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You Just Lack Training …

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As a graduate student I took 2 PhD seminars with James Buchanan -- Philosophy and Economics, and Constitutional Economics.  In the Philosophy and Economics class he periodically would ask us very basic but technical questions about economic theory -- opportunity cost being a favorite, but sometimes he asked more specific questions about the models -- inframarginal, or increasing returns were particular topics of interest.  As I have said on several occasions, Buchanan was the opposite of Tullock in the classroom in my experience.  Tullock was intellectual jiu jitsu, where you are always on guard and he was always trying to knock you off balance.  Buchanan was a guiding hand that was trying to get you to think seriously about economics and the ethical/moral dimensions of political

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As a graduate student I took 2 PhD seminars with James Buchanan -- Philosophy and Economics, and Constitutional Economics.  In the Philosophy and Economics class he periodically would ask us very basic but technical questions about economic theory -- opportunity cost being a favorite, but sometimes he asked more specific questions about the models -- inframarginal, or increasing returns were particular topics of interest.  As I have said on several occasions, Buchanan was the opposite of Tullock in the classroom in my experience.  Tullock was intellectual jiu jitsu, where you are always on guard and he was always trying to knock you off balance.  Buchanan was a guiding hand that was trying to get you to think seriously about economics and the ethical/moral dimensions of political economy.  He would make even the most lost student seem to be a vital contributor to the ongoing conversation.  But, on these issues of the technical principles of economics if you goofed up, he didn't cut you to the ground like Tullock, though he would just utter something along the lines "It's not your fault, you just lack training."  Which I guess for a grad student is pretty damning, so you would run home or to the library and try to correct your misunderstanding.  Since he emphasized very subtle points in economic reasoning -- see for example Cost and Choice -- this was not an easy intellectual exercise, but one that took serious effort and contemplation.  I am still learning 30 years later when I think about the questions he asked us to think about in class and in our short essays.

I just returned from the Association of Private Enterprise Educators annual conference, I was part of a panel that discussed "Enduring Contributions of James M. Buchanan", and I presented a paper "James Buchanan and the Properly Trained Economist."  You can find the draft of this short essay below.

James Buchanan and the Properly Trained Economist

Peter J Boettke*

In his essay on “Economics and its Scientific Neighbors,” Buchanan argues that the properly trained economist must have the principles of the discipline always by their side. The task of the political economist is to use the technical principles to assess how alternative institutional arrangements encourage or hinder the ability of individuals to realize the gains from production specialization and peaceful social cooperation. "As a 'social' scientist,” Buchanan argued, “the primary function of the economist is to explain the workings of these institutions and to predict the effects of changes in their structures. As the interaction process that he examines becomes more complex, it is but natural that the task of the economic scientists becomes more intricate. But his central principle remains the same, and he can, through its use, unravel the most tangled sets of structural relationships among human beings” (1966 [2001]: 7).

Economics properly understood makes sense out the complex web of human relations that constitute reality. “The economist,” Buchanan continues, “is able to do this because he possesses this central principle – an underlying theory of human behavior. And because he does so, he qualifies as a scientist and his discipline as a science. What a science does, or should do, is simply to allow the average man, through professional specialization, to command the heights of genius. The basic tools are the simple principles, and these are chained forever to the properly disciplined professional. Without them, he is as a jibbering idiot, who makes only noise under an illusion of speech” (1966 [2001]: 7).

So, the first task of the properly trained economist is to avoid becoming a jibbering idiot. What might lead someone astray in the discipline of economics and lead us not to enlightenment, but to mistaking noise for sense? Buchanan’s consistent answer from the beginning of his career was a methodological one, and is best exemplified in “What Should Economists Do?” when he worries about the practice of nonsensical social science when the pure logic of choice and the allocation of resources is given the primary place in economics as opposed to exchange and the institutions within which exchange takes place.

As we have been processing the Buchanan archives at GMU, it has been fascinating to get a window into Buchanan’s world. This collection -- which now runs 192 linear feet -- reveals a surprising consistency in Buchanan’s writings and his academic entrepreneurship and his private correspondence.[1]. Critical to understanding Buchanan’s system is that he is a liberal political economist in the tradition of Hume-Smith and Knight-Mises-Hayek, he is a methodological individualist in the tradition of Knight-Mises, he is price theorist in the tradition of Marshall-Knight, and he is public finance theorist in the tradition of Wicksell. All these elements are wrapped up in his economics. Furthermore, he has a deep commitment to government through discourse, and perhaps an even deeper commitment to the relatively absolute absolute. No one individual or group of individual is privileged either by nature or in deliberation over others. No one, and no group, have unique access to TRUTH. In fact, any claim in politics to TRUTH leads to tyranny plain and simple. All we can have in politics is consensus, and since there is no unified scale of values for society as a whole, all we can ever reasonably expect to get a consensus over is not ends, but the acceptable range of means by which we each pursue our separate and often desperate ends and how we relate to one another in our efforts to pursue those ends.

In the late 1970s, all these issues are brought out I would argue in a exchange of letters with one of his former students -- Richard McKenzie. McKenzie had just recently published with Tullock, The New World of Economics, which is a relentless application of the economic way of thinking to all walks of life. He is also working on a paper dealing with the constitutional moment in the US, which challenges the public spirited interpretation and pursues instead a pure private interest explanation. This particular exchange of letters runs from May 29, 1979 to June 25, 1979 and consists of 2 letters from each party. McKenzie begins the conversation by asking for Buchanan’s reaction on his work on constitutions. He references Charles Beard’s economic interpretation of the constitution, and asks Buchanan the following: “I recognize that Beard may not be right in his analysis; but if he is, does my analysis follow?”

Buchanan’s response is harsh, but also framed with a self-effacing “quasi-serious” quip and informing McKenzie that he probably needs to be constrained as a scholar to keep his very good talents “from running to excess.” He informs McKenzie that he does not like his paper, and in fact considers his paper to be profoundly immoral as it violates the norms of the civic religion with the over-extension of the logic of economics. He then says that he “felt a bit the same way about some of your applications in “New World”.” There are limits to economics analysis, Buchanan insists, “beyond which it is inappropriate to do go, for to do so will undermine myths, sacrosanct objects, concepts, ideas, that have intrinsic value in their own rights.” Buchanan ends that paragraph by informing McKenzie that the mythology that the founders were disinterested public servants “has served us very well for two centuries, and, quite literally, I think it is a sin to destroy this mythology.”

The reason, the social order of the liberal society, its stability and its viability, is intimately connected to the maintenance of this civic religion. Destroy the civic religion, you destroy the social order. He ends his letter chiding McKenzie to be more reflective of his position, one that steers a path away from a strict interpretation of “New World” and more toward one that recognizes the ethical-moral cement of the social order.

McKenzie responds immediately, and says that while the comments from Buchanan were not totally unexpected, he pushes back or seeks to clarify his position, especially as it relates to The New World. He “defends” the extreme examples as a method to capture the imagination of the students, to shock them out of their complacency so they may see the power of the principle being illustrated. He ensures Buchanan that he is not completely serious in the choice of examples. And then he adds that he believes that students get this, but that perhaps some instructors don’t.

Buchanan’s response brings us back to our theme here. As he says to McKenzie in a letter of 25 June 1979, “I think that you can appreciate my own position, which places very heavy weight on ethical-moral constraints, and on noneconomic explanations generally. But yet you can also see the power of the simplistic economic explanation, and you, like me, recognize that these explanations are, after all, our own stock in trade.” But our discipline must resist the scientistic urge, “Our raison d’etre is not to act like, or to ape the scientists at all. And we would not like the world of the economic scientists at all.” Here Buchanan lays out his position, which has been developed throughout his writings, that our role as economists is “basically didactic”, this is not a preacher, but the teacher that cultivates in their students an appreciation and understanding of the spontaneous ordering of the market economy.

But once he makes this standard claim of his, Buchanan stresses that there are multiple windows into the world through which one can look, and that “we should all come to accept the fact that politics involves talking pure and simple”. Buchanan had with his own public choice analysis attempted to pierce the romantic veneer of modern democratic politics, but once the romance is no more, Buchanan fears that if we “become generally convinced that politics is pure transfer” then all that is left is fighting over each others’ shares.

            When Buchanan took up the task to describe what he and his colleagues were hoping to accomplish with the establishment of the Thomas Jefferson Center for Studies in Political Economy, he argued that the idea was to continue in the grand and honorable tradition of political economy, and that the task of the political economist was first and foremost to utilize the technical principles of economics that are necessary to access how alternative institutional arrangements enable or hinder the pursuit of individuals to pursue productive specialization and peaceful social cooperation. However, the second aspect of the task of political economy is to bring into the open the moral and philosophical investigations of the questions dealing with the scale and scope government in all deliberations concerning public policy.

            This remains the task of the properly trained economist. Others that fall short in this question, are not evil or dim, but they perhaps just “lack training.”

* University Professor of Economics & Philosophy, George Mason University, MSN 1A1, Fairfax, VA 22030 [email protected]

[1] See http://scrc.gmu.edu/finding_aids/buchanan.html

Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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