Thursday, January 10, 2013

Brad DeLong on Buchanan

He endorses my account, but then goes on:
"I would go somewhat further: he got a lot right that desperately needed to be gotten right and that nobody else would have gotten right in his absence. He made a difference in economics at more than the margin, which is something you can say of very few economists."
I would agree with the "more than the margin" point, certainly. It's worth noting how fitting a tribute that is in a profession that normally thinks about action at the margin. I have aspirations - but no expectations - of working far off the margin in my own career, although Buchanan certainly did.

I think we need to be careful about "nobody else would have gotten right in his absence" type stuff, though - although it's certainly a nice sentiment at a time like this. Not to diminish Buchanan's contributions, but this seems like an appropriate time to highlight Backhouse and Medema's (2012) article in the Cambridge Journal of Economics, "Economists and the analysis of government failure: fallacies in the Chicago and Virginia interpretations of Cambridge welfare economics". Public choice insights were all over the place at Cambridge, especially in the work of Pigou. Over the last two days I've been dog-earing a mountain of passages spanning Keynes's career showing that public choice theory was hardly foreign to him. There was no "romanticization of politics" to speak of, and one refreshing thing about reading economics in just about any period is that economists are (almost) universally free of such romance. Most of the claims to the contrary are simply advertising efforts by public choice theorists.

Did public choice theory turbo-charge our formalization and understanding of these insights?

Without a shadow of a doubt, it did.

Is it worth always reminding people that macroeconomies exist in an institutional context, and that our abstracted models give us a reason to think dY/dG could very well be positive and even large, but that whether it is positive or large is always (1.) conditional on the sorts of institutional issues Buchanan worked on, (2.) an empirical question?

Definitely.

But would we have missed this without public choice theory?

I don't think so.

Do theorists who choose to focus their model-spotlights on other issues forget that the economy exists in an institutional context?

In most cases I don't think they forget that and claims that they do are largely a case of posturing.

None of this is meant to diminish public choice theory at all. It's just fleshing out a little what I alluded to earlier about my view of the limits of what we can claim for it.

Thanks for your thoughts on Buchanan, Brad.

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