Buchanan why does government grow

He would later describe it as the most exciting intellectual moment of his career and the starting point of his journey to winning the prize in Wicksell offered a different way of looking at the structures in which political decisions were made and encouraged economists to see politicians as humans, not saints.

Economic sciences thought about market players as individuals caring for utility maximization, or in other words, consumers trying to get the best value while spending as little as possible.

Political behavior was not analyzed in the same way. He suggested setting up constraints on the authority or the power of politicians. Buchanan often referred to politics as a game and the constitution as the rules of the game. In his work, he examined how constitutional structures could be modified.

As a finance economist, Buchanan had been working mostly on tax policies, government spending and public debt. Part of his research dealt with the question of how much power the government should have. He felt strongly that governments were concentrating too much on power, which he saw as a threat to liberty. To Buchanan, Switzerland is a good example of a country where checks and balances work.

Buchanan believed in people taking part in the political discourse in an orderly fashion and rejected rebelling as a course of action. Beware of those who come around saying this is the way we ought to do things.

Compared to other economists at the time, Buchanan had close ties to European researchers and academic communities. Europe needs to give power to the central authority to enforce integration, free trade and some degree of monetary integration. He never advised a political party or held a government job. At his farm in Virginia, he found solitude and isolation that he enjoyed. I do embody something of the American myth of social mobility. For how many boys from middle Tennessee, educated in tiny, poor, and rural public schools, have received Nobel Prizes?

When the Berlin Wall came down in and the Western world was changing fast, his mindset started to change from pessimist to something softer. The mindset that is required is not a scientific one, it comes from dialogue. Hear Michael Spence's view on how countries can grow sustainably while having a long-lasting positive impact. This website uses cookies to make sure you get the best experience on our website.

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But it got some very good reviews by some political scientists. Some people, like William Riker, who became very important at [the University of] Rochester, established a whole school. He picked up on it immediately and worked closely with us in the whole Public Choice work; he had a huge influence in political science and trained a lot of very good people. So he and a few others were very sympathetic. But basically the political science community didn't accept it.

A lot of the economics community simply was not interested. They were interested then, and now, in much more technical stuff. I think gradually it worked its way in. The whole Public Choice framework spawned more interest than Black, Arrow or Downs had gone along with. After our book was published, Gordon Tullock and I recognized that there was a lot of work going on in several fields that were at least closely related.

We got the National Science Foundation to give us a small grant to organize a preliminary research meeting. We had a meeting in Charlottesville we were both in West Virginia at that time in to which we invited all the people that we thought were working more or less in those areas.

We had about 20 people. It was a very exciting two and one-half day conference in which people were simply exchanging research ideas. We invited Arrow; he didn't come.

Duncan Black was there, as I remember. Jack Rawls was there from philosophy. We had several sociologists, psychologists, political scientists and so forth. Roland McKean and Jerry Rothenberg from economics were there. We had quite a group. Out of that came the Public Choice Society. We didn't call it that at that time.

We were getting into how decisions were made outside of a private market context. After that we organized and started up a journal. The first was called Papers on Non-market Decision Making.

Tullock took charge of editing it. Then after meeting a couple of more years, Riker helped organize the third meeting. Tullock and I organized the first and second.

Then we had a meeting in Chicago in At that time we sat around and nobody was happy with the title. We needed a name. Somebody came up with Public Choice, which really doesn't fit very well descriptively because a lot of people think of it as a public opinion polling thing. We get questions about that. But at least it caught on. From that time on we named the journal and the society The Public Choice Society. So that was an institutional embodiment of this that started with The Calculus of Consent.

It started with that meeting. That's a little bit of background. Region: It seems that many people now see your emphasis in Public Choice as common sense, that is, applying economics to government. Please describe your journey in making Public Choice commonplace in both the practical world of politics and in the academic world.

Buchanan: It is nothing more than common sense, as opposed to romance. To some extent, people then and now think about politics romantically. Our systematic way of looking at politics is nothing more than common sense. People ask me how has Public Choice made a difference and how does it influence ideas. I don't necessarily place Public Choice as out front in changing a lot of ideas. But I do think that Public Choice has had a major influence: I think governments overreached themselves in the '60s, not only in the totalitarian, authoritarian regimes, but also in Western democratic welfare-state nations, represented in this country by the Great Society of Lyndon Johnson.

By the early '70s people began to recognize this. They looked about them, and they saw that political programs were failing. So it provided what I would call a foundation or substructure, which allowed them to interpret better what they were seeing, rather than leading the way. Can you outline the essential issues that Public Choice economists, like yourself, use to understand government policy?

Buchanan: I think it's just a way of looking at political decision structures. Take, for example, the budget policy aspects. People ask what's the best example in practice of Public Choice thinking. It's clearly the explanation of the budget deficit regime. The key to Public Choice, as you said earlier, is common sense. And common sense tells you that a politician is very much like the rest of us. A politician who's seeking office or seeking to remain in office is responsible, as he should be, to constituents.

He wants to go back to a constituency and tell them that he's either lowered their taxes, or he's brought them program benefits. You plug that into politics and you have a natural proclivity of a politician to create deficits. Then the question comes along: Why didn't we have deficits before?

You see the Keynesian economic revolution gave the politicians an excuse for deficits. You give politicians half an excuse; they play out this natural proclivity. So from the '60s on we have the regime accelerating deficits. This ties into my support of the constitutional amendment as a corrective device.

That's an easy example. Region: How do Public Choicers come at monetary policy? Is that a serious topic of study for Public Choice? Buchanan: It has been studied in Public Choice, which splits itself up in subparts and separate research programs. So we've got one strand of what you might call more positive Public Choice that has looked at monetary institutions. It looked at the behavior of Federal Reserve Boards with a very hard-nosed view.

We've been very critical of existing monetary institutions because they don't have enough predictability, and we have gone down the line of having more specific targeting or guidelines or some kind of alternative to a purely discretionary policy.

Those are more normative studies. We're doing some work in competitive federalism: how a regime of national central banks might be better than a single central bank for Europe, for example, or vice versa.

Region: Many years ago you spoke at Spring Hill Conference Center in Minneapolis about the need for a balanced budget amendment and in recent times you have focused your attention on the same topic. Balanced budget seems to be a long-standing interest of yours and one that you pursue with some passion. What is your argument for a balanced budget amendment? Buchanan: I remember very distinctly that Spring Hill meeting. That was one of the most delightful conference settings I've ever seen.

I enjoyed that conference. I've forgotten what I talked about then, but I'm not at all surprised that it was on the balanced budget. That's an interest of mine that has gone back a long way.

My first individually authored book was on public debt, which I wrote in before The Calculus of Consent , in which I attacked the Keynesian notion about public debt, going back to classical precursors of what public debt was all about. Then I saw the Keynesian logic. As you destroy the old- time fiscal religion, you're going to have this natural proclivity toward deficits, like I said. Then I wrote a book with a colleague, Richard Wagner, in called Democracy in Deficit , making the argument that the Keynesian destruction of the old mythology about balanced budgets would guarantee the regime that we've had.

Certainly the predictions in that book have held up very well. Again, we were calling for correction. If you recognize the natural proclivity of democratic politics to generate deficits, you recognize that we did have a constitutional norm against deficits. It was basically a moral norm: It was a "sin" to create deficits prior to the Keynesian period.

If you remove that moral norm you have this natural proclivity. Then if you also buy into the theory of public debt that I had developed much earlier, that is, it does involve taxing the people who are going to be around in the future by imposing costs on them to pay off whoever happens to own the government-obligated bonds, you realize that you're going to get yourself deeper and deeper in trouble unless you introduce some kind of formal constitutional substitute for that moral norm.

I came on board quite early on in favor of a balanced budget amendment, making me one of the few economists who has consistently supported a balanced budget amendment. I didn't get very far. Personally, I'm not the type of economist who does much testifying before Congress or for political parties.

I'm very, very much ivory tower. The only policy issue at all that I've been on board with is the balanced budget: the constitutional change. So I did a little bit of work during the period when they were trying to get state resolutions for a constitutional convention. Now that more of this has come up again through the Congress, I've been very supportive of it. So I would like to have seen it go through. It seemed to me that as it came nearer to reality, there was a lot of obfuscation thrown in by the opposition.

I've written some pieces recently on simply trying to clarify some of that confusion. It seemed to me that a lot of smoke was thrown in just to confuse a lot of the issues about it.

Region: It appears at first glance that many Public Choice economists are politically conservative and free-market oriented.

Would that be an accurate description of those academics in the Public Choice movement? If you take the story I've given you, if you recognize that the traditional way we looked at politics had a lot of romance in it, then Public Choice comes along and removes the romance. I think the natural outcome of that is you're going to be more skeptical about government than you would have been otherwise. Mancur Olson, a good friend of mine, has been influential in Public Choice and objects very strongly to this argument that there is this conservative bias.

There is no bias in it as such. But Mancur himself has necessarily had to look at politics differently because of that, despite the fact that his natural proclivity would be more left than mine. There's nothing inherently biased about it. It's just that the fact that if you start looking at the political sector or politics from a non-romantic view, you come to a different view on what has been traditional.

Economists traditionally have been much more pro-market and anti- politics, anti-government than the other parts of the Academy in general. But throughout the decades economists have been frustrated by the fact that they put their ideas out there and nobody pays any attention. Economists have found you can't go out there and sell the idea of a market economy very readily. You have to be sophisticated to understand it. It's difficult to sell the idea of a market economy, so economists haven't been very effective.

Potentially, Public Choice, it seems to me, has been effective in a different way altogether. Public Choice does not say that the market is perfect or the market works at all. That's not part of it. But it says that politics fails. There are a lot of people out there who will recognize that politics fails and, therefore, will be in support of a market, who would never have come around to support the market in terms of the pro side.

They'll see the anti-politics side, so that's how Public Choice comes in. Region: In the past you've called for a constitutional revolution to reassess the entire spectrum of constitutional rights of individuals. In , what would that mean? A balanced budget amendment, for sure.

But what beyond that? Buchanan: We're just at the threshold beginning to examine the whole structure of our institutions in a foundational sense. It's partly because the ideology that was behind a lot of the socialist thrust is gone. Partly we recognize a lot of failures. We recognize that the political or governmental sector is too large. The problem is more acute in some countries than it is in ours.

Sweden, for example, is in really bad trouble. They've over-extended the welfare state. They don't know what to do. They're failing. They're falling behind. But it's true in all the major countries.

There's beginning to be a fundamental evaluation of our institutions. You saw it in this country with the elections and the questions that people are raising about values. How this is going to play out is very difficult to see now. Just today I got an invitation for a lecture series organized for next year at Michigan State.

The whole question of big government is in the air. Again, the balanced budget amendment is a case in point. When you get down to the crunch and try to do something specifically, then you run into all the opposing interests. Another good example is this so-called Conference of States. The idea was to have a meeting in Philadelphia of the governors of all states plus a bipartisan group of leading legislators from each state.

They were to come to Philadelphia and meet for the first time since The states would meet quite separately from the federal government. But the plan was killed by agitation not from the left but from the right.

Ironically, the whole thrust was to try to reduce political power.