Some Wisdom From Mr. Buchanan Late at Night

|Peter Boettke|

James Buchanan was my teacher.  I learned much from him in and out of the classroom during my student days.  But I have learned far more from him in the years since.  I turn to his works constantly for not only insight on how to tackle problems in economics and political economy, but also on the nature of our task as economists, political economists, and social philosophers.

For the past week -- ever since I read about Soros's project and $50 million investment in the future of economic thinking -- I have been obsessed with Buchanan's essay "Economics as  Public Science" and thinking through what I consider the implications for our role as educators and as researchers.

In that essay, Buchanan argues that our primary justification for existence as discipline is the pedagogical one of communicating the basic principles of the discipline of economics to the public (students) so that they can in turn become informed participants in the democratic process. 

In an earlier essay "General Implications of Subjectivism", Buchanan argues that 'Austrian economists' "seem, somehow to be more successful in conveying the central principles of economics to students than alternative schools, enclaves, or approaches." Buchanan argues that the are two important points to stress. First, the most important social role of the economist is to be a teacher of the principles of the spontaneous order of the market economy.  We must be teachers, not social engineers.  Second, we must resist the maximization paradigm and instead emphasize the spontaneous coordination the market economy achieves.  We study exchange, not allocation and optimization subject to constraints.  Economics as applied mathematics isn't capable of serving its social role.

Buchanan actually goes much further and relates his conversation to science, and points out that indeed the principle of spontaneous order is a scientific principle.  But economics is a science different from the natural sciences.  To practice the science of economics as Buchanan conceives of it, we must "stay within the exchange paradigm" otherwise "we lose the legitimate scientific principle and, instead, launch off into the scientistic implications that emerge directly from the maximization paradigm. Economists find themselves measuring social costs and social benefits, along with a little of everything else."  This isn't economic science for the simple reason that exercises in optimality are devoid of economic content.