One of the most exciting intellectual moments of my career was my 1948 discovery of Knut Wicksell's unknown and untranslated dissertation, Finanztheoretische Untersuchungen, buried in the dusty stacks of Chicago's old Harper Library. Only the immediate post-dissertation leisure of an academic novice allowed for the browsing that produced my own dramatic example of learning by serendipity. Wicksell's new principle of justice in taxation gave me a tremendous surge of self-confidence. Wicksell, who was an established figure in the history of economic ideas, challenged the orthodoxy of public finance theory along lines that were congenial with my own developing stream of critical consciousness. From that moment in Chicago, I took on the determination to make Wicksell's contribution known to a wider audience, and I commenced immediately a translation effort that took some time and considerable help from Elizabeth Henderson, before final publication.
Stripped to its essentials, Wicksell's message was clear, elementary, and self-evident. Economists should cease proffering policy advice as if they were employed by a benevolent despot, and they should look to the structure within which political decisions are made. Armed with Wicksell, I, too, could dare to challenge the still-dominant orthodoxy in public finance and welfare economics. In a preliminary paper, I called upon my fellow economists to postulate some model of the state, of politics, before proceeding to analyse the effects of alternative policy measures. I urged economists to look at the "constitution of economic polity," to examine the rules, the constraints within which political agents act. Like Wicksell, my purpose was ultimately normative rather than antiseptically scientific. I sought to make economic sense out of the relationship between the individual and the state before proceeding to advance policy nostrums.
Wicksell deserves the designation as the most important precursor of modern public-choice theory because we find, in his 1896 dissertation, all three of the constitutive elements that provide the foundations of this theory: methodological individualism, homo economicus, and politics-as-exchange. I shall discuss these elements of analytical structure in the sections that follow. In Section V, I integrate these elements in a theory of economic policy. This theory is consistent with, builds upon, and systematically extends the traditionally accepted principles of Western liberal societies. The implied approach to institutional-constitutional reform continues, however, to be stubbornly resisted almost a century after Wicksell's seminal efforts. The individual's relation to the state is, of course, the central subject matter of political philosophy. Any effort by economists to shed light on this relationship must be placed within this more comprehensive realm of discourse.---James Buchanan ("1986 Nobel Lecture") The Constitution of Economic Policy
l have quoted the first three paragraphs of Buchanan's Nobel lecture. In what follows I focus on the second paragraph. So, let me just say about the first paragraph that while there is no reason to doubt the authenticity of the charming opening vignette nor the significance of Wicksell to the history of public-choice theory, one can also recognize in it Buchanan's rhetorical and political savvy to know that his Swedish audience will be pleased by the praise for their compatriot (himself an important influence on Swedish economics). Buchanan's sometime collaborator, Gordon Tullock (who gets a mention in the lecture), was notably absent from that stage and was not known to exhibit such savvy. One may even say that it is consistent with the best insights of public-choice (and Tullock deserves praise for this [recall]) that opportune expressions of praise are, alas, an ineleminable part of the politics of academic recognition and credit.
In addition, Buchanan signals the importance of leisure and serendipity, which is the loveliest consequence of life's uncertainty. I go beyond the text by suggesting that the conditions that make serendipity possible are leisure, a scarce resource itself rooted in structural features of a political economy, and well-prepared minds--it's not just anybody that wanders around the old Harper library.
On the third paragraph it is worth noting that Buchanan self-consciously and explicitly placed a part of his own research as belonging to political even contractualist philosophy. This is, in part, a consequence of one of Buchanan's central advances over Wickell's position. Wicksell took, to simplify, the most important constitutional and institutional constraints as given whereas Buchanan recognized that one could also theorize, with the tools of an economist, about "the choice among rules or constitutions" and, in so doing he utilized "a veil of uncertainty" in order "to facilitate the potential bridging of the difference between identifiable and general interest." In the lecture he makes clear that some of his moves are structurally analogous to, and in part conceptually indebted to, Rawls. (This also helps start to explain yesterday's point about the Kantian roots of public choice.) Some other time I return to explore the differences and affinities between Rawls's "veil of ignorance" and Buchanan's "veil of uncertainty" (regular readers are familiar with my interest in Rawls's engagement with Knightian uncertainty--Buchanan was the student that carried Knight's program forward into intellectual maturity).*
Okay, let's turn to the second paragraph. Buchanan is clear that his is a normative project. And while there is plenty to criticize in public choice with the tools of philosophy, what philosophers can learn from his project has not been fully assimilated. For I think his claims here can be decoupled from his commitment to "methodological individualism, homo economicus, and politics-as-exchange." What follows is a bit abstract and, for the sake of brevity, non-polemical (so without some juicy examples). I rewrite the key claims here as follows:
- Philosophers should cease proffering policy and normative advice as if they were employed by a benevolent despot,+
- When philosophers offer policy and normative guidance we should look to the structure within which political and normative decisions are made.
That is, too much policy-relevant, and ethically salient, philosophy assumes that the conditions under which the uptake of our ideas takes place is irrelevant. This is so despite the very sophisticated traditions of theorizing about the context-sensitivity of assertion (e.g., De Rose). Obviously, the previous sentence is an exaggeration in two senses: first, philosophers are (recall) increasingly willing to apply, reflexively, ideas about inductive risk (Douglas), epistemic injustice (Fricker), and epistemic violence (Dotson) to the norms and institutions of philosophy itself. Second, philosophers have become very interested in non-ideal theorizing as is evidenced by the interest in, say, feasibility constraints (I link to Brennan's work because Brennan himself is influenced by public choice). But non-ideal theory is, as of yet (correct me if I am wrong), not yet context-specific theorizing.
The last sentence of the previous paragraph may generate anxiety about relativism. A lot of my philosophical friends want to make general or invariant claims. While I do not share such anxiety, I think we can tame the anxiety if we follow a version of the third key claim:
- Philosophers should explicitly postulate and model the state/politics, before proceeding to propose measures.
That is, we should analyze and make explicit the political and social conditions under which we speak as normative and theoretical authorities and model the possible uptake of our proposals. For, by doing this we do not undermine the validity of our claims; rather we allow these to be progressively adapted, if necessary, to further salient conditions. That is, by engaging in this modeling exercise we became adept at recognizing and making explicit the factors that are salient to our practices. This last can then feedback into a process of mutual criticism and learning and so make our theorizing less fragile to hidden assumptions.
Of course, the proposed modeling exercise is not needed if we only speak to each other, or if we don't care about what our words do.
* To what degree "methodological individualism, homo economicus, and politics-as-exchange" are "consistent" with the traditionally accepted principles of Western liberal societies is a question I skip today.
+ In 1986 Buchanan's language of 'benevolent despot' may well be taken as a nod to the controversy surrounding Milton Friedman's 1976 Nobel lecture (and Friedman's trip to Chile, and the relationship(s) between Pinochet and the Chicago Boys.) But Buchanan used the phrase throughout his career (see, e.g., this piece from 1962). That is to say, public choice was methodologically self-aware of the risks inherent in treating economics as a political engineering enterprise.
"Some other time I return to explore the differences and affinities between Rawls's 'veil of ignorance' and Buchanan's 'veil of uncertainty'."
I, for one, would like to read that analysis. Is it fair to say that Rawls' critique of Buchanan seeks to replicate Kant's critique of Hobbes and Locke?
Posted by: NTampio | 11/11/2018 at 09:33 PM