James Buchanan (1919–2013)
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Who They Were
James Buchanan (1919-2013) was an American economist best known for founding public choice theory, which applies the tools of economics to political decision-making. He spent much of his career in Virginia, where he helped build an influential research tradition, and he received the Nobel Memorial Prize in Economic Sciences in 1986 for his development of the contractual and constitutional bases for the theory of economic and political decision-making. Public choice analysed politicians, voters and bureaucrats as self-interested actors rather than benevolent servants of the public good, reshaping how economists think about government. Buchanan also made a distinctive contribution to a much older concept, opportunity cost, writing what many regard as the most searching modern treatment of it. He stands in a line of thinkers on that subject running through Bastiat, the Austrian School and Lionel Robbins.
Key Contributions
Buchanan's central achievement was public choice theory, which treats political actors as rational, self-interested agents and studies the constitutional and institutional rules under which collective decisions are made. He also wrote the most searching modern account of opportunity cost. In Cost and Choice: An Inquiry in Economic Theory (1969), drawing on a tradition associated with the London School of Economics, he argued that opportunity cost is inherently subjective and tied to the moment of choice: it is the value the decision-maker places on the alternative not taken, which by definition is never realised and therefore never observed or measured by anyone else. This subjective conception sharpened debates about how costs can and cannot be quantified. He received the Nobel Memorial Prize in 1986 for his work on the foundations of economic and political decision-making.
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American economist and 1986 Nobel laureate who founded public choice theory and wrote a searching modern account of opportunity cost. Play the games that feature James Buchanan: