Perhaps the most important element of James Buchanan’s contribution to constitutional economics is his differentiation between pre- and post-constitutional levels of decision-making. At first glance, a tension may appear between those two levels of analysis. In one, the rules by which we live are up for debate, allowing us to exercise our creative and imaginative capabilities in constitutional construction. In the other, the rules are viewed as fixed, and we are left simply to treat them as constraints. This paper explores three key elements of Buchanan’s thought that allow him to navigate successfully between the two levels. The first is the importance of “the relatively absolute absolute”, a concept learned from his mentor, Frank Knight. The second is Buchanan’s approach to “truth judgments” in politics, and their status in our political discussions. Third, we draw on Buchanan’s insights in his 1959 paper “Positive Economics, Welfare Economics, and Political Economy” to show how political economists should participate in this decision-making process—not as expert philosopher-kings, but as co-equals with their fellow citizens. Finally, we illustrate Buchanan’s system of thought in action by presenting two case studies: Virginia education policy in the wake of Brown v. Board of Education, and the 1928 Supreme Court ruling in Miller v. Schoene.
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That a theory of the state is necessary for doing public finance has parallels in other scholarly traditions. Most notably, Joseph Schumpeter (1928/1929) advanced a similar idea in his Bonn lectures. Such thinking was an important principle in German public finance thinking and can be summed up as “you can only really save by reducing the state’s tasks”. We thank an anonymous reviewer for bringing that literature to our attention.
See Kolev (2017) and the references therein for a survey of ordoliberal thought.
Vincent Ostrom, more than almost any American scholar, was deeply interested in ordoliberalism and the unique style of European political economy. The connections between the Ostroms (Elinor and Vincent) and the ordoliberals are quite strong ones, and it must be noted that Vincent’s connection to the ordoliberals pre-dates any of Buchanan’s.
Buchanan’s discussions of normativity are very similar to those of Max Weber’s. If Buchanan based his thoughts on those of his mentor Frank Knight, it may not be surprising because Knight was the first American scholar to translate Weber. Thus, the connection between Weber and Buchanan on normativity may be mediated by Knight. We thank an anonymous referee for this observation.
For greater elaboration of that point and the importance of freedom of inquiry in democracies, see Boettke and King (2019).
The title of Knight’s book is based on the series of lectures he gave at Buchanan’s Thomas Jefferson Center for Studies in Political Economy and Social Philosophy in the late 1950s and published in 1960.
Buchanan is not the only scholar to raise concerns about the that role experts play in democratic societies. Koppl (2018) provides a comprehensive modern treatment of the potential danger that can arise when experts are not subjected to the rigors of rivalry and competition.
A similar point can be seen in the work of Max Weber, who argues that the political economist can and must help citizens realize the conflicts and contradictions between competing values that exist among citizens themselves. For Weber, political economists also must play a role in helping citizens resolve these contradictions themselves. We thank an anonymous reviewer for drawing our attention to this aspect of Weber’s thought.
The Virginia plan in particular has been the center of many of the charges leveled against Buchanan by his critics. Substantial responses to those criticisms have been made by David Levy, as well as by Jean-Baptiste Fleury and Alain Marciano (2018). Much of our analysis herein has been inspired by and builds on their works.
It also is important to recognize how that viewpoint was reflected in Buchanan’s opinions regarding segregation. Nutter and Buchanan argue that they oppose both forced integration and forced segregation, as they oppose coercive arrangements unless absolutely necessary. They do, however, emphasize that their ethical views have nothing to do with their economic analysis. David Levy likewise has provided arguments regarding Buchanan’s disapproval of the Education Plan being used for pro-segregation purposes (Levy and Peart, the Virginia plan for universal education, working maunscript.) Later in his life, Buchanan expressed support for hiring quotas based on race to ensure that equality of opportunity was not denied to any citizen based on personal characteristics beyond their control. Those opinions place Buchanan at odds with some of his libertarian and conservative colleagues but were necessary consequences of his deep commitment to the fundamental democratic principle of equality under the law. Other policies supported by Buchanan—such as massive subsidization of higher education and a 100% inheritance tax—shows that Buchanan was concerned with institutional calcification that unfairly could privilege some individuals over others and grant them unjustified advantages or power.
At the end of the day, the social scientist still cannot substitute his or her judgment for that of their fellow citizens. They cannot override them, even when they have the best of intentions. In Buchanan’s framework, each individual wields an effective veto with which to prevent the imposition of states of affairs in place of the status quo.
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The authors would like to thank Rosolino Candela, Stefan Kolev, and Alain Marciano for helpful comments on earlier drafts. Comments from the editor and an anonymous referee were also much appreciated. The support of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University is gratefully acknowledged. The usual caveat applies.
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Boettke, P.J., King, M.S. James M. Buchanan on “the relatively absolute absolutes” and “truth judgments” in politics. Public Choice (2021). https://doi.org/10.1007/s11127-021-00883-0
- Constitutional economics
- Political economy
- Relatively absolute absolutes