Posted 10:07 pm Saturday, January 12, 2013
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Economist knew game was fixed
Most Americans have probably never heard of him, but many have grumbled assent to economist James M. Buchanan’s chief finding: politicians look out for themselves, not for the rest of us.
Buchanan, winner of the 1986 Nobel Prize, died on Wednesday. Most recently, he taught at George Mason University (where columnist Walter Williams teaches).
“Buchanan’s basic contribution to economic theory (and policy) was both simple and profound: Political decision makers, just like consumers and producers, are self-interested and subject to constraints,” the Heritage Foundation noted. “This important insight appears to be almost entirely ignored, even by many conservatives, in the current policy debates.”
Buchanan grew up in Tennessee, the son of farmers, and had strong populist leanings. But he quickly learned that those in power aren’t always looking out for the “little guy.”
“Buchanan was a pioneer in 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,” explains the Bloomberg news service. “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 President Ronald Reagan.”
Yet he didn’t consider himself a conservative, in the modern sense. Instead, like many in the current Libertarian movement, he considered himself a “classical liberal,” in favor of policies that expand freedoms and opportunity.
But politicians, he found, are motivated to act in ways that benefit some groups, at the expense of everyone else, in order to win elections. Their favorite way to do that is by special tax breaks or subsidies, no matter what the cost to the treasury or effect on the nation’s bottom line.
“Buchanan warned of the danger of deficit finance when it left the world of economic theory and entered the world of political gamesmanship,” Heritage explains. “History has confirmed his theory — unlike economists, politicians will continually prefer to run up the debt. Deficits allow politicians to provide special-interest backers with costly projects during the current election cycle while deferring payment until after the next election. The result has been (as he predicted) a virtually unending string of budget deficits and an ever-rising national debt.”
Buchanan grew up in Tennessee, the son of farmers, and had strong populist leanings. But he quickly learned that those in power aren’t always looking out for the “little guy.”
“Buchanan was a pioneer in 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,” explains the Bloomberg news service. “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 President Ronald Reagan.”
Yet he didn’t consider himself a conservative, in the modern sense. Instead, like many in the current Libertarian movement, he considered himself a “classical liberal,” in favor of policies that expand freedoms and opportunity.
But politicians, he found, are motivated to act in ways that benefit some groups, at the expense of everyone else, in order to win elections. Their favorite way to do that is by special tax breaks or subsidies, no matter what the cost to the treasury or effect on the nation’s bottom line.
“Buchanan warned of the danger of deficit finance when it left the world of economic theory and entered the world of political gamesmanship,” Heritage explains. “History has confirmed his theory — unlike economists, politicians will continually prefer to run up the debt. Deficits allow politicians to provide special-interest backers with costly projects during the current election cycle while deferring payment until after the next election. The result has been (as he predicted) a virtually unending string of budget deficits and an ever-rising national debt.”
As the Nobel committee wrote when it awarded him the economics prize, “Buchanan’s contribution is that he has transferred the concept of gain derived from mutual exchange between individuals to the realm of political decision-making… 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.”
In other words, the game is (largely) fixed.
What cure did he prescribe? He argued for “supermajority” checks on political power — like the Senate filibuster, now under fire from Democrats. Those checks would help keep politicians honest.
Buchanan was 93.
In other words, the game is (largely) fixed.
What cure did he prescribe? He argued for “supermajority” checks on political power — like the Senate filibuster, now under fire from Democrats. Those checks would help keep politicians honest.
Buchanan was 93.
