Quotation of the Day…

by Don Boudreaux on October 18, 2012

in Budget Issues, Politics, Reality Is Not Optional, State of Macro

… is from pages 505-506 of Jim Buchanan’s 2000 collection Debt and Taxes, which is Vol. 14 of the The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1997 essay “The Balanced Budget Amendment” (link added):

There is a long philosophical tradition in which the whole activity or enterprise of politics is modeled in an idealistic way.  Political agents are implicitly presumed to be both benevolent and omniscient.  They seek only to further “the public interest” in some inclusive, aggregative sense, and, perhaps more importantly, they are presumed to know precisely what this interest is….

It is from within this time-honored tradition of idealized politics that the whole Keynesian theory of fiscal policy emerged during the middle decades of the twentieth century.  Keynes did not seriously think about the political institutions through which budgetary decisions are implemented.  The “presuppositions of Harvey Road” embodied the notion that macroeconomic policy is to be made by a small, select and sophisticated elite, whose members are both fully informed and personally disinterested in securing private advantage.


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