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Credits: Edward Elgar Publishing

1James M. Buchanan was a towering figure in 20^th century economics. He did not single handedly resurrect classical political economy in the second half of the 20^th century and rescue it from the Marxist interpretation or the technocrats’ disregard, but any account of modern political economy would be woefully incomplete without giving Buchanan primary of place in the narrative. His main insights are basic: (1) one cannot engage in public economic analysis without postulating a theory of the state and thus a political theory; (2) it is political theory that determines the desired scale and scope of state activities; (3) it is the economists’ role to study who is responsible for the production of those activities, how are they going to be paid for, and for whom will they be provided to; (4) in answering those questions it would be analytically helpful to insist on behavioral symmetry across institutional environments; same players, different rules; (5) and as such (a) we must always talk about the interaction between rules and strategies and our understanding of “good” rules must account for best response strategies given those rules, and (b) we economists should cease proffering advice on public affairs as if we were offering that advice to a benevolent despot.

2These five insights summarize a tiny slice of Buchanan’s contributions to political economy, but an essential slice. His published work spanned from the 1940s to 2010s, and across the spectrum of philosophy, politics and economics. As was remarked more than once in my presence, James Buchanan wasn’t just an economics department unto himself, he was an entire university in the social sciences and humanities. His Collected Works runs 20 volumes, and that didn’t include any of the work past from the last 13 years of his life. Buchanan, it should be stressed, never stopped writing. But as I stressed above, he never walked alone. He was a collaborative scholar, who had co-authors from early in his career, and he sought to build communities of collaborators in his academic entrepreneurship. Buchanan engaged in two levels of academic entrepreneurship—both internal to the departments and universities in which he worked, and externally within the broader intellectual community. It is often said about the beautiful game of basketball that it is a team game played by individuals, and at the highest levels of competition you see this fluidity between individual talent and creativity and team play through knowing a role and making the relevant sacrifices. One of my favorite quips about the sport is when the great Michael Jordan was playing for legendary coach Dean Smith, Smith told him: Michael, there is no I in TEAM, to which Jordan supposedly replied, But Coach, there is an I in WIN. James Buchanan was a Michael Jordan level economist and political economist, and he was always part of a team of researchers.

3Young Yoon happens to be the last of a long list of collaborators with Buchanan, including names such as Gordon Tullock, Richard Wagner, Geoffrey Brennan, and Roger Congleton. This book is a collection of papers reflecting an aspect of their collaborative efforts. My own personal preferences would see greater original insights in the Buchanan and Yoon collaboration over generalized increasing returns than the focus on political disorder in this volume. But let me be clear, there are gems in this slim volume, and I can recommend it to readers without hesitation. Before I get to that, it might be valuable though to consider a quote from Congleton’s foreword to the volume about co-authoring with a scholar of Buchanan’s stature. It cannot be easy because the shadow cast by this towering figure is so large as to cover over the collaborator. As Congleton writes: “The coauthor’s contributions are creative in their own right, but Buchanan normally integrates them into his own universe, which gives them additional depth and connectivity than his coauthors would have developed on their own; at the same time the insights of his coauthors expand his own universe in directions that he might not have explored working alone.” (ix) Again, for those of you old enough to remember and interested enough to pay attention, think Michael Jordan, but joined not only by Scottie Pippen, but also John Paxton and then Steve Kerr (who both hit critical shots to win titles off Jordan passes). It is a thing of beauty to watch, a team game played by brilliantly talented individuals. Welcome to the wonderful world of economics and political economy in Buchanan’s universe. Young Yoon was part of that universe and made important contributions so that Buchanan was able to continue with such a strong voice throughout his career.

4In Individualism and Political Disorder, Buchanan and Yoon explore the logic of majoritarian politics. It was a fundamental concern of Buchanan from the beginning of his career to worry about political externalities with the same urgency that his fellow economists were concerned with market externalities. If you read early on in Buchanan’s career he expressed this concern whether he was exploring the political decision to clear a swamp in a mosquito abatement effort, or constructing highways to ease transportation in the US south. Remember my earlier point, who is responsible, who pays, and who gets to use. In that political process over the supply and demand for public goods, systematic distortions can and do occur. Some groups benefit at others’ expense. The majoritarian logic is not one of easy reconciliation of competing interests. Milton Friedman once postulated that while the invisible hand of the market transforms private interests into the public interest, the visible hand of politics transforms the public interest into private interests. Buchanan doesn’t present his position as bluntly as Friedman, but in exploring the systematic logic that produces political disorder he is presenting a more nuanced version of Friedman and with attention placed on political externalities and dysfunctions.

5If the magic number in markets is 2 parties to an exchange, the logic changes in politics where the number becomes 3, and 2 can get together to exploit 1 through the logic of majoritarian voting. In their work, Buchanan and Yoon not only explore this, but look at the problem of the tragedy of the commons and anticommons, and the implications for collective action. Perhaps to my mind the most important essays in this volume pertain to the institutional flaws that produce the fiscal commons. The fiscal commons, again a concept one can read throughout Buchanan’s work, took on added significance during the global financial crisis. The basic idea is that when the expenditure and revenue decisions are separated, the flood of interest group demands will be unleashed and fiscal irresponsibility will ensue.

6The analysis provided leads to a final point I want to stress about Buchanan’s work—institutional problems demand institutional fixes. Improvements in politics is not to be found in different parties, or different elected officials, but in different rules of the political game which govern the process. As this book ends: “The other half of the familiar adage is often overlooked. This half should say: ‘If it is broken, fix it.’ The fiscal structure is broken; this fact is widely recognized by almost everyone. Rather than propose seemingly straightforward action aimed directly at results, that is, through fiscal austerity, it is helpful to examine the institutional structure with a view toward reform that might offer promise of sustainable patterns, both in taxation and in spending. Such reforms become increasingly possible as fiscal tragedy is more widely acknowledged to describe current reality.” (142)

7This book is highly recommended to those interested in political economy and public economics. It contains gems from a two-decade collaboration that was both productive and relevant to the political economy of our times. And, like with other works of Buchanan, the reader walks away with a deeper understanding of the systemic reasons for dysfunction, and reasons for hope in constitutional change of the rules of the game that will be able to fix the dysfunctions previously diagnosed.