Influential Thinker James Buchanan Dies
The American economist James M. Buchanan passed away on January 9, 2013. He is most famous for developing public choice theory (PCT), which earned him a Nobel Prize in Economics in 1986. PCT views many of the recurring problems in democratic political systems as results of politicians and bureaucracies following established economic principles. While many earlier thinkers viewed government as a force that could correct market failures, Buchanan believed that actors within government could exacerbate such failures. For example, a politician could pass legislation to provide a subsidy to a donor, even if the legislation was unpopular with his constituents. In such a situation, the benefits are concentrated; the politician secures future donations and perhaps a chance at a lobbying career after he leaves office, and the donor receives a subsidy from taxpayers. In contract to the benefits, the costs of the subsidiary are diffuse; each taxpayer might be a few cents worse off.
Another illustration of PCT is the well-documented tendency of a bureaucracy to grow irrespective of the work required of it. Bureaucrats, like all humans, respond to incentives, and growing a bureaucracy can enhance its members’ job security, salary, and prestige.
Buchanan’s work has been criticized for lending itself to an anti-government stance, but Buchanan viewed his work as simply viewing politics the same as the rest of the world. By exploring the idea that politicians and bureaucracies respond to economic incentives, Buchanan thought of himself as depicting “politics without romance.”