PROFESSOR JAMES M. BUCHANAN
Alberto Benegas Lynch, Jr.
The first time I invited Jim Buchanan, thirteen years ago, to visit our Graduate School in Buenos Aires (ESEADE), I included in his program a lecture at the National Academy of Economic Science. Practically in the first sentence he said Argentina should repudiate its public debt. Most of the audience was shocked. There were bankers that stared at me. In their eyes I saw two clear messages: first "don't you dare ask for more scholarships for your institution and second "who is this crazy man you invited?. I am used to live through this kind of situations. Paradoxically, to explain the advantages of the free market and an open society one must swim against the current of the market in ideas. With that kind of opening statement Jim encouraged some people to think and even read some of his essays on the subject. Government should stick to present incomes through taxation and not get hold of assets from future generations who will not even participate in the process that elected the government that assumed the debt.
Today, rivers of ink are wasted in condemning capitalism and free markets because of the negative consequences they are supposed to have produced. Nevertheless, it is interesting to note that the relation of public expenditure to GNP has increased dramatically during the last fifty years, which means that people must work more and more for the government. Needless to say, this trend runs in the opposite direction of capitalism. In spite of the Berlin Wall this policies advocate interventionism which are strengthened through "market socialism" and environmental regulations. I was always impressed of Jim's perseverance and patience to refute those who suggest policies they consider will allow more freedom in a certain area but at the expenses of reducing freedom in another field. Thomas Sowell has summarized this problem very elegantly: "The opposite of power is not power for opposite purposes, it is freedom". In Latin America it is often said that governments will be always in the correct direction provided they are elected in a democratic process. We must take notice of what authors such as Constant and Tocqueville had to say about unlimited democracy. Buchanan wrote in a paper presented by Hoover Institution Press about the 1990s that we should leave aside "once and for all the romantically idiotic notion that as long as processes are democratic all is fair game".
Up to this moment, Jim's book that I enjoyed the most is Freedom in Constitutional Contract. As a student I went through some of Frank Knight's works, but Jim made me see other sides of Knight's contributions. It was specially illuminating for me to learn about his epistemological approach in "Fact and Value in Social Science". Through Jim I discovered Warren Nutter (we published some of his essays in our journal, Libertas). But probably the most valuable advise I had from Jim regarding other authors was to meet Anthony de Jasay whose last collection of essays I find specially creative and stimulating (Against Politics). Buchanan's definition of efficiency has been very helpful for me and my colleagues in Argentina. A doctoral dissertation of one of my students is on productivity and efficiency in the history of economic thought in the light of this definition. Once we had a seminar to discuss this definition, which Jim, of course, relates to rules or institutions:
If there is no objective criterion for resource use than can be applied to outcomes, as a means of indirectly testing the efficacy of the exchange process, then so long as exchange remains open and so long as force and fraud are not observed, that upon which agreement is reached is, by definition, that which can be classified to be efficient.
Jim helped us all to understand more accurately the relations between market process and the institutional framework. At our Graduate School he succeeded Hayek as President of the Advisory Council. As Hayek, he was so kind as to write a Foreword to one of my books. Due to his advise one of our Master Programs - a sui generis one- is in Economics and Political Science, precisely to connect two traditions that in most texts are presented separately.
I also learnt very much from Jim when I served as a member of the Board of Directors of the Mont Pelerin Society in the period that he was President. Jim's autobiographical Better than Plowing confirms he is a very nice man and a fine gentleman. During his first 80 years, he has been a source of inspiration for those who share the ethos of a free society. His outstanding example of integrity and intellectual energy has set a standard of excellence and his influence is very far reaching in all countries of the world.
Of course, I do not always agree with Jim. For example, I remember correspondence we maintained in relation with his presentation at a Special Mont Pelerin Society Meeting held in Taiwan on work ethics and externalities. If I had to criticize Jim in a more general basis, I would say that, maybe, he is too strongly influenced by what we might call "the Hobbes' syndrome" which is the premise and the starting point of most of his work, that is: "during the time men live without a common power [...] they are in the condition which is called war".