Carolina R. de Bolívar

President

Instituto Cultural Ludwig von Mises

Mexico

----------------------------------------------------------------------------------

JAMES BUCHANAN: A MAN OF CHARACTER

By Carolina R. de Bolívar

 

It was a sunny summer afternoon, on a beautiful terrace in Vienna with a cup of coffee in front of us, when my tape recorder and I set out to interview James Buchanan. In spite of the fact that he had distinguished me with his friendship as he had accepted to visit Mexico on a number of occasions, I knew very little about his past and personal life.

Nevertheless, my admiration for James had to do not only with his mind but also with his heart and generosity as some years before, without even knowing it, he saved the Instituto Cultural Ludwig von Mises that I preside in Mexico, when it was on the verge of closing its doors.

At that time, many of our benefactors were having great difficulties in facing the challenges that emerged from NAFTA and the opening of our economic frontiers and this, at the same time, had serious repercussions for our institute. Our funds, that I had to cover with my personal savings, were 120 million pesos below when I decided to take a last risk before having to close the Institute and I went with Karinka Collinson, our vice president, to the Mont Pelerin Society meeting in Cannes.

We were convinced that federalism was the next important step for Mexico in order to reinforce democracy and liberty. We had prepared a proposal and approached James Buchanan at the MPS meeting to invite him to come to lecture on this subject. We did, however, tell him that we were not able to pay him any honoraria. We were delighted when he accepted our invitation although he did make it very clear that we could not pay any other speaker or else he would charge as well. We reassured him about this without giving "any further explanation..."

Buchananís participation in our first colloquium on federalism in Mexico was so relevant that it awoke the interest of governors, intellectuals and representatives of all levels of government. This project was the starting point of a bright new future for our Institute which would not have been possible without him.

As I prepared for the interview, I was quite nervous not only because Buchanan is a man of few words but also because my objective was more than just making known his academic contributions which led to his being awarded the Nobel Prize in Economics in 1986. I wanted to discover the man behind that serious expression which causes admiration and respect in others but at the same time does not reveal his inner sentiments.

Ready to find out more, I asked my first question.

 

Could you tell me something about the important theory that made you worthy of the Nobel Prize.

The first point I would make is that in economics generally, as compared with physics or chemistry, the hard sciences, youíre not likely to win a prize for one particular discovery or invention. Youíre rather likely to get a prize for a whole research program that extends over a whole career and the Nobel Committee in Economics has tended to give the prize to people who open up new fields of inquiry. It was certainly true in my case, Public Choice essentially involved an opening up of fields, subject matter of politics to analysis of economics. The theory of Public Choice was very important but there were also other interesting contributions such as the analysis of public debt, the power of governments to collect taxes, the calculus of consent, among others. Although different in character, these were to a certain extent complementary and contributed to this new investigation in the political game that today we call Public Choice.

Could you summarize the most important principles of Public Choice?

A short hand version of Public Choice is that it is an application of an economic approach or economic methodology to political decision-making in all respects, it involves public choosers, voters, politicians, parties, representatives, bureaucrats. Thatís one definition of what Public Choice is. I wrote one piece called Politics without Romance, that demonstrates that when you take off the romantic blinders, a whole new discipline opens up. So the subject matter of political science with the methodology of economics is what Public Choice is. The reason I was awarded the Prize was that I had been a representative in that field, although I was not the only one as there were some others.

When you were developing these theories, did you imagine the impact that they were going to have?

No, not at all. I had been working more or less in this area looking at the process of economics and worrying about politics during the 50ís. But really my work in this area stems from a joint program that Gordon Tullock and I started in the late 1950ís and we then published the book The Calculus of Consent in 1962. In working on that book and in the other work I did not consider it to be a new discovery, I thought that it was simply an application of the Madisonian vision of how political structure ought to be set up, using modern economic terminology and methodology. I didnít necessarily think that it would be a big break-through. I knew that it would be shocking to political science as it was contrary to the way political scientists were talking about politics, so I knew it would be a big departure but I didnít realize it would get the reception it did.

Do you think that the theory of Public Choice has contributed to the decentralization of power that we have witnessed in the last decades?

Well, I think that this is an interesting and important question that is often asked. As you know, starting with the 1970ís there began to be a great skepticism developing amongst public and media about the ability of politics to solve problems.

Governments everywhere overreached themselves in the 60ís, that is whether there were western welfare states or whether there were socialist states. They got beyond their capacities to do anything very good, they went way beyond what they should have done. People then observed this failure and began to see every program failure everywhere. The Lyndon Johnson projects for the great society failed and socialist systems were beginning to demonstrate their failings. Then Public Choice came along and provided intellectual foundations that allowed people to understand that which they were already observing. When you start to look at politics in a realistic way, with an economic methodology, you start to become more skeptical about the possible results and it seems to me that Public Choice reinforced that.

Could we say that the tendency toward self-governance and federalism is an effect of Public Choice?

Yes, I think that is certainly part of the message, that is that the larger your political unit the more difficult it is to keep control. And I think that is part of James Madisonís reason too. Decentralizing power in a federal structure is another way of keeping limits and of establishing the limits of the monolithic power of a central government. That is a derivative principle that permeates the whole system.

Did the Nobel Prize make a difference or have any negative effect in your life?

Well, the benefits certainly outweighed the costs by a substantial amount in my own career. I do think that maybe for a young person it would not be good as you are automatically shifted into a position of variety and it would make it difficult to do much further work. George Stigler told me, when I got it, "well, it will take six months to get back to normality" and I think it was two years actually before I got back to normal, because you get a tremendous number of invitations to lecture at very important meetings. You want to go all over the world and there is a tendency to overload yourself. It takes a lot to learn not to do that, how to ration your time and then to get back on the path of some research program. I do think that when you receive the Nobel Prize there is a temptation to become an instant expert on everything. I determined from the outset that I was not going to do that and I simply refused to respond on things I knew nothing about.

I recently read about the creative process of great men like Beethoven, Mozart, Descartes, Poincaré and Einstein. They tell of sudden moments of illumination or mental clarity that led them to create new and unique things. Have you ever experienced something similar?

(Buchanan leaned back in his chair, took off his glasses and replied.)

I can understand that creative process, although in my own case the contribution that led to Public Choice I didnít experience something like that, but I did in some other work on public debt.

I had spent a year in Rome doing research and it was not related particularly to something Iíd studied there. I was at my hotel, getting ready to come back to the United States. It was a very hot day in August and the lift was broken so I was walking down the stairway around the old lift. All of a sudden, halfway down, it just came to me as a flash that the whole theory of public debt was just wrong.

I actually went down stairs and started writing on hotel stationery the essential ideas of what became an article for the American Economic Review and later a book titled Public Principles of Public Debt. It seemed so obvious to me that I felt that I had to get that book written because, if I didnít, somebody else would.

That was the only time that had ever happened to me and I guess that itís the closest Iíve ever come to discovering something. Now in a sense it was indirectly related to Public Choice because it was bringing everything back to the level of individual choice and Public Choice could never have developed without that commonality of approach.

Were you always a partisan of the market economy?

No. I grew up in a solidly Democratic setting and, emerging from the family populist tradition, I was basically populist and pacifist. But six weeks after my enrollment in Frank Knightís course in price theory, at the University of Chicago, I had been converted into a zealous advocate of the market order. Frank Knight was not an ideologue and he made no attempt to convert anybody. But I was somehow ready for the understanding of the economic process that his teaching offered. I was converted by the power of ideas, by an understanding of the model of the market. This experience shaped my attitude toward the use and purpose of economic instruction; if I could be converted, so could others.

I have always thought that our past influences our personality and our achievements. Would you like to tell me something about your life?

(He arched his eyebrows and a timid smile appeared under his moustache. He looked at me and started his account.)

I was born in Murfreesboro, Tennessee in 1919. My family was poor, but, in the county, it was important as my grandfather, John P. Buchanan, was the countyís only governor of the state of Tennessee. I grew up in a huge house on a hill, on a farm that had no owner. I spent many hours of my early years in physical labor. There was always a lot of work to be done and we children were not exempt from family responsibilities. In spite of this, my mother insisted that school time never be sacrificed. Play, however, was never considered to be a serious alternative when work was to be done.

I remember when I was fourteen, or thereabouts, I was left to "split the middles" of a twelve-acre field of corn, the last act of cultivation after which the corn would be "laid-by" until fall harvesting. This work involved a plow pulled by a single mule down the middle between each row of corn. We had a high-strung but strong mule, Rhoda, whose inner tensions matched my own. From the outset I was always driven to finish any job commenced in the shortest time possible. This feature served me to assume a leadership role from an early age. The country life I led during my infancy and adolescence formed good habits in me, I learned to be an early riser, work hard and admire nature.

Scarce resources and the effects of the Great Depression meant that I had to give up my original dream of becoming a lawyer-politician as college was all I could afford. These circumstances allowed me to live at home and to earn enough for fees and books by milking dairy cows morning and night for four years.

Reading was, from the start, important at home. My house did have books around the place, and this fact was influential in my life. Even before I could read myself, I recall my mother reading stories to me that were not childlike. From my very early years, and well before school times, I was given books for Christmas, and I remember each year my first look under the tree was at the books, not the toys.

The truth is that I have always enjoyed work Ė from the hard physical labor of my early years to the mental agony/ecstasy of developing and writing out ideas in later years.

Who were the people who most influenced your life?

(His eyes were fixed on the horizon and after a few seconds he answered)

My mother, who was a role model not only as a mother but in many other respects. To her I owe the habits that I mentioned earlier and which influenced my work patterns throughout my career.

During my student years Charles P. White conveyed to me the importance of the moral element in academic work. But, above all, I think that the most important influences came from Frank Knight and Knut Wicksell.

Frank was the intellectual influence during my years at the University of Chicago, and his influence increased due to the great friendship that grew between us. Knightís qualities of mind were and continue to be those that I seek to emulate: the willingness to question anything and anybody, on any subject at anytime; the categorical refusal to accept anything as sacred and a genuine openness to all ideas.

Knut Wicksellís influence was more indirect but no less important. One day, by sheer chance, from the shelves of the library, I pulled out his 1896 dissertation in German on taxation. This book had not been translated and was unknown. Wicksell laid out before me a set of ideas that seemed to correspond precisely with those that I had in my head, ideas that I would not have dared to express in the public-finance mindset of the time.

I would like to know more about your past and personal life. Is there anything that you would like to add?

Have you read my book Better than Plowing? Itís a small autobiographical book in which I have written about many things in my life. Precisely the aim of one of the chapters is to show people that if James Buchanan could get the Nobel Prize, anyone can. The recognition and acceptance of this simple idea are very important. The fact that I was chosen in 1986 has given hope and has motivated others. There was James Buchanan, a rural child from Tennessee, educated in rural public schools and by local teacher, who had worked on a far from orthodox subject with quite antiquated tools of analysis, who, in spite of all this, was chosen by a distinguished and respected Swedish committee.

 

James Buchanan is a man of character who knew how to extract the vitality and the best of two different worlds.

Our warmest wishes for an exceptional man on his 80th birthday.