American economist (1919–2013)
James McGill Buchanan Jr. ( ; October 3, 1919 – January 9, 2013) was an American economist known for his work on public choice theory originally outlined in his most famous work, "The Calculus of Consent", co-authored with Gordon Tullock in 1962. He continued to develop the theory, eventually receiving the Nobel Memorial Prize in Economic Sciences in 1986. Buchanan's work initiated research on how politicians' and bureaucrats' self-interest, utility maximization, and other non-wealth-maximizing considerations affect their decision-making. He was a member of the Board of Advisors of The Independent Institute as well as of the Institute of Economic Affairs, a member of the Mont Pelerin Society (MPS) and MPS president from 1984 to 1986, a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University.
Early life and education.
Buchanan was born in Murfreesboro, Tennessee, the eldest of the three children of James and Lila (Scott) Buchanan. His paternal grandfather, John P. Buchanan, was governor of Tennessee from 1891 to 1893. According to Buchanan's 1992 memoir, when his father, James Buchanan, Sr., married in 1918 and began his family he borrowed heavily to mechanize and improve the farm, including the acquisition of a herd of Jersey cattle. The Buchanan farm suffered during the 1920s—by the time James Buchanan, Jr. was old enough to work on the farm, all the work was done either manually or with mules and horses. Buchanan described his life on the farm as "genteel poverty" with neither indoor plumbing nor electricity. The house did contain his grandfather's library of books on politics. Unlike in other farm families where children regularly stayed home to help as farm labor, his mother insisted he never miss a day of school. While completing his first university degree in 1940 at Middle Tennessee State Teachers College he continued to live at home and work on the farm. In 1941 he completed his M.S. at the University of Tennessee.
World War II.
Buchanan attended the United States Naval Reserve Midshipmen's School in New York starting in September 1941. He was assigned to Honolulu, Hawaii in March 1942, where he served as an officer on Admiral Chester W. Nimitz's operations planning staff in the United States Navy.
Buchanan attributed his dislike of what he considered "Eastern elites" to his six months of Navy officer training in New York in 1941. He believed that there was overt discrimination against young men from the South or West in favor of those who had attended what he called establishment universities in the Northeast. In a 2011 interview, Buchanan said that out of twenty "boys from the establishment universities, 12 or 13 were picked against a background of a total of 600 [men]." He was completing his last month of training in New York during the December 7, 1941 attack on Pearl Harbor. Buchanan said that "in balance" his work in operations planning during the war was "easy." He was discharged in November 1945.
Education.
With the support of his wife, Ann Bakke, and the generous G.I. Bill education subsidy available to war veterans, Buchanan applied to graduate school. In his 1992 autobiography, Buchanan said that when he began his graduate studies in 1945 at the University of Chicago, he was unaware of how market-oriented the Chicago school of economics was. He stated that he was essentially socialist until he enrolled in a course taught by Frank Knight. Knight, who also taught leading economic thinkers such as Milton Friedman and George Stigler at the University of Chicago, was a founding member of the Mont Pelerin Society. Within six weeks of starting his studies, Buchanan said he was "converted into a zealous advocate of the market order". Knight became Buchanan's "de facto" PhD supervisor, and his 1948 dissertation, "Fiscal Equity in a Federal State", was heavily influenced by Knight. Buchanan did not consider himself as belonging to the Austrian or the Chicago schools of economics. But he was a member of the Mont Pelerin Society, and served as its president from 1984 to 1986 just before he received the Nobel Memorial Prize in Economic Sciences. He did share many of their common beliefs. As Buchanan puts it: "I certainly have a great deal of affinity with Austrian economics and I have no objections to being called an Austrian. Friedrich Hayek and Ludwig von Mises might consider me an Austrian but, surely some of the others would not." Buchanan went on to say that: "I didn't become acquainted with Mises until I wrote an article on individual choice and voting in the market in 1954. After I had finished the first draft I went back to see what Mises had said in "Human Action". I found out, amazingly, that he had come closer to saying what I was trying to say than anybody else."
It was also at Chicago that he first read and found enlightening the work of Swedish economist Knut Wicksell. Photographs of Knight and Wicksell hung on his office walls ever after.
Academic career.
After completing his PhD in 1948, Buchanan taught at the University of Tennessee as associate professor and later full professor from 1948 until 1951. He was a professor of economics at Florida State University from 1951 until 1956 and served for two years as the department chair. From 1955 to 1956 he was a Fulbright Scholar in Italy.
He taught at the University of Virginia from 1956 to 1968, UCLA from 1968 to 1969, and Virginia Tech from 1969 to 1983, where he held the title Distinguished Professor of Economics. In 1998, Buchanan returned to Virginia Tech as a Distinguished Emeritus Professor of Economics and Philosophy where he contributed in organizing and providing funds for workshops, symposium, and lectures, including the annual James M. Buchanan lectures.
In 1983 he became a professor at George Mason University where he remained until his retirement, after which he continued with emeritus status.
Professional organizations.
Thomas Jefferson Center for Studies in Political Economy.
In 1956 Buchanan and G. Warren Nutter approached the president of the University of Virginia to discuss the creation of a new school within the university, "The Jefferson Center for Studies in Political Economy and Social Philosophy". Nutter, who studied under Friedman and Knight at the University of Chicago in the late 1940s, was working at that time under the sponsorship of the Brookings Institution's National Bureau of Economic Research (INBR) on his 1962 book "The Growth of Industrial Production in the Soviet Union". It was Thomas Jefferson who founded the University of Virginia in 1819 in Charlottesville, Virginia as a public research university. The next year the school was founded with the intention of preserving a "social order built on individual liberty, and . . . as an educational undertaking in which students will be encouraged to view the organizational problems of society as a fusion of technical and philosophical issues."
One of the Center's early publications that reached a wider audience was a 1959 report Buchanan co-authored with Nutter, "The Economics of Universal Education". In it they wrote that the, "case for universal education is self-evident: a democracy cannot function without an informed and educated citizenry. . . . If education is to be universal, compulsion must be exercised by government—that is, by the collective organ of society—since some parents might choose to keep their children out of school. For similar reasons, minimum standards of education must be determined by government. Otherwise, the requirement of education is empty and meaningless." Buchanan was not against "state participation in education" although he strongly opposed " state monopoly of education".
Its publication provided the Center and its authors, their first opportunity to be involved in a major public policy issue related to constitutional reform. A March 12, 1959 "Charlottesville Daily Progress" editorial called for reform of Virginia's constitution that would recognize "both the need for universal education and the right of the individual to freedom of choice in the education of his children." Georgetown University historian, James H. Hershman, said the wording seems to be from "The Economics of Universal Education". In a 2017 CATO Institute's Libertarianism.org podcast, Richard E. Wagner, who studied under Buchanan in the 1960s and maintained a 50-year friendship with him, said that Buchanan was an "egalitarian" and had no objection to the 1954 Brown v. Board of Education U.S. Supreme Court decision that introduced desegregation in public schools. Wagner said that while Buchanan opposed segregated schools at the time, he also believed in decentralization and parental and student choice within a liberal orientation of people being able to develop their talents and abilities. Hershman wrote the "Encyclopedia Virginia"'s "Massive Resistance" article,' and his 1978 PhD dissertation was on the massive resistance strategy—a Virginia state government strategy adopted in 1956 to block the desegregation of public schools led by Harry F. Byrd Sr., who coined the term. In a 2020 article, Hershman examined Buchanan's actions in the spring of 1959 within the context of the massive resistance policy. By the time Buchanan became involved, there was already a groundswell of protests against desegregation based on constitutional arguments, states' rights, and even some arguments from the Chicago school of economics. The Virginia school crisis offered Buchanan a "major opportunity" of promoting "libertarian economic and social ideas." The Buchanan and Nutter report proved most useful just before an April 16, 1959, public hearing on a proposed constitutional change. In order to counter the argument that a "private system was unfeasible and that any weakening of public education would damage the state's economy overall and discourage new industries from coming to Virginia", supporters asked Buchanan and Nutter to write a shorter summary of their February report. They published two articles on the report in the Richmond "Times-Dispatch" on April 12 and 13. While Buchanan's personal views on race were beside the point, according to Hershman, the "massive resistance private school initiative" had provided an "opportunity to "create a functioning alternative to the existing public system", to "promote his libertarian education doctrines, as an example to showcase those ideas". Hershman wrote that it did not seem to concern Buchanan that the libertarian doctrines would perpetuate segregation. Buchanan was on the wrong side of history. The school crisis brought in a power shift in the state of Virginia from a "rural, courthouse elite to that of an urban, business elite".
In later years, Buchanan no longer held the same ideas on school vouchers as those expressed in the 1959 report. He cautioned in a 1984 letter to the Institute for Economic Affairs' Arthur Seldon that a state-sponsored unregulated voucher system from tax revenues to avoid the "evils of state monopoly" of the education system, could have the unintended consequence of the "evils of race-class-cultural segregation." The voucher system could result in recreating the exclusive membership-only system for elites. While vouchers would ideally promote market competition while also providing benefits of "exposure to other races, classes and cultures", Buchanan warned that this may not happen in practice.
Public Choice Society and "Public Choice" journal.
With the publication of "The Calculus of Consent" in 1962 and Mancur Olson's "Logic of Collective Action" in 1965, there was growing interest in public choice theory. Tullock and Buchanan applied for and received a National Science Foundation grant to organize a preliminary research meeting in Charlottesville in 1963 with about twenty people from economics, philosophy, and political science including Olson, William H. Riker, Vincent Ostrom, Anthony Downs, Duncan Black, Roland McKean, Jerome Rothenberg, and John Rawls (author of the influential 1971 "A Theory of Justice"). They created a Committee for the Study of Non-Market Decision Making, which later became the Public Choice Society. They wanted to focus on how choices and "decisions were made outside of a private market context". As a follow-up, they launched a journal with Tullock as editor called "Papers on Non-market Decision Making". Tullock remained as editor until 1990. They had several follow-up meetings, including one in Chicago in 1967. Members were dissatisfied with the title and it was changed to "Public Choice".
Virginia school of political economy.
Buchanan remained at the University of Virginia until 1968. The work of Buchanan, Nutter, and other colleagues including Tullock, Stigler, Ronald Coase, Alexandre Kafka, and Leland B. Yeager later came to be seen as the start of the Virginia school of political economy as separate from the Chicago school of economics. Buchanan stated that Mancur Olson came up with the term some time after the