James M. Buchanan, Nobel Prize-Winning Economist, Dies at 93

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James M. Buchanan, the U.S. economist who won the 1986 Nobel Prize for applying the principles of economic self-interest to understand why politicians do what they do, has died. He was 93.

He died today, according to Alex Tabarrok, director of the Center for Study of Public Choice at George Mason University in Fairfax, Virginia, where Buchanan was a distinguished professor emeritus of economics. The cause wasn’t immediately available.

The Royal Swedish Academy of Sciences awarded Buchanan the Nobel in economics “for his development of the contractual and constitutional bases for the theory of economic and political decision-making.”

Buchanan was a pioneer in the field known as public-choice theory, which views government decisions through the personal interests of the bureaucrats and elected leaders who want to advance in their careers and win campaigns.

He summarized public choice as “politics without romance” and said it helps explain why established bureaucracies “tend to grow apparently without limit,” why pork-barrel politics endure and why the tax system is defined by “the increasing number of special credits, exemptions and loopholes.” At the time he received the award, his ideas were finding a receptive audience within the administration of President Ronald Reagan.

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http://www.bloomberg.com/news/2013-0...ies-at-93.html

Yep he's from my school, MTSU.

http://www.businessweek.com/news/201...ist-dies-at-93

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James M. Buchanan, the U.S. economist who won the 1986 Nobel Prize for applying the principles of economic self-interest to understand why politicians do what they do, has died. He was 93.

He died today at LewisGale Hospital at Montgomery in Blacksburg, Virginia, according to the Center for Study of Public Choice at George Mason University in Fairfax, Virginia, where Buchanan was a distinguished professor emeritus of economics. No cause was given.

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Cato pays tribute: http://www.cato.org/blog/james-m-buchanan-rip
YAL pays tribute: http://www.facebook.com/yaliberty/posts/425506010851800

Yeah, I posted that in the economics forum. I guess two threads isn't too much.

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Originally Posted by sailingaway

Yeah, I posted that in the economics forum. I guess two threads isn't too much.

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I generally post here regardless of the topic, because no one really pays attention to the smaller forums.

RIP.

A really outstanding voice for free markets. Heavily underappreciated.

Tributes from the Circle Bastiat (Mises blog):
http://bastiat.mises.org/2013/01/jam...anuary-9-2013/
http://bastiat.mises.org/2013/01/jam...uchanan-r-i-p/
http://bastiat.mises.org/2013/01/rip-james-m-buchanan/

From wikipedia:

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As Buchanan put it: "I certainly have a great deal of affinity with Austrian economics and I have no objections to being called an Austrian. Hayek and Mises might consider me an Austrian but, surely some of the others would not." Buchanan went on to say that: "I didn't become acquainted with Mises until I wrote an article on individual choice and voting in the market in 1954. After I had finished the first draft I went back to see what Mises had said in Human Action. I found out, amazingly, that he had come closer to saying what I was trying to say than anybody else."

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http://mises.org/journals/rae/pdf/rae4_1_6.pdf
http://blog.heritage.org/2013/01/09/...es-m-buchanan/
http://bleedingheartlibertarians.com...nan-1919-2013/

was he named after one of our presidents of the 1800s?

Yep he's from my school, MTSU.

Daniel Kuehn recent posted this blog entry...Mario Rizzo on Buchanan.

Here's my comment on his entry...

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"I am on board with the importance of opportunity cost."

Not sure why...but for some reason that reminds of John Quiggin saying, "Opportunity cost is what matters"

What's opportunity cost?

A. One king spending the country's money
B. 500+ congresspeople spending the country's money
C. Each person spending their own money

Opportunity cost isn't considering the alternative uses of other people's money...it's considering the alternative uses of YOUR own money. It has to be your money because you exchanged YOUR life for it. What have you had to sacrifice in order to earn your money? How much value do you attach to those sacrifices? You're the only person who can truly know that.

Opportunity cost means that your preferences matter. Again, with gusto this time...opportunity cost means that your preferences matter.

The definitive theoretical justification for our tax system isn't based on the idea that your preferences do not matter...it's based on the idea that when it comes to public goods...you'll lie about your true preferences in order to pay less money for the public goods that you benefit from. This is the preference revelation problem which Samuelson discussed in his paper...The Pure Theory of Public Expenditure...which has been cited over 5,000 times.

Samuelson agreed that your preferences matter and that they are absolutely necessary to determine optimal public expenditures. But, given that people would have the incentive to under report their values, he voted for the alternative: coercion and allowing government planners to guesstimate our true preferences.

The solution to the preference revelation problem is simple...tax choice. If people had to pay taxes anyways, but they could choose where their taxes go, then they would have absolutely no incentive to lie about their true preferences. How would it benefit them to lie? It wouldn't...it would decrease the amount of benefit they derived from their public spending decisions.

Here's the Wikipedia entry that I recently created for the benefit principle and here's a thread where I give an overview...Voluntary Exchange Theory.

Buchanan was there...he was RIGHT there...he was far closer to the actual problem and actual solution than any other economist.

interesting observation! thanks Xerographica!

i'm becoming more aware of him and his ideas, these threads are a nice way to be respectful of his life's work!