Abstract
Based primarily on personal conversations with James M. Buchanan, this paper outlines three fundamental aspects of the Italian tradition found in Buchanan’s scholarship. The first is the particular emphasis on the role of the state. The second is the analysis of subjective cost. The third is the application of subjective cost to democratic public finance. This paper will focus on the latter two aspects, concentrating on two pioneering works on which Buchanan grounded two of his most important books written during the first part of his long career. The first is Public Principles of Public Debt, which profoundly was influenced by de Viti de Marco, the second is Cost and Choice, wherein along with de Viti de Marco, we find themes echoing Francesco Ferrara.
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Notes
To Geoffrey Brennan, Buchanan’s subjectivism was “subject to mood swings”. In my opinion, Buchanan’s subjectivism needs not to have been considered “loose” because his gnoseological theory, known as methodological individualism, claims that all evaluations originate from individuals and, as such, are subjective. The same critique could be lodged against Ferrara’s “cost of reproduction” idea for not being rigorously subjectivist. Although the “cost of reproduction” can be viewed as alternatives forgone in terms of goods not produced/consumed, in reality, they are foregone utilities. In that connection, it must be emphasized that the great merit of Buchanan is that of departing from the extreme subjectivism of Wiseman (1953) and Shackle (1961), which denies the existence of an objective empirical reality outside the individual.
According to Einaudi (1950), Ferrara towered over the Italian economic academy and defined him "Prince of XIX century economists".
Ferrara's prefaces are contained in volumes II through IV of Opere Complete.
In a comment on a draft paper of mine, Buchanan wrote “As you know, Ferrara is one of my own heroes, and I had as a lifelong project when I got back from Italy to translate some of Ferrara’s stuff into English, notably his prefaces to the classics, but, as many such ambitions, this one got somehow waylaid and I never go around to doing anything with it. But he should be better known among non-Italians and perhaps even among Italians.”.
Such utility losses are the only costs in which accountants are interested.
Buchanan himself explicitly confessed that initially he was not fully aware of how deeply de Viti de Marco influenced his analysis (Mosca 2016).
In an unpublished rejoinder, Buchanan accepted the validity of our critique.
Although de Viti de Marco did not favor double taxation of savings, he justifies exception on the grounds of the benefit principle. Infrastructure spending supplies future benefits; hence, constitutional principles would be violated if present investors were taxed.
I owe this point to R. E. Wagner.
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Acknowledgements
I wish to express my deep appreciation to Professor Daniel J. Smith for giving me the opportunity to write this paper on the occasion of the Dr. James M. Buchanan Centennial Birthday Academic Conference. His painstaking reading of the paper for accuracy has offered me valuable insights that have improved the final product. I wish to thank Ennio Emanuele Piano for his valuable comments as discussant of the paper at the conference. Sincere thanks are also due to the Editor in Chief of this journal for checking out the manuscript and tracking down some infelicities and obscure bits. Finally, I owe a debt to Geoffrey Brennan and Richard E. Wagner for reading and critically commenting on a previous version of the paper.
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Eusepi, G. From subjectivism to constitutionalism: the intellectual journey of James M. Buchanan through his Italian heroes. Public Choice 183, 273–285 (2020). https://doi.org/10.1007/s11127-020-00806-5
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DOI: https://doi.org/10.1007/s11127-020-00806-5