Quotes from Economics: Between Predictive Science and Moral Philosophy

By James Buchanan (1987)

• The purpose for which homo economicus was used in classical political economy was largely that of comparing the properties of alternative socioeconomic arrangements (constitutions) and not that of explaining “scientifically” (making predictions about) the behavior of economizing actors.#
  Methodology
• The scope for “free-riding” in human interaction is so ubiquitous that if men genuinely were as economic theory depicts them, no sort of ordered society, whether market-dominated or not, would be possible. In this basic sense, the very existence of an ordered society casts doubt on the homo economicus model of behavior, if used as some all-inclusive explanatory hypothesis.#
• An externality is defined to be Pareto-relevant when the extension of [another party’s] activity may be modified in such a way that the externally affected party, A, can be made better off without the acting party, B, bring made worse off. That is to say, “gains from trade” characterize the Pareto-relevant externality, trade that takes the form of some change in the activity of B as his part of the bargain.#
  Economics
• So long as the process of economic growth and development serves to increase the opportunity costs arising from failure of individuals to act privately more than it serves to increase the private cost of the activity itself, there will surely be some tendency for the independent or private adjustment equilibrium to shift toward the social optimum in the process, “optimum” being defined by the standard Paretian criteria. The external economies become less relevant as the society becomes more affluent. At some point in the process of development, these may become irrelevant, and, if they do, the activity should be returned to private organization providing it has been previously collectivized.#
  Economics
• As people get richer, they need to rely less and less on their neighbors to cooperate in securing the indivisible benefits of possible joint activities, but they may need to rely more and more on some collective mechanism to prevent themselves, and their neighbors, from imposing mutually undesirable costs on each other. In its broadest sense, “congestion” replaces “cooperation” as the underlying motive force behind collective action.#
  Economics
• In a real sense, Western societies have attained universal suffrage only after popular democracy has disappeared. The electorate, the ultimate sovereign, must, to an extent not dreamed of by democracy’s philosophers, be content to choose its leaders.#
  HistoryPolitics
• Ultimately, of course, discussion must reduce to values, but when it does so it is done. If the indolent scholar relies on an appeal to values at the outset, his role in genuine discussion is, almost by definition, eliminated.#
  Methodology
• If there is, in fact, no relationship between income and wealth levels and the evaluations that individuals place on public goods, almost all of the institutions on general taxation must produce serious distortion in the allocation of economic resources.#
  PoliticsEconomics

Gordon Tullock, The Politics of Bureaucracy (1965)

• It is not from the benevolence of the bureaucrat that we expect our research grant or our welfare check, but out of his regard to his own, not the public interest.#
  Politics