opposite ends of the spectrum of human thought, action, morality and ethics.

James McGill Buchanan was born in Tennessee on Oct 3rd 1919 to a family of high social status (his grandfather was the governor of Tennessee in the 1890s) but of modest means. He received his Ph.D. in economics from the University of Chicago in 1948. He was the architect of “public choice school,”[1] and for his contributions to that academic enterprise he was awarded the Nobel Memorial Prize economics in 1986.

Ever since I finished my formal education in economics, I have been studying the works of Buchanan (among others such as Hayek and Mises.) He has shaped my worldview like no other person living or dead ever has. Since he was an economist’s economist, it is hard for me to convey the importance of Buchanan’s work to non-economists. I see the world from the perspective of public choice theory, and that is reflected in practically everything I write.

Here’s Buchanan on public choice:

Public choice did not emerge from some profoundly new insight, some new discovery, some social science miracle. Public choice, in its basic insights into the workings of politics, incorporates an understanding of human nature that differs little, if at all, from that of James Madison and his colleagues at the time of the American Founding. The essential wisdom of the 18th century, of Adam Smith and classical political economy and of the American Founders, was lost through two centuries of intellectual folly. Public choice does little more than incorporate a rediscovery of this wisdom and its implications into economic analyses of modern politics.

Here’s an extended quote from Buchanan (from his essay Economics and Its Scientific Neighbors) :

As a ‘social’ scientist, the primary function of the economist is to explain the workings of these institutions and to predict the effects of changes in their structures. As the interaction process that he examines becomes more complex, it is but natural that the task of the economic scientists becomes more intricate. But his central principle remains the same, and he can, through its use, unravel the most tangled sets of structural relationships among human beings.

The economist is able to do this because he possesses this central principle – an underlying theory of human behavior. And because he does so, he qualifies as a scientist and his discipline as a science. What a science does, or should do, is simply to allow the average man, through professional specialization, to command the heights of genius. The basic tools are the simple principles, and these are chained forever to the properly disciplined professional. Without them, he is as a jibbering idiot, who makes only noise under an illusion of speech.

I have to underline the primary message above. The average person can be like a genius in a domain such as economics provided he puts in the hard work of understanding the simple principles which form the foundation of the discipline; otherwise he is no better than a jibbering idiot.

James Buchanan, thanks for helping me in not being a jibbering idiot. Happy 100th birthday, Prof Buchanan.

NOTES:

[1] Alistair Cooke in his weekly radio broadcast on BBC Radio 4, A Letter from America, once explained the theory of public choice to his listeners as “the homely but important truth that the politicians are after all just the same as the rest of us.” It is an accessible, though incomplete, definition of what public choice is about. You could read James Buchanan, who in 1986 won the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” (popularly known as the Nobel Prize in Economics) “for his development of the contractual and constitutional bases for the theory of economic and political decision-making.”

{I am quoting myself from a post from May 2007.}