Exchanges with and without the sword: slavery, politics-as-exchange and freedom in James M. Buchanan's institutional economics (original) (raw)
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2009
James Buchanan won the Nobel Prize for economic sciences in 1986. This paper sketches the foundations of his work and how it developed over time. By the 1960s he saw exchange as the key to the whole discipline of economics. Gradually he shifted the focus from ‘gains from trade’ in regular markets to politics. Contracts regarding goods and services were broadened to constitutional contracts. Always the approach was to start from the status quo and look for Pareto gains. Especially in his early work, Buchanan was a strong advocate of positivism. Over time this softened. The paper starts by listing his foundational assumptions. It then discusses Buchanan’s early methodological views on how economics should be understood. Next, it shows his understanding of the ethics of markets, exchange, private property and the minimal state. Finally, it shows how this approach logically leads to constitutional political economy. Even though the focus was on formal rules, over the years Buchanan beca...
Public Choice, 2020
James M. Buchanan cited the American Founding as an important inspiration for his constitutional vision. Buchanan and the Founders shared a belief in the moral equality of persons and a conviction that social order could be built upon a nexus of contract and exchange. The early revolutionaries were inspired by the classical republican ideal of impartial government serving the public interest, but Buchanan and the later Founders did not believe that relying on political actors to pursue the common good would avert tyranny. Buchanan’s insistence on unanimous constitutional agreement highlights the fact that the Constitutional Convention did not obtain the consent of the black Americans who constituted close to one-fifth of the population, but to whom the Founders did not extend the principle of moral equality. Accordingly, Buchanan’s work leads to an appreciation of the Founders as an archetype of the constitutional mentality that he advocated throughout his work, but also to an under...
James M. Buchanan and the Soul of Classical Political Economy
Journal of Public Finance and Public Choice
Boettke and Marciano’s (2020) The Soul of Classical Political Economy curates ten previously unpublished works by James M. Buchanan. The editorial introductions to these are independently valuable as scholarly works; they shed light on the context in which the papers, essays and letters were written, and draw important connections across Buchanan’s different writings. In this review essay, I consider Buchanan on classical liberalism, Knut Wicksell and the role of the economist in light of these newly available writings. The book and review essay should prove of interest not only to historians of economics, but also to scholars and economists generally, as Buchanan’s views on the classical tradition provide important philosophical support for the entire neoliberal enterprise, particularly as it relates to public policy, public economics and public choice.
Constitutional political economy has an explanatory and a justificatory strand. The former explains how alternative sets of rules and institutions give rise to different forms of social interaction; the latter tries to justify and give normative foundation to rules and institutions within a liberal contractarian tradition. Here, the central question is: What types of rules and institutions can we imagine emerging from a consensual constitutional contract of individuals? It is the justificatory-normative strand of constitutional political economy that we focus on in this paper by entering into a dialogue between two of the most prominent proponents of this approach, James Buchanan and John Rawls. In spite of their different political leanings, their respective approaches share a surprising amount of commonalities. However, we think it is the tensions between their approaches-in particular in the context of (psychological) realism and (public) deliberation-which provide us with an enlightening take on the question of how to conduct normative constitutional political economy in contemporary times. We start this article with Buchanan's critique of Rawls's theory, in particular his accusation that Rawls's account would be unrealistic assuming people's reasonableness and too normative in predefining the outcome of constitutional choice. In spite of this valid critique, Buchanan's own theory does not provide a satisfying answer to the challenges he identifies in Rawls, partially due to the methodological constraints he imposes on his own reasoning. We argue in this paper that the solution to Buchanan's critique is actually an updated and expanded reading of Rawls's later work on democratic deliberation and public reasoning.