James M. Buchanan

Were I to characterize my current thinking on the economic order in a single word, I would choose, “bewildered.” I agree with the popes (a whole series of them) that socialism stinks, even in its mildest, most “democratic” forms. I also agree with them that capitalism is a good thing “up to a point,” but that a “capitalist ideology” by which society is entirely commercialized, so that we honour only what makes a profit, & devalue work & production in & of itself, also stinks — albeit less, because the capitalists don’t usually mind if you pursue quixotic noble schemes on your own dollar. They may find these schemes distasteful, but will generally leave off after short expressions of contempt.

Let me briefly advocate bewilderment as an analytical tool, among the more useful in the idler’s repertoire. I am tempted to elevate its status by referring to it as “Socratic bewilderment,” & then allying it with “Socratic irony.” That is, I think a good place to start, when you don’t have the answer, is to say (to yourself, principally), “I don’t know.” It’s amazing what can be learnt after making that assertion.

I don’t know how to proceed on the great economic issues. My tendencies are increasingly “distributist” — i.e. the widest possible distribution of private property, & the fine Catholic principle of subsidiarity in government, within a civilizational order that formally recognizes moral & spiritual truths — but no clew how to get there beyond, “Let’s everyone become traditionalist Catholics.” Meanwhile, no clew either how to disentangle the cat’s cradle of tyranny & deceit that would be necessary to understand what we have in reality, & thus, how to take it apart without using scissors.

Let me meanwhile note the death last week of the economist, James M. Buchanan, who tried very hard to understand that cat’s cradle better. We identify him with “public choice theory,” the basic notion of which was ingenious. Why don’t we use the same methods as economists do, in analyzing behaviour in a marketplace, to analyze behaviour in politics? We all know, or rather, assume without thinking, that each economic agent serves his own self-interest in the marketplace. And we are taught to assume that politicians & bureaucrats are there to serve the public good whenever we detect “market failure.” But what if politicians & bureaucrats also have interests? And what if the selfish motives of the marketplace also applied to them? Might that cast light on their own, supposedly benevolent, behaviour?

This was by no means a new insight, but by the early 1960s it had been forgotten long enough to appear quite new. While Buchanan & his colleagues were soft-spoken gentlemen, the edginess of their proposal caught some attention. Economic thinkers in the “Austrian school” had long argued that politicians & bureaucrats have insufficient information to make decisions that will be genuinely in the public interest, & that is why they (“almost”) invariably make a hash of things. But perhaps that was too gentle a way of sizing them up.

In the earlier 20th century, Vilfredo Pareto had already been there. A pioneer of number-crunching, he is famed today chiefly for his “Pareto curve,” & allied statistical “discoveries.” But in later life, surrounded by his cats, French mistress, &c, he drifted from economics into sociology. Unlike most economists, he became curious as to why his theoretical predictions of aggregate self-interested human behaviour never worked out in practice. He began to suspect that humans behave irrationally. He became obsessed with how they manipulate power to get the strange things they want, actually in defiance of “market forces.” He thought libertarianism would mitigate the effects of the tiny elites who always seem to corner the power; & in his final act of idiocy, thought that Benito Mussolini was a libertarian.

He meant well, of course. Don’t they all.

Buchanan must have been the world’s greatest expert on that political quid pro quo called “logrolling.” This was Davy Crockett’s old (1835) term for the process by which legislators trade votes so that, at the simplest level, “I’ll vote to fund your bridge to nowhere, if you’ll vote to fund my wind farm.” One might almost call this the essence of representative democracy: the system by which two or more wrongs may be combined to create an illusory right. But the principle of mutual backscratching — most familiar to me in literature & the arts — applies at all levels of society. The funny thing: it is not irrational, & will only so appear to e.g. economists postulating a human condition into which stuff like sin has not been factored.

Buchanan was also the author of a very nice distinction between politics & policy. “Politics” is the art of logrolling to determine the rules of the game; whereas, “policy” is how you play the game to win once the rules have stabilized. With this delicious insight he went on to found the sub-discipline of “constitutional economics.”

I don’t know enough about Buchanan to keep this post going much longer; but from the little I do know, a good & interesting man, & I’m sorry he’s dead, though at the age of ninety-three you must expect things like that to happen.