We argue that in order to answer the challenges that James Buchanan put to contemporary political economists, a reconstruction of public choice theory building on the work of Buchanan, F.A. Hayek and Vincent Ostrom must take place. Absent such a reconstruction, and the significant challenges that Buchanan raised will continue to go unmet.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
Also see Boettke, “Fearing Freedom” (2013b) for a discussion of Buchanan’s challenge to contemporary classical liberals.
See Buchanan and Tullock, The Calculus of Consent (1999, 203).
The concept of equilibrium, while essential in our analytical reasoning, often can become an intellectual straightjacket when utilized as it often is in modern neoclassical economics. The classical economists and early neoclassical economists of the Austrian tradition relied on a notion of equilibrium that was more akin to that used in evolutionary biology—a use that is consistent with novelty, change and adjustment. See David Simpson, The Rediscovery of Classical Economics (2013). See Richard Wagner, Mind, Society and Human Action (2010), and Boettke, Living Economics (2012a). The distinction between “mainline” and “mainstream” economics and political economy can also be usefully referenced here to distinguish between long standing ideas about the “invisible hand” in classical and early neoclassical thinkers, and more modern technical presentations of the “invisible hand” in the Arrow, Hahn, Debreu system of competitive general equilibrium.
Among the Austrian economists, only Murray Rothbard adopted that perspective and he explicitly rejected public choice analysis as ill-founded in Power and Market (1970) on the grounds that given the coercive nature of politics one cannot analyze politics as exchange.
In the most recent NBER Reporter 2 (2013) for the political economy group, Alberto Alisina makes a similar point when he states that “in order to understand the world around us, we need to go beyond the assumption of “homo economicus” maximizing his welfare in isolation in an institution-free world. See http://www.nber.org/reporter/2013number2/2013no2.pdf.
One of the intellectual difficulties here is that rather than a rejection of the analytical importance of the equilibrium construct to economic and political economy theorizing, the argument here is one of relative emphasis. We find particularly useful Richard Wagner’s (2010) discussion about foreground and background. His argument is that in standard neoclassical economics, the equilibrium conditions are in the foreground of the analysis, while the processes that give rise to that equilibrium state of affairs are in the background. In the reconstructed political economy we are discussing, the analytical focus is reversed with the process analysis taken the foreground and the equilibrium conditions as the background.
Boettke, P. J. (1987). Virginia political economy: A view from Vienna. Market Process, 5(2), 7–15.
Boettke, P. J. (2012a). Living economics: Yesterday, today and tomorrow. Oakland, CA: The Independent Institute.
Boettke, P. J. (2012b). Anarchism and Austrian economics. New Perspectives in Political Economy, 7(1), 125–140.
Boettke, P.J. (2013a). Entrepreneurship and the entrepreneurial market process: Israel Kirzner and the two-levels of spontaneous order analysis. Review of Austrian Economics, forthcoming.
Boettke, P.J. (2013b). Fearing freedom: The intellectual and spiritual challenge to classical liberalism. The Independent Review, forthcoming.
Boettke, P. J., & Leeson, P. T. (2003). An ‘Austrian’ perspective on public choice. In C. Rowley (Ed.), Encyclopedia of public choice. Boston: Kluwer Academic Publishing.
Boettke, P. J., & Lopez, E. J. (2002). Austrian economics and public choice. Review of Austrian Economics, 15(2/3), 111–119.
Boettke, P. J., Coyne, C. J., & Leeson, P. T. (2007). Saving government failure theory from itself: Recasting political economy from an Austrian perspective. Constitutional Political Economy, 18, 127–143.
Buchanan, J. M. (1954). Individual choice in voting and the market. The Journal of Political Economy, 62(4), 334–343.
Buchanan, J. M. (1964). What should economists do? The Southern Economic Journal, 30(3), 213–222.
Buchanan, J. M. (1969). Cost and choice. Chicago: The University of Chicago Press.
Buchanan, J. M. (1979). What should economists do? Indianapolis: Liberty Fund Inc.
Buchanan, J. M. (1991). The economics and the ethics of constitutional order. Michigan: The University of Michigan Press.
Buchanan, J. M. (2005). Afraid to be free: Dependency as desideratum. Public Choice, 124, 19–31.
Buchanan, J.M., & Thirlby, G.F. (eds.) (1981). L.S.E. Essays on cost. New York University Press.
Buchanan, J. M., & Tullock, G. (1999). The calculus of consent. Indianapolis, IN: Liberty Fund.
Coyne, C. J. (2007). After war: The political economy of exporting democracy. Stanford: Stanford University Press.
Hayek, F. A. (1945). The road to serfdom. Chicago: The University of Chicago Press.
Hayek, F. A. (1948). Individualism and economic order. Chicago: University of Chicago Press.
Hayek, F. A. (1960). The constitution of liberty. Chicago: The University of Chicago Press.
Kirzner, I. M. (1985). Capitlism and the discovery process. Chicago: University of Chicago Press.
Kohn, M. (2004). Value and exchange. CATO Journal, 24(3), 303–339.
Leeson, P. T. (2007). Trading with bandits. Journal of Law and Economics, 50(2), 303–321.
Mises, L. (1949). Human action: A treatise on economics. Yale: Yale University Press.
Nozick, R. (1974). Anarchy, state, and utopia. Basic Books.
Ostrom, V. (1997). The meaning of democracy and the vulnerabilities of democracies: A response to Tocqueville’s challenge. Michigan: The University of Michigan Press.
Rothbard, M.N. (1970). Power and market: Government and the economy. The Institute for Humane Studies.
Simpson, D. (2013). The rediscovery of classical economics. Cheltenham, UK: Edward Elgar Publishing.
Stigler, G. (1992). Law or economics? Journal of Law & Economics, 35(2), 455–468.
Stringham, E. (2003). The extralegal development of securities trading in seventeenth century Amsterdam. Quarterly Review of Economics and Finance, 43(2), 321–344.
Tocqueville, A. (1966). Democracy in America?
Wagner, R. (2010). Mind, society and human action. New York, NY: Routledge.
We would like to acknowledge the insightful criticisms we received from Chris Coyne and Adam Martin and the research assistance of Liya Palagashvili. We also acknowledge the financial support of the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center. The usual caveat applies.
About this article
Cite this article
Boettke, P.J., Snow, N.A. Political economy and the science of association: A suggested reconstruction of public choice through the alliance of the Vienna, Virginia, and Bloomington schools of political economy. Rev Austrian Econ 27, 97–110 (2014). https://doi.org/10.1007/s11138-013-0239-3