The real purpose of the program: a case study in James M. Buchanan’s efforts at academic entrepreneurship to “save the books” in economics

See https://​www.​nobelprize.​org/​prizes/​economic-sciences/​1986/​summary/​ for the citation.

See Boettke (2019) for direct treatment of MacLean’s book and documentation of the program’s explicit intent and the strategy pursued to achieve its goals during the UVA period. The title of the review essay, “The Allure and Tragedy of Ideological Blinders Left, Right and Center”, provides insights into the main thrust of the argument, namely that MacLean’s book is a tragic missed opportunity for genuine scholarly dialogue on fundamental issues in political economy and social philosophy.

Contrast Buchanan’s point of view with that of twentieth century economists such as A. C. Pigou, J. M. Keynes, Paul Samuelson, Richard Musgrave and, more recently, Esther Duflo (2017). As Buchanan writes in a letter to Mancur Olson, “mainstream economists conceive themselves to be members of an ‘establishment elite’ who somehow have a divine right to advise whatever governments may exist toward doing the things that this elite knows is really ‘good’ for society at large” (Levy and Peart 2020, p. 20; Buchanan 1971). The economists adopting the alternative perspective are engineers and their purpose is to fix social problems. Also see Greg Mankiw’s discussion of the different conceptions of the economist (Mankiw 2006).

Hayek applied the term scientism to connote the unwarranted adoption of the methods of the natural sciences to the practice of the human sciences, such as political economy. Hayek elaborated his critique in his The Counter-Revolution of Science (1952) and also later in his Nobel Lecture “The Pretense of Knowledge” (1974). See https://​www.​nobelprize.​org/​prizes/​economic-sciences/​1974/​hayek/​biographical/​.

His influence has been discussed at length in the history of economics literature, e.g., Coats (1967) and Kumekawa (2017). Marshall was able to use his status to control positions in the UK academy for his former students. In the English-speaking world, Marshall was able to “corner the market” for academic economics, so to speak, from 1900 to the 1930s, only to be supplanted over the next 50 years by Keynes and the Keynesians, especially under the hegemonic influence of Paul Samuelson between 1950 and 1975.

The progressive transformation of public administration and economics has been a subject of inquiry in the work of Vincent Ostrom (2008 [1973]). In addition, see Aligica et al. (2019). The link between public administration and economic science also is discussed in Boettke (2018a). This progressive transformation of public administration and economics became a major influence on Hayek’s own professional arc (Boettke 2018b).

Buchanan was under an obligation to return and teach in the South upon completion of his doctoral studies at the University of Chicago from 1946 to 1949, as a condition of some of the funding he received for his graduate education.

Buchanan, upon learning that the existing faculty at UVA also was recruiting Nutter, wrote to him on 23 January 1956 to encourage him to join the faculty, stating, “I think that Virginia has much to recommend it, although, of course I know nothing of the inner workings of either the department or the university. I know Rutledge Vining is a good man, and there are several sharp younger fellows. They have a reasonably good-sized graduate program…. Two of the professors, Snavely and Hyde, have only a year or two left before retirement. This should provide a good basis for getting the sort of department we should like to work with” (Buchanan 1956c).

An unusual family connection exists between Buchanan’s project and the Snavelys: Tipton Snavely once was chair of the Economics Department at UVA (to this day, the Best Dissertation Award in Economics at UVA is named after him) and his son William Snavely was chair of the Economics Department at George Mason University (to this day, the department’s Most Outstanding Graduate Student award is named after him). The Snavelys played a significant role in creating opportunities for Buchanan’s research and educational vision in the Commonwealth of Virginia.

Ronald Coase won the Nobel Prize in 1991 “for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.” See https://​www.​nobelprize.​org/​prizes/​economic-sciences/​1991/​coase/​facts/​.

Tullock first was a postdoctoral fellow at TJC and then was brought back to the Department of Economics as an associate professor.

In Public Finance and Public Choice, Buchanan highlights a distinctive aspect of the education of economists at Chicago versus elsewhere, such as MIT or Harvard. “One characteristic feature of graduate training in Chicago, then as well as now, warrants mention here. The Chicago economist does not project an image of becoming an adviser to governments, thereby proffering advice on how to manage national economies, in the large or in the small. The Chicago economist learns how economies work rather than how economies might be controlled. Of course[,] this generalization has its notable exceptions, but the contrast in professional attitudes in this respect between Chicago, and, say, Harvard, maybe critical in influencing both career and research paths” (Buchanan and Musgrave 1999, pp. 16–17).

Knight, as well as Ludwig von Mises and F. A. Hayek, warned about the problems caused in the social sciences by “scientism”.

While committed more or less to the Knight program, Nutter was drawn more to the economic analysis of public policy rather than the philosophical puzzles of a liberal democratic order that occupied Buchanan from the very beginning of his career.

See Richard Swedberg’s (1998) discussion of the Weberian project in economic sociology wherein the logic of economic life always is played against the background of political, legal, and social institutional settings. For a discussion of some of the implications of that discussion for political economy, see Boettke et al. (2008).

See Ross Emmett (2006) for a discussion of Knight’s own efforts to steer the path between historical institutionalism and neoclassical formalism. In Buchanan and Nutter, that effort would result in a “genuine institutional economics" wherein the various intellectual currents of property rights economics, law and economics, market process economics, and public choice economics would be weaved together into a new paradigm for modern political economy.

See Buchanan (1956a, b, 1956–1957, 1958). The preliminary drafts, and the final draft are to be found in the University of Virginia’s Special Collection. The preliminary drafts circulated in December 1956, followed by the final draft statement in 1956–1957, and then a summary explanation of the Thomas Jefferson Center for Studies in Political Economy and its purpose and programs is published in The University of Virginia News Letter (October 15, 1958). A close reading will reveal a very tight correspondence between the purpose and activities to achieve that purpose between all of theoe documents. The real purpose of the program was clear from the start to anyone who understands the indictment of the Samuelsonian revolution in economics that followed the publication of both his Foundations of Economic Analysis (1947) and Economics (1948). Samuelson embodied a complete shift in economic science at a methodological, analytical, and policy level. Buchanan (and Nutter) were the first among the then younger generation to resist it from within the neoclassical tradition of price theory. They would be followed in the ensuing decades by what became known as New Institutional Economics and would include future Nobel Prize winners such as Ronald Coase, Douglass North, Vernon Smith and Elinor Ostrom. Those eminent scholars constitute what has been dubbed mainline economics, a term inspired by Kenneth Boulding (1971), to discuss the long intellectual reach of Adam Smith (see Boettke 2012; Boettke et al. 2016; Mitchell and Boettke 2016).

In one draft of the preliminary proposal, Buchanan does warn that the leadership of the proposed Center and the university administration must be careful in choosing its name so as not “to incite criticism that it is an organization with extreme views” (Buchanan 1956b, p. 2). Given the prevailing orthodoxy, it should not be surprising that the wrong name would result in unproductive and needless battles. So, even if terms such as “economic liberty” or “individualism” would reflect aspects of the “real purpose of the program”, they should be avoided; the scholarly enterprise otherwise might be tagged as “a propagandizing agency” (Buchanan 1956b, p. 2). In that same draft of the proposal, he anticipates critics who, based on the modern drift of economics and the social sciences toward scientism, would accuse an effort to resurrect political economy and social philosophy as “unscientific”. At the same time, Buchanan (1956b, p. 7) warns that because of the space created for currently unorthodox approaches safeguards must be firmly in place to weed out “extremists”. Buchanan (and Nutter) were interested in building a scientific and scholarly enterprise, not a policy analysis shop, let alone a political activism shop.

His organizational efforts with the Committee on Non-Market Decision Making and, then, the Public Choice Society, genuinely were interdisciplinary from the very beginning and included not only William Riker and the Ostroms from political science, but also James Coleman from sociology and John Rawls from philosophy. On Rawls and Buchanan, see their correspondence reproduced in Levy and Peart (2020, pp. 36–40).

It must be remembered the TJC was a research center within a department, not an independent unit, and certainly not an entire university. Selecting and sorting membership into this sub-community of scholars was critical to success of the scientific mission.

It may be important to stress here, as Lionel Robbins (1952) does in his classic text The Theory of Economic Policy in English Classical Political Economy, that it is almost impossible to separate the economic analysis of Adam Smith and his contemporaries from the co-evolution of the liberal institutions of governance in Great Britain. It is in that context, we argue, that Buchanan is invoking “Manchester” liberalism—a term associated with the defense of free trade and the repeal of the protectionist Corn Laws in 1846.

See Boettke (2018a) for a discussion of the impact of progressivism on public administration and, in turn, on economics. Also see Aligica et al. (2019).

This letter can be found in Levy and Peart (2020, p. 19).

Ross Emmett (2013) details Knight’s views on institutionalism and economics, along with his efforts to develop a uniquely neoclassical institutionalism as opposed to the heterodox institutionalism at the University of Chicago. Buchanan often would use the phrase “a genuine institutional economics” in his writings. Without that context, the critics of Buchanan and the Thomas Jefferson Center often confuse a methodological argument with an ideological one, see (Levy and Peart 2020 p. 53; Buchanan 1971; Thomas Jefferson Center for Studies in Political Economy 1960).

In the late 1970s and early 1980s, when Buchanan would once again run afoul of his critics, this time at Virginia Tech, culminating in his departure and that of the Center for Study of Public Choice in 1982 to George Mason University, he would produce a biting essay “The Dishwater of Orthodoxies” (Buchanan 1982) as his final salvo at his years in Blacksburg. The lure of mediocrity, Buchanan insisted, for those enamored with orthodoxy and faced with the creative and bold academic entrepreneur always will invite trouble from those unwilling to see or appreciate the necessity of “daring to be different”.

See Breit’s (1986) discussion of his recruitment to UVA and a sense of the unique intellectual atmosphere the Thomas Jefferson Center and the Department of Economics represented at the time.

From the 1956 proposals and related discussions between Buchanan and Nutter and the University of Virginia administration onward, it is evident that while they were very concerned with the growing hegemony of Samuelsonian economics (modern orthodoxy) they also insisted that their work would meet the highest standards of professional competence. Neither Buchanan nor Nutter were content to be isolated professionally and sought direct engagement with the profession at large. “Daring to be different” was the academic and scientific strategy that they thought would negotiate a course between the two paths they deemed to be undermining knowledge generation in the related, but distinct disciplines of economics and political economy.

The report is reproduced in Levy and Peart (2020), and what is astonishing to anyone who knows the history is that a claim is made that opportunities for graduates of the program will be limited because of the ideological nature of the program. The reality is that early graduate students of the Thomas Jefferson Center and students who worked directly under Buchanan were placed in academic posts at Carnegie Mellon University (Toby Davis), the California Institute of Technology (Charles Plott), Cornell (Robert Tollison), the University of Pennsylvania (Mark Pauly), and the University of California at Irvine (Richard Wagner), to name just a few. For more on the academic network of public choice, see Farvaque and Gannon (2018). In addition, many of the substantive claims made about departing faculty were in fact challenged by Nutter, who was then chairman of the department. Nevertheless, the committee was emboldened to write that the university should not allow the department to recruit any more graduates from, or adherents to, the Chicago School of Economics. That attitude eventually led to the departure of future Nobel Prize winners Buchanan and Coase, as well as AEA Distinguished Fellow Gordon Tullock.

For example, the work on the rent-seeking society; see Buchanan et al. (1980).

Henry Manne would relocate to GMU’s School of Law and bring with him his Law and Economics Center in 1986; Vernon Smith, who taught economics and law at GMU from 2001 to 2008, established the Interdisciplinary Center for Economic Science and won the Nobel Prize in economics in 2002. GMU was recognized as an R1 Institute of Higher Education in 2016. Today, GMU is Virginia’s largest public research university and enrolls more than 37,000 students.