… is from page 15 of my colleague Richard Wagner’s new intellectual biography of James Buchanan, James M. Buchanan and Liberal Political Economy; here, Dick is speaking of Buchanan’s time at the University of Virginia (1956-1968) where, for much of this time, his colleagues included Ronald Coase, Warren Nutter, Gordon Tullock, Rutledge Vining, and Leland Yeager:
For the Virginia faculty, as for Hayek before them, the knowledge contained within an economic system was distributed throughout the economic system and never collected at one point in that system. This distributed character of relevant knowledge was, moreover, a methodological rather than a normative reason for adopting the classical liberal default position in support of laissez faire.
DBx: Because the amount of knowledge that must be used at each moment in time to enable a modern, complex economy (and society generally) to work is incomprehensibly vast, with much of it subjective – and because there is no way in practice or even in theory to transport that knowledge into a single mind (or into a single, overarching plan) – the intellectual challenge is to explain how the order that we observe around us emerges. The related political challenge is to identify institutions that encourage each person to act on his or her unique knowledge productively rather than predatorily. Constitutionally limited government and free markets are the best means of securing the greatest real-world approximation to this result.
Anyone who is truly interested in the ideas and influence of Jim Buchanan should read Dick’s new book. Those interested only in careless fairy tales with cardboard villains can instead read books catering to those unintellectual tastes.
(I should add that Dick Wagner earned his PhD in economics as one of Buchanan’s students at UVA.)