James M. Buchanan and the Public Choice Tradition

In 1986, the economist James M. Buchanan (1919-2013) was honored with the Nobel Prize for the remarkable yet straightforward application of economic theory to political decisions. His was a constrained vision of imperfection and political motivation rather than an unconstrained vision of perfectible and malleable human nature. Buchanan was motivated by his observation that economists' assumptions in public finance and welfare economics did not correspond to the real world. Buchanan’s democratic populism permeates his scholarly work. For example, he criticized Arrow’s impossibility theorem. He argued that the potential for cycling in policy selection was not a defect of democracy but a strength. “(T)he opportunity for any social decision to be altered or reversed” limited the potential for a dominant group to lock in its preferences permanently. He was notable for insisting on unanimity—an agreement by the dispossessed and privileged—as the only way to legitimize the choice of a polity’s constitutional rules. His insistence on analyzing politics in terms of self-interest, limited information, and transactions rejects socio-political elites' pretensions. His overall body of work analyses how ordinary and imperfect people act politically. It asks how they might be able to design constitutions that constrain their worst tendencies.