Nobel economist examined politics
Pioneer in field of public-choice theory
WASHINGTON — James M. Buchanan, the U.S. economist who won the 1986 Nobel Prize for applying the principles of economic self-interest to understand why politicians do what they do, has died. He was 93.
He died Wednesday, said Alex Tabarrok, director of the Center for Study of Public Choice at George Mason University in Fairfax, Va., where Buchanan was a distinguished professor emeritus of economics. The cause wasn’t immediately available.
The Royal Swedish Academy of Sciences awarded Buchanan the Nobel in economics “for his development of the contractual and constitutional bases for the theory of economic and political decisionmaking.”
Buchanan was a pioneer i n the field known as public-choice theory, which views government decisions through the personal interests of the bureaucrats and elected leaders who want to advance in their careers and win campaigns.
He summarized public choice as “politics without romance” and said it helps explain why established bureaucracies “tend to grow apparently without limit,” why pork-barrel politics endure and why the tax system is defined by “the increasing number of special credits, exemptions and loopholes.” At the time he received the award, his ideas were finding a receptive audience within the administration of then-U.S. president Ronald Reagan.
“Buchanan’s contribution is that he has transferred the concept of gain derived from mutual exchange between individuals to the realm of political decision-mak- ing,” the Nobel committee wrote. “According to Buchanan, it is often futile to advise politicians or influence the outcome of specific issues. In a given system of rules, the outcome is to a large extent determined by established political constellations.”
As Buchanan put it in Liberty, Market and the State — published in 1986 — politics is “a process within which individuals, with separate and potentially differing interests and values, interact for the purpose of securing individually valued benefits of cooperative effort.” He drew on the work of Knut Wicksell, the Swedish economist who studied to what degree different forms of parliamentary government spend money in line with the wishes of taxpayers.
The choice of Buchanan for the Nobel drew some criticism, in part because his area of study was a step away from traditional economics in the direction of political science.
Buchanan himself, writing in 1989, said he was surprised to be honoured, “because I held myself, my work, and my affiliation, to be too far outside the mainstream both of my own discipline and the American academia.”
James McGill Buchanan was born on Oct. 3, 1919, in Murfreesboro, Tenn.
He earned his undergraduate degree from Middle Tennessee State University in 1940 and his master’s from the University of Tennessee in 1941. He earned his PhD from the University of Chicago in 1948.
At the University of Virginia, where he taught from 1956 to 1968, he led the economics department and helped found the Thomas Jefferson Center for Studies in Political Economy, the research institute through which he continued his work on public-choice theory. Buchanan moved to Virginia Polytechnic Institute in 1969 and became director of a new Center for Study of Public Choice. He moved with the research centre to George Mason University in 1983.