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Memories of Professor James Buchanan

Farewell to an heroic intellect

I first came across James Buchanan through his long-term collaborator and colleague, Professor Gordon Tullock. It must have been in 1972 or 1973. Gordon and I met by accident in Frankfurt, where I was interviewing the then president of the Bundesbank for The Banker, of which I was then editor. We had one of those conversations that never ends, and in the course of it he invited me to Blacksburg to meet the great man. It was clear that Gordon venerated Buchanan.


But before I could take him up on the offer I met Buchanan through another route – the Interlaken seminars on analysis and ideology held by Karl Brunner and Allan Meltzer ever year from 1974. These were fascinating events lasting several days with (in those early years) only about 30 participants at which papers were given exploring the application of free market economic principles to a wide variety of social and ethical topics. These were generally held the week before the better-known monetary conferences also held by Karl and Allan at Konstanz. I was lucky enough to be invited for several years running and always enjoyed long conversations with James. A wonderful, old-world, courtly, upright man.

I recall one incident where after giving a talk to the group, Buchanan was viciously attacked by Michael Jensen, who was a young professor at Rochester and was already working on his path-breaking paper with Bill Meckling, “Theory of the firm: Managerial behaviour, agency costs and ownership structure” . So far as I could understand Jensen’s emotional outburst, he was accusing Buchanan of betraying individualistic principles – anyway, his entire theory was nonsense. James was quite unperturbed. When Jensen triumphantly scribbled a formula on the board as proof, Buchanan pointed out its flaw without even looking at it. Oil and water. It was only later I found out that such apparently bitter personal exchanges are a usual part of the cut-and-thrust of US academic debate.


Another economist who found Buchanan’s approach alien was the late Andrew Crockett. When Andrew, who was at the IMF at the time, mentioned to me that Buchanan had been in to give a talk, I said I would like to have been present. But Andrew made clear that in his view Buchanan had been a major disappointment. When I expressed surprise, he insisted he had been “bad, really terrible”. Of course an international bureaucracy like the IMF would have been grist to his mill! But in my view it was Crockett who revealed his own intellectual limitations by his comments. An excellent economist (his papers on international monetary reform are still worth reading) quite uninterested in stepping outside his patch – or unable to widen his horizons.


I also bumped into Jim at the conferences of the European Economic Form held every year at Alpbach, Austria, where he would hold seminars. The one I recall most vividly was where he explained the derivation of the minimal state. His starting point was, of course, the Hobbesian “war of all against all”. Assume there are no “natural” rights in the state of nature and there are no bounds to behaviour. Individuals engage in “production” and “predation”. Conflict between them leads to a distribution reflecting their abilities to produce and to steal. The recognition by them that a natural equilibrium distribution exists opens the possibility of leaping out of the Hobbesian jungle. They may agree on a “disarmament” and make mutual gains by converting resources from predation and defence to productive activities. Defining spheres of individual rights becomes a basis for continuous disarmament and trade. Everybody is better off. It’s a miracle.


That works in a state with a few people. In a larger state, however, you need an enforcer to guarantee observance of property rights. Thus the protective state emerges – but its only function is to guarantee the rights of the individuals agreed on in the constitutional contract. This was when I felt the power of his mind. It was a physical force. It created a field round it.


To me, at the time, Buchanan’s approach presented an exhilarating, toxic mix of utopian anarchism and methodological individualism. Buchanan would speak movingly of his debt to John Rawls – whose “Theory of Justice” had been published only a few years before – and Robert Nozick’s “Anarchy. State and Utopia” published in 1974. I have two autographed books – ‘The Limits of Liberty’ – dated “Alpbach, 1978” and “Essays on the Political Economy” signed Fairfax, 8 June 1981. That was when I eventually got to Virginia to see the centre and had the privilege of even giving a short talk to the folks there about international money and what was known as the LDC debt crisis. Prof Buchanan was smiling at the back of the room.


I try to apply Buchanan’s insights in some small way in my book where I conjecture a leap from Hobbesian anarchy to constitutional order in international money. His portrait features among my intellectual heroes, along with Keynes (on international money), Hayek and Mundell.

The last momento I possess arrived only a few weeks ago, a note in shaky handwriting courteously thanking me for sending him my book and expressing the hope that it would reach a wide audience. A gentleman from start to finish.


Thanks to Tyler Cowen, Jo An Burgess and Lisa Hill-Corley for helping me to re-establish contact with Professor Buchanan.


Lars Christensen has useful links on Buchanan here with a link also to Pete Boettke and Daniel Smith on Buchanan and the brick standard.


For an amusing aside on Gordon Tullock see Tyler Cowen



Neither Bill Shughart, editor of Public Choice, nor Tyler Cowen will thank me for raising this question but, am I right in thinking that the public choice school has to some extent been sidelined? Or perhaps its insights have been incorporated by the mainstream. Whatever, where is the intellectual ferment that we need today? The public choice movement was a key support for the monetarist/libertarian counter-revolution of the 1970s, indispensable groundwork for restraining and eventually reversing the inroads of collectivism. We need another such counter-revolution. 

But the most interesting things I have come across recently on money have been 1. The Skidelsky’s – Père et Fils – on “How Much is Enough?” and 2. David Graeber’s book on debt, which amounts to a sociological history and theory of money, and builds on work by scholars such as Professors Keith Hart and Michael Hudson, among others. One comes out of the progressive left, the other out of the anarchist left field rather than the utopian anarchist right of Buchanan.