In this earlier post I noted that Nancy MacLean, author of Democracy in Chains, is inexcusably ignorant of the economics of the Nobel laureate economist James Buchanan, who she mistakenly portrays as a racist goon for privileged oligarchs. (Again, her ignorance is inexcusable because she chose to write a book about Buchanan’s ideas without bothering to learn those ideas.) Here’s a good example of the kind of utter ignorance that runs throughout MacLean’s book of the meaning of Buchanan’s words.
On page 96 of her book MacLean refers to one of Buchanan’s most-famous articles, his 1963 presidential address to the Southern Economic Association. The title of this address – which was published in the January 1964 issue of the Southern Economic Journal – is “What Should Economists Do?” MacLean fancies that she’s found in this article evidence that Buchanan sought to turn economists away from being concerned with questions of income or wealth distribution. Here’s MacLean (who, crack and careful historian that she is, gets something as straightforward as the date of Buchanan’s election as president of the Southern Economic Association wrong):
Elected president of the Southern Economic Association in 1964, he used his bully pulpit to prescribe “what economists should do.” They should cease focusing on problems of resource distribution – what the field called “allocation problems” – because the very idea that inequality was a bad thing led to looking for remedies, which in turn led the discipline toward and applied “mathematics of social engineering.”
Omigosh, how silly. Face-palm bad. LMAO wrong!
“What Should Economists Do?” is Buchanan’s profound plea for economists to stop thinking of the economy as a machine to be engineered. Society in general, and the economy in particular, are not, Buchanan argued, mechanical devices that require engineering. The economic problem is not an engineering one of fitting given and available resources into their ‘correct’ (i.e., value- or utility-maximizing) slots. That is, the economic problem is not – contrary to what economists over the past several decades had come more and more to assume – one of getting resource allocation correct. Instead, Buchanan insisted, the economy is an emergent and ever-changing order of exchange relationships – exchange relationships only some of which are typical arms-length exchanges in private-property markets. Therefore, to better study the real-world economy, economists should (Buchanan urged) focus their analytical lights on the many different ways that human beings actually do or can engage with each other in mutually advantageous exchanges.
Buchanan’s call for economists to stop focusing so heavily on problems of resource allocation was emphatically not, contrary to MacLean’s claim, a call for economists to stop worrying about or studying income or wealth distribution. Buchanan there said absolutely nothing at all about income or wealth distribution; “What Should Economists Do?” is not an article on, in any way, questions about income or wealth or economic inequality. Not even close! Yet MacLean misinterprets Buchanan’s quite conventional (among all economists) use of the term “allocation” to mean something akin to “income distribution” or “wealth distribution.” This misreading by MacLean of Buchanan would be hilariously funny were it not used by her to portray Jim Buchanan as someone who he most certainly was not.
If MacLean errs on so fundamental a matter as what Buchanan (and the typical economist generally) means by the term “allocation,” she has earned everyone’s distrust in her skills as a scholar.
