Last weekend I participated in a seminar dealing with Liberty and The Economics of Politics. We read many of the classic works from James Buchanan and Gordon Tullock related to public finance, public choice, and social philosophy. It was in my opinion as wonderful conversation in which I learned much.
In re-examining Buchanan's work again, however, it strikes me how consistent he was from early papers onward. Buchanan sought to carve out a niche in public economics which properly constrained the ambitions of the economics as social planner. Political economy in his hands is a tool for social understanding, not a tool of social control. In fact, like his mentor Frank Knight, the effort by economists to assume a position as technical expert who stands in a privileged place in democratic society is in fact radically anti-democratic and must be rejected as such.
The task of the political economists is to assess alternative institutional arrangements with respect to their impact on the ability of free individuals to realize peaceful social cooperation and productive specialization. This does require mastery of the technical principles of the discipline of economics, which not everyone can possess. But with those tools in their possession, the economist still does not have any claim to privilege position in the democratic decision process that constitutes collective action. All he can do is offer his proposed reforms as hypotheses to be tested in the public conversation. He can try to persuade his fellow citizens of the value of his perspective, but he has no expert claim to impose his solutions on the body politic. Buchanan's work is both a counsel of humility while also being a cause for hope that reform can improve our situation.
But for the most part, the political economist must be content with the role of the student of society, who with the powerful tools of analysis provided by political economy can diagnose the social ills that plauge us. An example of what the framework of political economy can provide is provided in the following discussion of the tragic consequences of bad public policy in Detroit. My good friend and colleague Todd Zywicki is one of the key figures discussing the issues in this video -- check it out.
Political economy is a very good tool for social understanding and social critique, but it a misuse of this tool to use it for social control no matter how much we economists may want to assume this role in society.
I have long thought a really great dissertation could be written on "The Tale of Two Cities: Detroit and Pittsburgh", which does a comparative political economy analysis of the policy paths followed since the late 1970s and early 1980s.