...but this line from Buchanan quoted by Don Boudreaux is just wacky. I like Buchanan's work on constitutional economics and public choice a lot. But whenever he writes about Keynes or Keynesianism it always seems to degenerate - not just into something I might disagree with - but complete nonsense.
It's like Hayek on "scientism" for me. It reads like a completely different (nonsensical) Hayek.
Here's the quote:
"The whole Keynesian edifice [the Council of Economic Advisors] was constructed on the preposterous supposition that economic advice is offered to a genuinely benevolent despot, an entity devoid of its own interests, and presumably willing and able to implement, without resistance, the advice offered to it. The early monetarist challenge was directed to the Keynesian analysis and, in itself, did not question the implicit political supposition... Effective authority lodged with an hereditary monarch might represent the closest historical parallel to the implicitly presumed Keynesian model of politics."
American political leadership has sought advice on economic policy from the beginning of the republic. Exactly what about the CEA supposes a benevolent despot? And given that we all recognize this world is not governed by benevolent despots, isn't a council of economists advising the President exactly what you would want? I mean, if we were governed by an idealized benevolent despot, what would be the point? The whole value of the CEA lies precisely in the fact that men are not angels and are not ruled by angels either.
This is not the only time Buchanan distorts the record to promote public choice theory (which really doesn't need the distortions to be promoted - it's a good set of ideas), of course. He's also mangled Pigou in that effort. Last year I was reading through Pigou's Economics of Welfare in the library. This is supposed to be the classic "first, assume a benevolent despot" sort of treatment - largely because Buchanan characterized it as such.
It's entirely different from how it's usually characterized. Pigou regularly discusses the problems of implementation that we now call "public choice theory". All the important points that Buchanan has raised were already in Pigou.
Which is fine. We revamp old theories all the time. Part of the fun of reading old economics books is the realization that they're not as dated as you might expect.
What's not OK is painting Keynesians and Pigovians and Keynes and Pigou as being ignoramuses.
Here is a recent article by Backhouse and Medema on the fallacies of Demsetz, Buchanan, and Coase in their treatment of Cambridge welfare theorists, and Pigou in particular.
I am curious what David Henderson (and anyone else who has worked at the CEA) thinks of this assertion. Were you ever under the impression that you were meant to be advising a benevolent despot?
Procrastinating on April 24, 2017
1 hour ago