Approach To Economic Analysis
Buchanan emphasised that public policy cannot be considered in terms of distribution, but is instead always a question of the choice over rules of the game that engender a pattern of exchange and distribution. Buchanan is largely responsible for the rebirth of political economy as a scholarly pursuit. Buchanan's work in public choice theory is often interpreted as the quintessential case of economic imperialism. However, as Amartya Sen has pointed out, Buchanan should not be identified with economic imperialism. Sen states that Buchanan has done more than most to introduce ethics, legal political thinking, and indeed social thinking into economics. Crucial to understanding Buchanan's system of thought is the distinction he made between politics and policy. Politics is about the rules of the game, where policy is focused on strategies that players adopt within a given set of rules. “Questions about what are good rules of the game are in the domain of social philosophy, whereas questions about the strategies that players will adopt given those rules is the domain of economics, and it is the play between the rules (social philosophy) and the strategies (economics) that constitutes what Buchanan refers to as constitutional political economy”.
Buchanan's important contribution to constitutionalism is his development of the sub-discipline of constitutional economics. According to Buchanan the ethic of constitutionalism is a key for constitutional order and "may be called the idealized Kantian world" where the individual "who is making the ordering, along with substancially all of his fellows, adopts the moral law as a general rule for behaviour". Buchanan rejects "any organic conception of the state as superior in wisdom, to the citizens of this state". This philosophical position forms the basis of constitutional economics. Buchanan believes that every constitution is created for at least several generations of citizens. Therefore, it must be able to balance interests of the state, society, and each individual.
Buchanan is considered to be a quasi member of the Austrian school of economics. 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."
Read more about this topic: James M. Buchanan
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