News Editor, The New Republic
In the introduction to your interview of Democracy in Chains author Nancy MacLean , you write that my late Nobel laureate colleague James Buchanan  insisted “that democracy and liberty – defined as free market capitalism – were incompatible and that it was necessary to limit participatory democracy to protect the property rights of the extremely wealthy. Though he did no empirical work, he was remarkably influential in the field of public choice theory, which essentially argued that markets could never fail and governments always did.”
Your characterization of Buchanan verges on libelous. For starters, Buchanan did not believe that “markets could never fail.” Here’s just one of many quotations from Buchanan’s published works that disprove your accusation: “Markets fail; governments fail.” (This quotation is from page 130 of Jim’s 1976 paper “Methods and Morals in Economics ” as this paper is reprinted in volume 19 of The Collected Works of James M. Buchanan .) Much of Buchanan’s work is a careful comparison of what he always insisted are the imperfect outcomes of markets with the imperfect outcomes of politics. It’s true that Buchanan’s comparisons of politics with markets led him to conclude that imperfect markets outperform imperfect politics more often than most people suppose. But it is emphatically untrue that he believed that markets “never fail.”
Worse is your assertion that Buchanan believed that democracy and liberty are incompatible. Although Buchanan – like every other serious person who’s pondered the matter – opposed unlimited majority rule, throughout his life he sought ways to ensure that each and every adult has an equal voice in the political arena. Jim understood that a key benefit of such political equality is the maximum possible protection of individual liberty.
Finally, even if we ignore Buchanan’s proposal for confiscatory inheritance taxation, it’s grotesque to suggest that Buchanan wished to protect the private property rights only of “the extremely wealthy.” Jim advocated strong and equal protection of everyone’s private property rights. So I challenge you (or Prof. MacLean, or anyone else) to put your money where your mouth is: search for passages in Buchanan’s writings showing that he wished to protect only the property rights of the rich, and that he was hostile, or even indifferent, to the property rights of the non-rich. For each such passage you find I’ll pay you $1,000. But if you’re unable to find any such passage you pay to me $100. Deal?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030