James Buchanan, 1986 winner of the Nobel Prize for economics, died yesterday at the age of 93.
Among his conclusions was that public officials often act in their own self-interest instead of the public's interest. Thus, he argued, bureaucracies tend to grow and politicians tend to favor new spending and tax cuts, leaving the bills for the future.
To prevent such choices, Mr. Buchanan advocated a constitutional amendment requiring a balanced federal budget, to force politicians to curtail spending.
Within the field of economics, Mr. Buchanan's ideas were seen as a challenge to John Maynard Keynes, who called for government intervention in the economy, including running up budget deficits, to provide stimulus in lean times.
Judging by today's standards of government intervention Keynes has certainly withstood Buchanan's challenge. We are watching Buchanan's theories played out right before our eyes.
So, for example, he could explain why bureaucracies had an incentive to expand their turf in order to increase their financial resources and power. Or why politicians keep tax rates high so they can dole out special credits and exemptions for those who would reward those same politicians. Or why pork-barrel politics is the abiding concern of legislators.Buchanan acknowledged that public-choice analysis had not "dislodged the prevailing socialist mindset in the academies." But he could rightfully claim to be a major influence in helping the public understand why the modern state produces such poor outcomes. His work should be required reading for everyone in a government job.
I'm not sure how helpful that reading assignment would be for the rest of us. Let me re-word that. I'm not sure how helpful it would be for the rest of us for everyone in government to complete the reading assignment. Buchanan's work would most likely become a "How to..." manual for aspiring potentates.
The theme of his life's work is best summarized in the title of his 1997 article "Politics Without Romance." With longtime colleague Gordon Tullock, Jim launched a research program—public-choice economics—that challenged the widespread notion that politicians in democratic societies are more nobly motivated and trustworthy than are business people and other private-sector actors. In a wide river of books and papers, Jim warned against the foolishness of romanticizing government.
It's surprising and more than a little disheartening how many people subscribe to the notion that government actors are so much more nobly motivated than the rest of us.