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Nobel laureate and public choice economist James M. Buchanan passed away on Wednesday at the age of 93.

Buchanan’s work has long been a quiet background influence on the efforts of The Philanthropic Enterprise to understand from a classical liberal perspective the institutional and ethical dynamics of philanthropy in a free society. This influence has arisen less from his direct study of the philanthropic enterprise (he published a curious essay in 1975 using game theory to limn what he called “the Samaritan’s dilemma and later opposed the “ethics of benevolence” to the “ethics of reciprocity”) than from the wonderful signposts throughout his work that help frame the space within which we are now striving to work.

We can find tremendous inspiration from Buchanan in our efforts to make once again credible a vision of human community made free by constitutional rules and the ethic of personal responsibility and made humane through broad practice of the social virtues such as humility, reciprocity, civility, liberality, and beneficence.

In The Limits of Liberty: Between Anarchy and Leviathan (1975) Buchanan began with this observation:

Precepts for living together are not going to be handed down from on high. Men must use their own intelligence in imposing order on chaos, intelligence not in scientific problem-solving but in the more difficult sense of finding and maintaining agreement among themselves. Anarchy is ideal for ideal men; passionate men must be reasonable. Like so many men have done before me, I examine the bases for a society of men and women who want to be free but who recognize the inherent limits that social interdependence places on them. Individual liberty cannot be unbounded, but the same forces which make some limits necessary may, if allowed to operate, restrict the range of human freedom far below that which is sustainable.

In his ongoing work to articulate the “bases for a society” in contractarian exchange, Buchanan came to acknowledge an important missing element of classical liberal social thought -- community. In Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism (2005), Buchanan pointed to a challenge our conferences and publications have been exploring, at the behest of Dick Cornuelle, for over a decade:

Modern classical liberals, Hayek included, have generally failed to convey the positive value that may be experienced through personal participation in the social order that is itself defined by general adherence to common standards and rules. In part of course, this failure is traceable to the century-plus opposition to efforts to reduce the individual to cell-like existence in artificial collective units. To secure freedom from the collective -- to preserve liberty -- this was, properly, the predominant objective for the post-Marxist classical liberal. It is not surprising that the rejection of collectivism, both in idea and in practice, should have involved a complementary neglect of and appreciation for the communitarian elements in a well-functioning social order informed by the liberal value norms.

Beyond the substantive signposts he erected -- the work, for example, of how to model philanthropic activity at “the level of choices faced by individual actors” still looms large, but ahead, in the work of The Philanthropic Enterprise -- Buchanan taught, and, I am told by those who studied with him, consistently modeled an ethic of scholarship that should also be our guide.

Buchanan recollects in an autobiographical essay, “Better than Plowing” (the essay that opens his 20-volume collected works published by Liberty Fund), that he was converted to classical liberal convictions after only six weeks in Frank Knight’s course in price theory at the University of Chicago. But Knight, he tells us, “was not an ideologue, and he made no attempt to convert anybody.” It was the power of Knight’s ideas about the model of market processes that Buchanan found so compelling, but he goes on to speak of a something more:

Knight became my role model, without which I wonder what turns I might have taken. The qualities of mind that Knight exhibited were, and remain, those that I seek to emulate: the willingness to question anything, and anybody, on any subject anytime; the categorical refusal to accept anything as sacred; the genuine openness to all ideas; and, finally, the basic conviction that most ideas peddled about are nonsense or worse when examined critically.

Buchanan sometimes lamented the waning of older ethical norms and qualities of mind that discouraged “short-term utility maximization.” His own work will bear fruit long into the future, epitomizing the philanthropic spirit in its most classical liberal expression, identifying less with the shortcomings of today and more with the long-term prospects for freedom and, above all, making credible the possibility that in the constitutional revolution that is upon us we can indeed make choices that will increase the chances that we will bequeath to our descendants a social order between Anarchy and Leviathan.

May he rest in peace.

6 thoughts on “James Buchanan (October 3, 1919 – January 9, 2013)”

  1. Buchanan’s treatment of the Samaritan’s Dilemma gave a little game-theoretic illustration of the philanthropic problem of moral hazard or the basic helping conundrum, namely that the stronger the outside help, the more likely the doers or recipients of the help are to exert low (rather than high)effort to help themselves. That is why genuine help to encourage self-help is such a difficult thing to get right, and has to be rather subtle and indirect.
    Elinor Ostrom agreed with Buchanan’s example and reproduced it in one of her little known writings about the aid relationship:
    Ostrom, Elinor, Clark Gibson, Sujai Shivakumar and Krister Andersson 2001. Aid, Incentives, and Sustainability: An Institutional Analysis of Development Cooperation. Bloomington, IN: Workshop in Political Theory and Policy Analysis.
    The payoff matrix for the little game would be hard to reproduce here, but it is all explained on p. 33 of my Helping book.

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