What made Buchanan special as an economist?

by on January 13, 2013 at 7:58 am in Economics | Permalink

Matt asks this question.  I am a bit on the run, so I will do this in link-less form, but all the sources should be easily googled.  Here goes:

1. He developed the “theory of clubs,” which sets out the conditions under which private associations supply excludable public goods at optimum levels.

2. For his time he had the best and most rigorous analysis of the incidence of public debt.

3. With Gordon Tullock he pioneered the economic analysis of voting rules in terms of transactions costs and external costs imposed on others.  Any current blogosphere discussion of say the filibuster will rely on this approach, though we now take it so for granted we don’t realize how impressive it was at the time.

4. He had pioneering economic analyses of bicameralism, logrolling, and other aspects of legislatures, again with Tullock.

5. Along with Harsanyi, he formulated aspects of the “original position” before Rawls did and he was a major influence on Rawls.  By the way, I have seen Buchanan numerous times with top professional philosophers, and he has no problem holding his own or better.

6. He helped pin down, including on the technical side, the economic concept of externality.

7. He provided the most important revision to optimal tax theory since Ramsey, namely the point that supposedly efficient methods of taxation can be too easy to use.  That was in The Power to Tax, with Brennan.  His piece on static vs. dynamic versions of the Laffer curve, with Dwight Lee, is also significant.

8. He provided a public choice analysis of why Keynesian economics would not lead to the appropriate budget surpluses during good times and thus would contain dangerous ratchet effects toward excess deficits.

9. He thought through the conflict between subjective and objective notions of value in economics, and the importance of methodologically individualist postulates, more deeply than perhaps any other economist.  Most economists hate this work, or refuse to understand it, either because it lowers their status or because it is genuinely difficult to follow or because it requires philosophy.  Yet it stands among Buchanan’s greatest contributions even if a) I do not myself agree with his approach, and b) I do not think it is easily summarized or even well-explained.  Buchanan took Knight and Shackle very seriously and he understood that the typical pragmatic dismissal of their caveats was not in fact  well-founded.

10. His Hayekian work on “order defined only through the process of emergence” and “economics as a science of exchange and catallactics” is a very important take-down of the scientific pretensions of much of economics.  It doubted whether the notion of efficiency could be independently conceptualized at all.  Again, this work is disliked or ignored.  Buchanan may be going too far, but it is a very important and neglected perspective.

11. He thought more consistently in terms of “rules of the games” than perhaps any other economist.  This point remains underappreciated and underapplied.  It makes technocracy out to be a fundamentally different endeavor.

12. He did important work in the history of economic thought, reviving interest in the Italian school of public finance and public choice.

13. His late papers with Yoon on the work ethic, increasing returns, and economic growth remain underappreciated.  I also admire his work with Yoon on the anti-commons.

There is more, but that is a start.  Try his article on why pollution should be taxed for Pigouvian reasons.  I could add that Buchanan understood the importance of monetary rules, and favored a regime where the supply of money would be elastic in response to negative economic circumstances.

dearieme January 13, 2013 at 9:05 am

“I have seen Buchanan numerous times with top professional philosophers, and he has no problem holding his own or better.” Are you a top enough philosopher to make that judgement?

Ray Lopez January 13, 2013 at 10:11 am

This raises an interesting philosophical question: can anybody appreciate anything unless they are a world class expert in that field? If you enjoy a meal and praise it to others, must your taste buds be in the top 1% of the population (yes, you can measure this, it’s done with sommeliers)? If you enjoy a brilliant game of chess, must you be a master like Tyler Cowen is? If you cannot paint, can you appreciate the Dutch old masters? To paraphrase Obama, ‘yes you can’.

Andrew' January 13, 2013 at 10:57 am

If you aren’t an expert in it, then by definition it is crap.

dearieme January 13, 2013 at 11:36 am

But who wins a chess game is indisputable – you don’t need to be a good player like Tyler to tell. With food it’s easy because all that matters is whether it pleases the muncher. As for the Dutch masters, I love them but I wouldn’t dream of trying to claim that I could tell that van X is better than van der Y: I just don’t know enough about painting.

Kratoklastes January 14, 2013 at 5:34 pm

“Yes you can, boundedly.

Kratoklastes January 14, 2013 at 5:52 pm

Gah… shot the bolt too early somehow.

What I was in the process of saying is that, if you are not an ‘expert’ in a field that genuinely requires expertise, you can make ludicrous errors in argumentation if you just try to “intuit your way through” – regardless of your raw wetware (although I tend to think that being well-trained in a quantitative discipline gives one tools that can be usefully applied in disciplines other than your core – in my case, econometrics and economic modelling).

For example, the other day I got into a flame war on “LessWrong”, when some participant (a computer programmer – hence, probably IQ>’educable’) was outraged that I dared suggest that it was possible to bribe people to stop them from doing things that were a nuisance (the example was gay people kissing in public: I pointed out that a good way to check if the reduction in viewers’ utility was real, was to ask them to offer to pay the gay couple to stop).

He attributed that idea to me and declared it whackery (I’m paraphrasing).

When I mentioned that he was exposing a huge hole in his knowledge of a core principle of economcis that predates my birth (and hence could not be sensibly attributed to me)… and further that he would fail second year Micro if he was unaware of Coase, he bridled further. I may have inflamed matters by pointing out that his starting an argument about nuisance-amelioration without knowing about Coase was like starting an argument about optimal control and then bridling when your interlocutor expects you to know calculus.

So anyhow: folks who argue outside of their discipline need to be aware that there’s a decent likelihood that anything they think they thought up, has probably already been thought up.

I would think that would be obvious to most folks here, given the tendency of economists to have to constantly deal with autodidacts – of varying levels of actual intelligence – who think they’ve figured out the glaring flaw in ‘economics’ (by which they mean a single-agent static-optimisation model – thinking that economists only think in terms of first-year pedagogic tools).

Disclosure: my mentor (who tried to shepherd me to a PhD but failed) was a student of Leontief (the last of Leontief’s if memory serves – and the one who did the most to advance the Applied GE modelling paradigm), so I tend to favour the modelling paradigm and quantitative approaches to economics generally… so I’m predisposed to accept that agents at least try to optimise.

John January 13, 2013 at 11:09 am

Tyler has co-authored papers with Derek Parfit, one of the most important philosophers of his generation so yes Tyler is in a position to know.

dearieme January 13, 2013 at 11:37 am

Oh come. I’ve co-authored a paper with a good biochemist – it doesn’t mean that I’m in a position to judge a debate between good biochemists.

Paul January 13, 2013 at 11:46 am

“I’ve co-authored a paper with a good biochemist – it doesn’t mean that I’m in a position to judge a debate between good biochemists.”
And you authored a comment on a blog. That doesn’t mean that you are in any position to understand what you wrote. But hey, you’ve been in a position to author a comment on a blog. That’s what really matters.

prior_approval January 13, 2013 at 12:07 pm

And hey, you’ve been in a position to author a comment on a blog which doesn’t even understand the point of the comment about judging those with expertise in a field by someone whose doesn’t have the same expertise. Even when they have co-author credit on work done in that field.

Apparently meaning that you are in not in a position to understand what was written.

But in this case, that lack of understanding of what was written isn’t what really matters.

After all, you’ve been in a position to author a comment on a blog.

Paul January 13, 2013 at 12:49 pm

prior_approval: Man, you’ve got me! Logic aside, you are definitely the master of enthymeme. Now, you may not realize that, as we live in an age of specialization that makes difficult “judging those with expertise in a field by someone whose doesn’t have the same expertise”. But take my word for it: you are good, you should write a book or something.

Dan JJ January 13, 2013 at 6:01 pm

How does a person even get to be labeled as ‘expert’ or top in their field? Who does so? By consensus? Of Whom? Third parties who concede superiority? By that, the one eyed-man is king in land of blind. But, how do they even know he can see? Yet, in the land of men with 20/20 vision, the one-eyed man is handicapped. Well learned men in philosophy did not overshadow Buchanan. They were not able to talk past him in discussions. He held his own.
But, please continue to be ridiculous in attempting to denigrate or diminish. Empirical evidence has and will always (due to human nature) show that large govts will always hinder economic viability and prosperity, and seek to continue GOVT growth over individual liberties and individual financial growth.

Andrew' January 13, 2013 at 5:45 pm

“Tyler has co-authored papers with Derek Parfit”

Maybe Parfit was just status climbing…

Pete January 13, 2013 at 9:15 am

A point of genuine clarification (no flame): What does Tyler mean by ” It makes technocracy out to be a fundamentally different endeavor.” in point 11? I cannot much pinpoint what 11 is about. Thanks very much.

Zachary January 13, 2013 at 10:29 am

There is a difference between active management, to promote outcomes, and rules, which promote a process (that require less intervention). Rules can be self reinforcing. Outcomes require constant tinkering. It’s like the Rawls Vs Nozick stances as outcome Vs. process. Technocracy is not rule based nor does it reinforce patterns of behavior which tend toward “desirable” outcomes.

Bill January 13, 2013 at 10:23 am

What you missed is Buchanan’s greatest legacy:

Creating Massive federal deficits based on a policy of tax cuts sufficient to create massive deficits, in order to “starve the beast”.

Here is Bruce Bartlett’s description of Buchanan’s philosophy and the origin of starve the beast:
\
“In 1977, Buchanan and Richard Wagner published the influential book Democracy
in Deficit, blaming economist John Maynard Keynes for destruction of an implicit
balanced-budget requirement imposed by the Founding Fathers. Until the
1930s, they argued, deficits were universally viewed as evil—sometimes necessary, but
nevertheless evil.7 Keynes’s great error was to view them as sometimes good. This
view destroyed the stigma long attached to deficits and opened the floodgates to ever
higher spending.
Passage of California’s Proposition 13 seems to have influenced Buchanan’s
thinking about other ways of constraining the growth of government besides a balanced-
budget requirement. In a series of papers culminating in his 1980 book with
Jeffrey Brennan, The Power to Tax, Buchanan endorsed Proposition 13–style tax cuts
unaccompanied by spending cuts as an appropriate way to restrain the growth of
government (Buchanan 1976; Brennan and Buchanan 1977, 1979).8 Subsequent
research is mixed on whether tax-limitation initiatives such as Proposition 13 succeeded
in the long run in holding down government spending (Abrams and Dougan
1986; Sherwood-Call 1987; Matsusaka 1995). However, it is important that at a
critical time in the late 1970s, an economist well known for his commitment to a
balanced-budget rule also endorsed Proposition 13–style tax cuts as a way of forcing
action to restrain the growth of government. Buchanan’s endorsement was an important
step in making the starve-the-beast theory an idea to be taken seriously, not
simply a populist slogan.
In the 1980s, public-choice theory developed the idea that a conservative gov-ernment might intentionally increase the national debt through tax cuts in order to bind the hands of a subsequent liberal government (Persson and Svensson 1989;
Alesina and Tabellini 1990; Pettersson-Lidbom 2001). More of the budget would
have to be used for interest payments, thereby precluding a liberal government from
spending as much as it would like on consumption. It has also been argued that a
conservative government prefers inefficient tax systems in order to restrain a future
liberal government’s ability to raise revenue to finance new spending (Becker and
Mulligan 2003).” Full text here: http://www.independent.org/pdf/tir/tir_12_01_01_bartlett.pdf

Maybe we should name a deficit after him? Or name a tax increase on the wealthy in his honor?

Andrew' January 13, 2013 at 10:42 am

Because if there was the money, we’d pursue shovel-ready projects instead of new medical transfer programs.

Bill January 13, 2013 at 2:54 pm

No, when it is a deficit, it is the kids money, not yours.

Andrew' January 13, 2013 at 5:24 pm

Huh?

Bill January 13, 2013 at 5:50 pm

Uh, huh.

Dan JJ January 13, 2013 at 6:04 pm

That’s easy. . . Drastically reduce expenditures instead of continually increasing expenditures. GOVT needs to spend far less . . . Far, far less.

Don Boudreaux January 13, 2013 at 3:47 pm

Bill,

I suggest that, rather than rely upon Bruce Bartlett’s interpretation of Jim Buchanan, you read Buchanan for yourself. I do not at the moment recall any specifics from Buchanan-Wagner (1977) or Brennan-Buchanan (1980) that speaks to the Proposition 13 question (or to starve-the-beast) – although I will point out that analysis of state-governemt spending and borrowing must take account of the fact that, unlike Uncle Sam spending and borrowing, U.S. states have no power to monetize their debts.

But Buchanan was from early on, as I read him, suspicious of “starve-the-beast” arguments. See, for example, his 1976 JPE article “Barro on the Ricardian Equivalence Theorem.” Jim concludes that article by saying that “With public as with private finance, the very creation of debt suggests that borrowers desire to accelerate spending.”

More generally, if Buchanan were a champion of starve-the-beast, then he would not have spent so much time and effort in pursuit of a balanced-budget amendment; he would have instead pursued, at the national as well as a the state level, restraints on government spending.

Don Boudreaux January 13, 2013 at 3:56 pm

One more point in response to Bill who accuses – I believe on weak evidence – Jim Buchanan of having been a proponent of the starve-the-beast hypothesis. Despite Bruce Bartlett’s claim (if I read Bruce correctly), the Buchanan-Wagner thesis as expressed in their 1977 book, Democracy in Deficit, suggests that Buchanan REJECTED the starve-the-beast hypothesis. That hypothesis says that forced reductions in tax receipts will oblige government to reduce spending. Buchanan and Wagner, in contrast, argue that the ability of government to borrow without any real constraints causes spending to be higher than is appropriate (or higher than it would be if government were required to balance its annual budget).

Buchanan and Wagner understood well that, in the absence of any real pressure on government to balance its budget, voters and politicians today will keep tax receipts consistently BELOW spending (or, if you prefer, spending consistently above tax receipts). There’s nothing in this hypothesis – and certainly nothing that I recall from Democracy in Deficit (or any other of Jim’s voluminous works [not all of which I've read]) – that suggests that tax-receipt reductions are a means of keeping spending lower than otherwise. Quite the contrary, I believe.

choncan January 13, 2013 at 4:17 pm

For what it’s worth, just from watching those Buchanan/Musgrave CESifo debates about the role of the state, Buchanan came across as highly thoughtful and reiterated time and again the importance of what I’ll (awkwardly) paraphrase as the importance of the moral-societal backdrop of assumptions undergirding any economic system, and stressed repeatedly that if people lose that sense of moral coherence and implicit sense of community trust that enables the low overhead transacting (and so on) that we like about markets (along with the sense of duty that would impel one not to freeload on the state), then the game is lost.

I haven’t read the collected works so I don’t know if there’s some incriminating quote somewhere that Bartlett and the original commenter nail him on, but at least to this viewer/reader he didn’t come across at all as a guy who’d encourage planting what would in effect be a time bomb.

Greg G January 13, 2013 at 6:01 pm

Regardless of how Buchanan felt about starve-the-beast thinking, events subsequent to the writing of Democracy in Deficit showed that starve-the-beast and supply side economics were a greater threat to balanced budgets than Keynesian economics.

Bill January 13, 2013 at 10:10 pm

Don,

You should directly address the quotations and citations in Bartlett’s article about Buchanan’s position on Prop 13 and Bartlett’s other points:

“Passage of California’s Proposition 13 seems to have influenced Buchanan’s
thinking about other ways of constraining the growth of government besides a balanced-
budget requirement. In a series of papers culminating in his 1980 book with
Jeffrey Brennan, The Power to Tax, Buchanan endorsed Proposition 13–style tax cuts
unaccompanied by spending cuts as an appropriate way to restrain the growth of
government (Buchanan 1976; Brennan and Buchanan 1977, 1979).8 Subsequent
research is mixed on whether tax-limitation initiatives such as Proposition 13 succeeded
in the long run in holding down government spending (Abrams and Dougan
1986; Sherwood-Call 1987; Matsusaka 1995). However, it is important that at a
critical time in the late 1970s, an economist well known for his commitment to a
balanced-budget rule also endorsed Proposition 13–style tax cuts as a way of forcing
action to restrain the growth of government. Buchanan’s endorsement was an important
step in making the starve-the-beast theory an idea to be taken seriously, not
simply a populist slogan.
In the 1980s, public-choice theory developed the idea that a conservative gov-ernment might intentionally increase the national debt through tax cuts in order to bind the hands of a subsequent liberal government (Persson and Svensson 1989;
Alesina and Tabellini 1990; Pettersson-Lidbom 2001).” See above.

Bill January 13, 2013 at 6:11 pm

Don and choncan,

Let me quote from Wiki on Starve the Beast, and then quote a Cato Paper on Starve the Beast where Buchanan’s agreement with Friedman is laid out:

First, Wiki on Starve the Beast:

“James M. Buchanan, a Nobel Prize-winning economist, helped develop the Fiscal Illusion hypothesis: “It’s obvious, borrowing allows spending to be made that will yield immediate political payoffs without the incurring of any immediate political cost.”[10] In their book Democracy in Deficit (1977), Buchanan and Richard E. Wagner suggest that the complicated nature of the U.S. tax system causes fiscal illusion and results in greater public expenditure than would be the case in an idealized system in which everyone is aware in detail of what their share of the costs of government is.[11]

Empirical evidence shows that Starve the Beast may be counterproductive, with lower taxes actually corresponding to higher spending. An October 2007 study by Christina D. Romer and David H. Romer of the National Bureau of Economic Research found: “[...] no support for the hypothesis that tax cuts restrain government spending; indeed, [the findings] suggest that tax cuts may actually increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases.”[12]

William Niskanen, chairman emeritus of the libertarian Cato Institute, criticized “starve the beast.” If deficits finance 20% of government spending, then citizens perceive government services as discounted. Services that are popular at 20% off the listed price would be less popular at full price. He hypothesized that higher revenues could constrain spending, and found strong statistical support for that conjecture based on data from 1981 to 2005.[13][14] Another Cato researcher, Michael New, tested Niskanen’s model in different time periods and using a more restrictive definition of spending (non-defense discretionary spending) and arrived at a similar conclusion.[15]

Professor Leonard E. Berman of Syracuse University testified to a U.S. Senate committee in July 2010 that: “My guess is that if President Bush had announced a new war surtax to pay for Iraq or an increase in the Medicare payroll tax rate to pay for the prescription drug benefit, both initiatives would have been less popular. Given that the prescription drug benefit only passed Congress by one vote after an extraordinary amount of arm-twisting, it seems unlikely that it would have passed at all if accompanied by a tax increase. Starve the beast doesn’t work.”[16]

Economist Paul Krugman summarized as: “Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit.” He wrote that the “…beast is starving, as planned…” and that “Republicans insist that the deficit must be eliminated, but they’re not willing either to raise taxes or to support cuts in any major government programs. And they’re not willing to participate in serious bipartisan discussions, either, because that might force them to explain their plan—and there isn’t any plan, except to regain power.”[17]

Historian Bruce Bartlett, former domestic policy adviser to President Ronald Reagan, has called Starve the Beast “the most pernicious fiscal doctrine in history”, and blames it for the increase in US government debt since the 1980s.[18]”

Second, from a Cato paper on Starve the Beast:

“The main difference between Friedman and Buchanan is not of
substance or philosophy, but of tactics, or emphasis. Buchanan argues
that assuming a given amount of taxation, the way to constrain spending
is to limit borrowing. Friedman argues that assuming a given
amount of borrowing, the way to constrain spending is to limit taxation.
The main shortcoming in Buchanan’s analysis is that it ignores the
way in which the tax burden is distributed over present-day taxpayers.
Buchanan is quite right in observing that the tendency in elective
democracy is for government to borrow and spend rather than tax and
spend, and to spend much rather than little, and that it is immoral
when future generations end up facing a financial burden that is the
result of spending and borrowing decisions in which they had no
participation. But it does not follow that a constitutional balanced
budget requirement will therefore rein in public spending.
To hold down government spending, starve-the-beast proponents
count on public outrage over federal budget deficits. Public choice
theorists count on outrage over the burden of taxation. But public
outrage over the burden of taxation does not occur to the extent that
is politically necessary to prevent the enactment of tax increases, due
to the steep degree of progression built into the present income tax
structure.”

http://www.jerrytempelman.com/Jerry's%20website/Publications/02.%20Taxation/01.%20Starve-the-Beast%20Paper.pdf

Rich Berger January 13, 2013 at 7:32 pm

Bill

You’re floundering. It’s painful to watch. But also amusing.

Bill January 13, 2013 at 8:08 pm

What–you don’t like Cato?

Bill January 13, 2013 at 9:20 pm

Oh, by the way Rich, I didn’t quote this other point from the Cato paper on Starve the Beast:

“Starve-the-beast proponents counter that in the absence of a constitutional
balanced budget amendment, political realities are such
that the idea of a balanced federal budget is a fallacy. Barring surprises,
there will be a federal budget deficit regardless of how much
is taxed. The reason for the permanence of government debt is that
the tendency in elective democracy is for politicians to finance government
expenditures with borrowing rather than taxation. Indeed,
public choice theorists such as Buchanan (2000: 471) agree with
starve-the-beast proponents on this preference for debt finance: “The most elementary prediction from public choice theory is that in the
absence of moral or constitutional constraints democracies will finance
some share of current public…..
Starve-the-beast proponents do not advocate budget deficits as an
end but, rather, as a means or negotiating device. They would concur
with Buchanan’s emphasis that “the issue here is one of tactics” (personal
correspondence, 12 May 2005). The starve-the-beast approach
is a political strategy aimed at counteracting the natural tendencies
for government spending and taxation to continually increase. The
starve-the-beast approach is by no means perfect, but in an imperfect
world the choice is often between less than perfect alternatives. In the
words of Friedman (1975: 91): “Those of us who believe that government
has reached a size at which it threatens to become our master
rather than our servant should therefore (1) oppose any tax increase;
(2) press for expenditure cuts; (3) accept large deficits as the lesser of
evils.”

Rich, looks like, in your words, like you are the one who is floundering as you have not provided any evidence to deny the Cato paper or Wiki on Buchanan’s views.

TGGP January 14, 2013 at 12:38 am

Bill, that last bit you quoted makes it sound like Cato is CONTRASTING Buchanan with the starve-the-beast proponents, while also pointing out which areas they agreed on.

If you want to know where I disagree with Cato (though I fully agree with the late Niskanen that not paying immediately for spending increased the demand for spending), it’s that while public opposition to tax increases may not suffice for libertarian demands, I think it is MUCH more potent than public opposition to deficits. Basically, nobody really cares about deficits. It’s a political stick which is generally ignored once “our side” attains power. Borrowing has increased more than taxes have, so I say Buchanan’s reputation as a public choice scholar should be increased by the failure of starve-the-beast while Milton Friedman’s should be reduced.

Rich Berger January 14, 2013 at 7:15 am

Essentially, you have tried to make an argument from authority. First, you pushed the idea that Bruce Bartlett should be the authority for judging Buchanan’s role in the starve the beast strategy (he was associated with a republican admin, so he should be better than an unbiased source). You tried that several times in various posts and were generally ignored. Don Boudreaux responded directly to your claims. Then you turned to using Cato as a new authority, as if it were impermissible for a “right thinking” person to disagree with them. This is an old lefty strategy; I am not buying it.

Andrew' January 14, 2013 at 11:35 am

The discussion is particularly bizarre considering we are watching it “work.”

Steko January 14, 2013 at 8:47 pm

It seems like people are just talking past each other. Don wants to argue “James Buchanan directly advocated ‘starve the beast’” while Bill’s contention is the somewhat weaker “‘Starve the beast’ policies are the direct result of James Buchanan’s research and thus his biggest legacy”.

Bill January 14, 2013 at 10:47 pm

Well, Stekko, that’s not quite right. I view him as being more hypocritical when necessary to achieve a goal of lower government spending. And, that’s the way Bartlett, it seems to me, views it as well when he compares Friedman and Buchanan and Buchanan’s later statements. (By the way, Bartlett was involved in all of this, working for Kemp on Kemp-Roth and working for the Joint Committee and for the Reagan Treasury Dept.). But, I would be a bit more critical of Buchanan, just as I was of the Reverend Dimsdale in the Scarlet Letter: Buchanan argued that spending would increase because debt was a fiscal illusion–it was distant; or, if you want to think of it in behavioural economic terms, it is easier to sell a product (government services) if you also offer a credit card. Yet, for this wise, behavioural observation, he supported the Bush tax cuts, a true “put it on the credit card” program. It’s effect would be to “starve the beast” ultimately, or make the debt so large that you would look at it. Bartlett’s piece is very instructive.

Becky Hargrove January 13, 2013 at 10:37 am

Nine and ten are the areas I would like to better understand his thought processes, especially as they could relate to services (where no true free market yet exists), and little work/life balance exists at the individual level.

Dave January 13, 2013 at 11:06 am

Matt doesn’t appreciate it because he’s “baffled” by politicians’ immorality:

“I’ve come to be increasingly baffled by the high degree cynicism and immorality displayed in big-time politics…”

John V January 13, 2013 at 11:16 am

In my experience, Matthew Y often comes to edge of true understanding but backs away and closes his eyes to protect his biases and politics.

Yancey Ward January 14, 2013 at 11:05 am

In defense of Yglesias, he actually does make the transition occasionally. This is what sets him apart from a complete lightweight like Ezra Klein.

jizay January 13, 2013 at 11:26 am

Yglesias’ lack of understanding didn’t stop him from tweeting “James Buchanan no longer the most overrated living economist” right after his death. I don’t think he deserves to be linked.

Rahul January 13, 2013 at 1:37 pm

I’ll confess though that like Yglesias I’ve tried to read up on Public Choice Theory as well as Buchanan’s shorter articles a couple of times but always came out feeling I was totally lost. I admit it’s my fault / stupidy so what’s a good source to feel and appreciate the impact of Public Choice Theory?

I don’t think its a Right-Left issue; I enjoy Friedman and his writing is captivating. Somehow Public Choice Theory seems so underwhelming.(even after reading Tyler’s 13 points.) Buchnan’s Nobel lecture did’t help much either.

liberalarts January 13, 2013 at 2:55 pm

Public choice theory opened up a wide range of interesting questions that had not been fully thought through and researched. In that sense it was novel, path breaking and useful. But, it has a certain echo chamber situation going on, and is more politically and less dispassionately driven than most fields of economics, and in that sense it has lost its way.

choncan January 13, 2013 at 3:40 pm

The insistence that in addition to trivial-sounding points there are also muddled, but very deep and profound, studies of such learning and subtlety that they are difficult to state clearly and hard even for very smart people to begin to understand makes me feel like I’m in a Derrida seminar.

My sense is that Tyler respects him for the somewhat anachronistic trait of being a moralist who is unabashed about stating his moral views aloud, without apology, in front of audiences. I also get the sense, from the recurring “even if I don’t agree”-style mild disclaiming, that Tyler himself doesn’t particularly agree with the conclusions of these various deep moral expositions, but rather respects it as in some sense legitimate as a way to conduct discussions. Maybe he wishes more economic discussions were conducted in this mode, and defends Buchanan as a type, though perhaps not his own favorite flavor.

That is, of course, speculative, but given the choice between either (a) concluding there is all this work of such depth and power that it transcends mortal understanding, including Tyler who can’t himself state it clearly, or (b) there is a tribal defense process going on and we’re seeing something of the right-libertarian tendency to defend a hero in the way many center-lefties will go to the wall for, say, Galbraith the elder, then I at least am inclined to favor (b).

I watched all of those old CESifo video debates from the late 90s (still online) a few years ago and came away thinking that both guys were thoughtful types I didn’t mind listening to but weren’t blowing my mind with either depth of insight or uniqueness of perspective in the way I at least (no doubt I’m dumber than the other commenters here, who tend to favor work more along the lines of Mussolini’s diaries) regularly felt when reading, say, Ken Arrow.

Becky Hargrove January 13, 2013 at 3:53 pm

…so you would dismiss out of hand, that the discovery of subjective value in individual aspirations might have any benefit for left leaning thought?

choncan January 13, 2013 at 4:01 pm

I would dismiss out of hand the notion that Buchanan “discovered” subjective value in individual aspirations. (Or any theory thereof.)

Derek January 13, 2013 at 4:53 pm

I’m finding these comments remarkable. A friend who taught meteorology describes the efforts to measure the basic engine of weather, the sun hitting the earth, creating air currents etc. Boring detail documenting the variations in temperature at the finest graduation possible. The basis of the science.

It seems that an economist who describes the basic engine off any economy, people making decisions, is just describing something boring and really unimportant.

Wow.

Colin January 13, 2013 at 10:52 pm

That depends. Was the meterologist saying anything that wasn’t obvious or known already?

Tyler Cowen January 13, 2013 at 9:43 pm

Buchanan was a strong believer in the pairing of expenditures and taxes. There are outright errors in some of the earlier comments in this thread.

Norman Pfyster January 13, 2013 at 9:54 pm

Surely a first around here.

Bill January 13, 2013 at 10:14 pm

Bartlett makes these points about Buchanan and Starve the Beast. Bartlett’s article is there for you to read: http://www.independent.org/pdf/tir/tir_12_01_01_bartlett.pdf

TGGP January 14, 2013 at 12:46 am

There is very little in that document about Buchanan. The ONLY thing you have to associate him with starve-the-beast (even though he’s better known as a proponent of balanced-budget amendments) is endorsement of Prop 13 or similar legislation. But as has been mentioned above, state borrowing is not quite comparable with federal borrowing. I’m open to the possibility that Prop 13 increased public spending in California (though recent reports of layoffs due to budget shortfalls make that less likely), but I haven’t seen any analysis supporting the contention as I have at the federal level.

Bill January 14, 2013 at 9:37 am

Ah, yes, state borrowing is not quite the same as federal borrowing, and I agree: actually, what’s interesting here is that Prop 13 shifted spending from local spending (real estate taxes for education, etc.) to state spending (the state began to assume local education costs as local governments became cash starved); and, states then had to rely on income taxes to cover this additional burden. So, I do agree: states are unlike the federal government: caps on local spending (like Prop 13) percolate upward to the state government, to be funded by income, rather than property, taxes.

As to the other point, you might want to look for the economist letter, signed by Nobel economists, opposing the Bush tax cuts because they would increase the long term deficit. I didn’t see Buchanan’s name, but maybe you can find it. http://en.wikipedia.org/wiki/Economists'_statement_opposing_the_Bush_tax_cuts

Bill January 14, 2013 at 1:57 pm

In my web search, I did find that Buchanan joined 103 economists on 1/18/2003 in a letter supporting the Bush tax cuts but have not been able to download it from the Washington Times where it was referenced. Perhaps you can.

Bill January 14, 2013 at 11:10 pm

Well, I found Buchanan’s support of the Bush tax cuts, even though they were not married to spending cuts, and many others believed would expand the deficit: I guess this is fiscal illusion when you do a tax cut and let it raise the deficit:

From the Congressional Record:

110 Economists Back Bush Tax Plan; 3 Nobel Laureates Join Group Urging
Congress’ Support

(By James G. Lakely)

The Washington Times–January 18, 2003.–A letter signed by
100 economists, including three Nobel Prize winners, urges
Congress to support the main elements of President Bush’s
$647 billion tax-cut plan, make his 2001 tax cut permanent
and restrain federal spending to spur the sluggish economy.
“As a rule, government cannot create wealth or expand the
economy. Only the private sector can do that,” said the
letter this week to all members of Congress.” Government
can, however, hinder economic growth through excessive taxes,
high marginal tax rates, over-regulation, or unnecessary
spending.” The economists, including Nobel laureates Milton
Friedman, James Buchanan and 2002 winner Vernon Smith, said
increased spending to combat terrorism is warranted but that
“excessive federal spending has a dampening effect on the
American economy.”
To remedy that, Congress should “end programs that outlive
their usefulness and roll back government’s share of the
Gross Domestic Product.”
According to the Congressional Budget Office, government
spending represented 19 percent of the GDP in 2002, a level
that has remained roughly stable during the past 15 years but
threatens to explode to 40 percent because of entitlement
spending by 2075.
The “wobbly” financial markets can gain solid footing
again, said the economists, if Mr. Bush’s $1.35 trillion tax
cut in 2001 is made permanent.
“Investors and individual taxpayers will be able to make
better decisions on their finances if they have greater
confidence about what tax laws they will be facing in coming
years,” the letter said. “It is imperative for Congress to
make the entire 2001 tax cut permanent.”
The economists also applauded Mr. Bush’s proposal to
eliminate the double-taxation on corporate dividends, a
policy they said is “especially harmful to economic
growth.”
Support for Mr. Bush’s tax plan largely follows party
lines. House Democratic leaders have scheduled an event
Tuesday on Capitol Hill to argue that the president’s plan is
neither fair nor fiscally responsible and would leave state
governments starving for money.
The various Democratic tax-cut proposals are dramatically
smaller, short-term, targeted more narrowly and feature
payments of at least $300 to all families, including those
who pay no federal income tax.
A spokesman for the Democrats on the House Appropriations
Committee criticized the president’s plan for being too
skewed toward “the superwealthy.”
“The White House needs to wake up and realize that giving
their rich cronies another tax break is not going to halt the
Bush recession,” the Democratic aide said.
“We need to put money in the hands of people who are
having trouble putting food on their table, not people who
want to buy a second yacht.”
But Sen. Evan Bayh, Indiana Democrat, said he is “keeping
an open mind” on supporting a pro-growth tax bill that has
many of the features of the president’s package. “I’m not
someone who has an allergic reaction to the dividend proposal
as some do,” Mr. Bayh said.
“I think you’ll see a great many elements of the
president’s proposal [in the final bill]. I think, frankly,
we’ll improve it to make it even more growth-oriented for the
economy today.”
Mr. DOMENICI. They suggest that only the private sector can do what
is required. Government cannot create wealth or expand the economy.
Friedman, Buchanan, and Vernon Smith, all Nobel laureates, said
increased spending to combat terrorism must be done, but to the extent
that it is a lot of money, it will not help the American economy. They
go on to say we need what the President is suggesting in his plan.
This summary I have before me, News World Communications, from the
Washington Times quotes this series of communications.
Available at: http://www.gpo.gov/fdsys/pkg/CREC-2003-01-28/html/CREC-2003-01-28-pt1-PgS1651.htm

infopractical January 14, 2013 at 3:19 am

It is quite simply a service to one’s field to honor the memory of a passed genius—particularly one whose contributions thrive beyond his personal fame. Tyler and several members of the Economics community have not only honored Buchanan, but have listed his accomplishments several times—in essence pointing out to themselves and others how deep Buchanan’s contributions were—so deep that none of these economists could do it in one sitting. There is sometimes excellence in admiration. I’m thankful for the history lesson and motivated to do some reading.

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