Economy//

In defence of politics: James Buchanan’s legacy for the left

Written by: Ben Jackson on 16 January, 2013
Filed under Economy

James Buchanan, one of the most influential intellectuals of the last fifty years, died last week. The mainstream media and the right-wing blogosphere rightly devoted considerable space to tributes and reminiscences, as well as to some early reflections on Buchanan’s legacy. In contrast, there has been a rather muted response on the left. Yet James Buchanan should command the left’s attention, for he is the thinker who pioneered a distinctive market-liberal analysis of democratic politics that has now become ubiquitous. Although Buchanan was not as famous in non-scholarly circles as those other two academic titans of the free market right, Milton Friedman and Friedrich Hayek, he ranks alongside them as a key intellectual architect of the numerous neo-liberal victories in the political battles of the 1980s and 1990s.

What did Buchanan contribute to this struggle? It would be exaggerating only slightly to say that Buchanan (in collaboration with others, notably his long-standing co-author Gordon Tullock) changed the way we think about politics. But Buchanan’s reconceptualisation of politics has not been fully explained in many of the recent appreciations written about him. A good example of the standard summary of Buchanan’s work presented in these tributes can be found in his obituary in the New York Times, which noted that Buchanan “was a leading proponent of public choice theory, which assumes that politicians and government officials, like everyone else, are motivated by self-interest — getting re-elected or gaining more power — and do not necessarily act in the public interest”.

This description captures part of Buchanan’s contribution, but it neglects what was really radical about his writing. Indeed, it arguably conveys a rather sanitised version of Buchanan’s thought. The radicalism of Buchanan’s public choice theory sprang from his claim that it was not just politicians and officials who were self-interested, but also democratic citizens. Voting was most fruitfully analysed, Buchanan suggested, on the assumption that citizens cast their ballots on the basis of self-interest rather than any notion of the public good.

Buchanan’s chief preoccupation, especially in his early work, was that democratic citizens would rationally vote into power governments committed to expanding new forms of collective action such as social welfare programmes and funding them by imposing punitive taxes on the better off. The rise of the post-war welfare state was in Buchanan’s view not, as its exponents claimed, motivated by collective solidarity, but was rather the product of the self-interested voting of majorities who could forge election-winning coalitions at the expense of minority groups. It was therefore majority rule as much as bureaucratic self-interest that in Buchanan’s view would lead to the over-expansion of the state. To prevent this, he thought it was necessary to construct a set of binding constitutional rules that could constrain popular sovereignty and thereby narrow the capacity of majority rule to undertake threatening forms of collective action such as social spending, taxation, and labour market regulation.

Underpinning Buchanan’s analysis – and the arguments of his peers on the neo-liberal right such as Friedman and Hayek – was the striking claim that freedom and prosperity can only be advanced by expanding the role of market choice and narrowing the sphere of democratic collective choice. In their eyes, democratic decision-making was coercive and uniform, imposing the will of the majority on everyone, whereas the use of markets was pluralistic, sensitive to individual choices, and the product of free reciprocal exchange between individuals.

While other social scientists such as Mancur Olson and Kenneth Arrow shared with Buchanan an interest in applying economic methods to politics, and shared at least part of his analysis about the shortcomings of collective democratic choice, they differed from Buchanan in being as worried about market failure as they were about democratic failure. For Buchanan, it was mainly the pathologies of majoritarian democracy and the state that merited concern; he was not much concerned about – indeed seemed to doubt the existence of – coercion in market relationships.

Buchanan’s work was therefore crucial to the formation of the neo-liberal ideas that have exercised such a pervasive political influence in recent years. At its core, neo-liberalism seeks to limit the sphere of democratic decision-making so as to open up new areas of politics and society to market forces. The exponents of these ideas were (and are) confident that this would increase both economic prosperity and individual liberty. They were (and are) further convinced that a more idealistic vision of politics, understood as the promotion of ‘the common good’ or ‘social justice’, was simply lofty rhetoric concealing the pursuit of self-interest.

This view of democratic politics as both self-interested and in crucial respects inferior to market exchange – a view which is widely and casually espoused today – poses a significant challenge to the left. Progressive politics is based on the premise that collective action and active government can improve people’s lives. Yet faced by the still resilient neo-liberal ideas that pervade our culture, this premise now requires a powerful and persuasive restatement. This, for the left, is James Buchanan’s legacy.