The Yin and the Yang of the History of Economics

In his Psychological Types of 1920 Carl Jung asks,

Who does not know those taciturn, impenetrable, often shy creatures, who form such a vivid contrast to those open sociable, serene maybe, or at least friendly characters, who are on good terms with all the world? (p 413)

With this rhetorical question Jung launches his seminal dichotomisation of personality into Introverts and Extroverts; a dichotomy that is perhaps the most successful of all of such polarities, and one that has long been part of common usage.

Yet Jung’s conception of the antithesis is much more than the commonplace contrast between the gregarious and the reclusive. In Jung’s analysis the antithesis is at bottom about two contrary relations between the Subject and the Object. To put the difference in a single sentence: the Extrovert ‘discharges’ energy upon the Object, while Introvert draws charge from the Object. Thus, to use his illustration, the extrovert sees that the weather is freezing, and puts on a coat to go outside. The introvert sees that the weather is freezing, and - fired up by the resolution that he must harden himself - goes outside without a coat. The extravert dislikes cold weather and so battles it; the introvert dislikes cold weather and soaks it up. The extrovert acts in way that directly corresponds to objective conditions; while the introvert’s acts in an indirect, and seemingly less effective, relation to objective conditions.

What makes Jung’s analysis so interesting to the student of economics is that he applies it to thought as well as action. Jung maintains, in other words, that from the different orientation of the two types to ‘the without’ there arises an extrovert ‘cognitive style’ (as we would say today) distinct from the introvert cognitive style.

The difference in the cognitive styles is partly manifested in the more obvious social aspects of the intellectual existence. The extravert thinker, says Jung, ‘begins to publish very early, becomes rapidly famous ... He cultivates personal relationships ... [and] takes an unusual interest in the development of his pupils’. The introvert, in contrast, feels a ‘distaste for teaching’, and because of his ‘absolute need to stand without error or blemish in the public eye ...  his style is loaded and complicated by all sorts of accessories’. His melancholy fate is often a misanthropic isolation.

But Jung also pursues the more truly intellectual biases of Extroverts and Introvert thinking. His position on these might be best brought out in reviewing his procession of examples. 

In keeping with the fundamental importance he attached to the antithesis, Jung traces manifestations of the dichotomy back to the beginning of Western thought: Plato, he surmises, was an introvert, while Diogenes was an extravert. Plato’s disregard of the external world as mere ‘shadow’ is obviously introverted, and the hard-bitten ‘here and nowness’ of Cynicism seems extrovert in its heed of externals.

Jung deems Christian theology to be richly illustrating of the impact the extravert/introvert dichotomy has on doctrine. Jung identifies the Ebionite tendency in Christology – that Jesus was human, and any divinity an illusion – as extravert; the Docetist tendency - that Jesus was divine, and any humanity an illusion – is introvert. Perhaps the most piquant of Jung’s contrasts is between two Church Fathers: Tertullian and Origen.  Origen is pure extrovert: all that “extensive journeying ... constantly surrounded by pupils and a whole host of stenographers who gathered up the precious words  that fall from the revered masters lips”. Tertullian’s polemical posture, by contrast, is pure introvert: as introvert does not necessarily mean ‘quiet’, and to Jung’s mind ‘affect-explosions’ (wonderful phrase!) are telltale give-away of introversion.  But Jung clinches the difference by reference to the two men’s modes of Christian sacrifice. Origen, notoriously, sacrificed his body: Tertullian sacrificed his mind. ‘To believe because it is absurd’: this was Tertullian’s notorious maxim, and in holding it he was making a perfect sacrifice of mind. Of course, it is mind (inward) rather than body (outward) that would constitute sacrifice to an introvert.

By obvious reasoning the Nominalist metaphysicians of the middle ages are judged by Jung to be introverts, while the Realists were extrovert. Luther was extrovert, and Zwingli introvert: the doctrine of the Real Presence that Luther maintained was a characteristically extrovert example of concretising the abstract; while Zwingli’s symbolic interpretation was introvert example of abstractising the concrete.

The contrast does not fade with the secularisation of thought. Darwin, Jung says, was extrovert: all that omnivorous roaming around the whole realm of knowledge. Kant was introvert. Humphry Davy, the rock-star showman of the laboratory was evidently extrovert; and Faraday, the oddball seer of the invisible physical world, was Introvert.  Georges Cuvier was  extrovert, and Friedrich Nietzsche introvert.

Jung, regrettably, never used economics to illustrate the contrast. Can one successfully identify the dichotomy among the famous economists?  Let me try.

Of the classical economists Adam Smith (1723-1791) is plainly an introvert; and David Hume (1711-1776) an extrovert. The allocation is so obvious from their characters that it hardly craves justification. But notice that Hume’s flamboyant aphorism that ‘reason is the slave of passion’ distinctly correlates with Jung’s contention that extroversion inclines to make thinking the slave of feeling (Jung’s words); since thinking impedes feeling, and so obstructs that discharge of ‘psychic energy’ on the object.  

Of the Ricardians, J.S Mill would seem fall into the introvert category on account of his aloofness from the common herd, while the uninhibited sociality of Jeremy Bentham (1748-1832), David Ricardo (1772-1823) and T.R. Malthus (1766-1832) seem fairly definitely extroverted.

The neoclassical economists H.H. Gossen (1810-1858), W.S. Jevons (1835-1882) and Vilfredo Pareto (1851-1923) are definite candidates for introversion. Jevon’s copious and earnest diary keeping is a dead give-way; while Pareto’s mysteriousness and misanthropy encourage the same diagnosis. Gossen’s ‘broad’ interests (painter, insurance salesman, musicologist, civil servant ....)  by Jungian  criterion would suggest extroversion. But his acute mental solitude suggests the reverse:  not to mention a literary style was so ‘tortuous that even Germans have trouble reading it’’ (falseMeijer and Vogel 2000).

Other neoclassical seem to provide some pairs of opposites.  Knut Wicksell (1851-1926) and Phillip Wicksteed (1844-1927) were doctrinal allies who occupied opposite positions psychologically . Wicksell’s gauche manners, drastic religious fluctuations, and clumsy public stands contrasts with Wicksteed’s ‘extraordinarily broad range of scholarly and theological explorations’, his longtime dedication to adult education,  and his dextrous forays into public life.

Another contrast of neoclassical economists well illustrates the cognitive implications of the dichotomy. I refer to  the two combatants of capital theory: John Bates Clark (1847-1938) and Eugen Böhm-Bawerk (1851-1914). On one side Clark, ‘simple and childlike" (in the words of one eulogist); and on the other Böhm-Bawerk,  president of the Austrian Academy of Science, a  member House of Peers,  ambassador to Germany, and three times Minister for Finance. His pedagogical texts are fluent, persuasive and very much directed to ‘without’, be it Clark, Marx or the literally one hundred other authors he took on. By contrast Clark’s ‘students would often try to induce him to accept or refute Böhm-Bawerk's theory of the dependence of the interest rate on the undervaluation of the future. Clark would merely re- state ... his own productivity theory of interest’. (Jonson 1938). This quote is so starkly illustrative of Jung’s contention of the defective self-absorption of introvert teaching that Jung could have well added it to his own store of instances.

But there is another more intellectually significant contrast between Clark and Böhm-Bawerk; one that concerns their relative aptitude, and incapacity, for ‘theory’ and ‘parable’  Böhm-Bawerk was talented at presenting parables, but never managed to articulate his notions in abstract theory. With Clarke it was the reverse; his thought reclines in cloudy abstraction and never condenses on the concretely illustration. Clark, of course, had a doctrinal aversion to thinking of capital in terms of a concrete array of pick and shovels etc, and was father of the ‘neoclassical aggregate production function’; Böhm-Bawerk’s theory of ‘roundaboutness’ was brought to life by a suite of stories about woodcutters, fishermen, etc.  This contrast seems to manifest a difference emphasised by Jung: that extroverts are given to ‘concretising’ the abstract, while introverts are attached to abstracting from the concrete.

In the 20^th c Keynes flagrant personality obviously conflicts with the secretive and enigmatic Marshall: the first flinging aphorisms and essays at the public; the second devoting his prime of life to clot, from his bathchair, the pages of his Principles with ever more footnotes and qualifications.  From about the same period (see Coleman, Cornish and Hagger 2006) a similar contrast can be drawn from the antipodes:  between the blatant D.B Copland and the remote and massive L.F. Giblin. (Copland’s periodic collapses corresponds well with Jung’s contention that extroverts are susceptible to ‘hysteria’). It was perhaps not accidental that it was a protogé of Giblin – Arthur Smithies – who perceived that J.A. Schumpeter (another diarist) was an essentially solitary figure.  ‘No one was invited to share Schumpeter’s intellectual life’, Smithies observes. ‘He made his intellectual journeys alone’. Smithies added, ‘To explain his personality I am convinced we have to go back to his earliest childhood and recall that he spent most of his first 10 years as the only son of a young widowed mother’. The only son of a young widowed mother?  Precisely Adam Smith’s predicament ...

In the post-War generation Milton Friedman is obviously extrovert; all that globe-trotting, the high media profile, the sunny demeanour. Ronald Coase serves to illustrate the introvert; the sheer individuality of his contribution, his oblique exposition of his ideas, the vinegary presentation, the overall maverick aspect.    

But what in summary is the difference in cognitive style? The above would suggest that the essence of introvert thinking is a hankering after the abstract, while the extrovert embraces concrete. But Jung declares in rebuttal,

Extroverted thinking, therefore, need not necessarily be concretistic thinking – it may equally well be ideal thinking, if, for instance it can be shown  that the ideas with which it is engaged are to a great extent browed from without and transmitted by tradition and education

‘From without’ : there lies what critically distinguishes extrovert style from introvert style . And to Jung the key application of this critical distinction is in Judgement, the great end of thinking.

‘whether or not thinking is extroverted hangs directly upon the question: by which standard is its judgement governed ... from without , or is its origin subjective?’  (p 429)

The upshot, therefore, is that the essence of extrovert cognitive style is a favour of public (‘scientific’) methods of evaluation.  Introvert cognitive style inclines to appeal to intuition and insight in methods of evaluation.

Not surprisingly, Jung sees dangers in both tendencies pushed to far. Jung believed extrovert intellectual products risk yielding a ‘stale and hollow positivism’. To add to the indictment he suggests extroversion risks transforming reason into sophistry; morality into Pharisaism; religion into superstition; and intuition into ‘mere personal subtlety’. But at the same time Jung complains that the introvert forgets the point of thinking, and ‘creates theories for the sake of theories’.

Jung expresses the failings of both styles in parody: whereas the Extrovert argues ‘It is therefore it is’, the Introvert argues ‘I think therefore I think’.

Jung seems even handed in judging the two cognitive styles, is uninterested in awarding a superiority to one or the other, and at various points presses their complementarity; extrovert style lends ‘breadth’, while the introvert lends ‘depth’.

Perhaps the greatest contribution of Jung’s notion is not to award victory to one style, or to secure a bland peacemaking between the two, but to heighten our consciousness of the dependence of the apparently logical on the psychological, and thereby foster a intellectual scepticism in both ourselves and others.

                    

References

Coleman, William 2007, ’Arthur Smithies’, Biographical Dictionary of Australian and New Zealand Economists, J. King ed, Edward Elgar, U.K.

Coleman, William, Selwyn Cornish and Alf Hagger 2006, Giblin’s Platoon: The Trials and Triumph of the Economist in Australian Public Life ¸ANU EPress, Canberra, http://epress.anu.edu.au/gp/pdf/gp_whole.pdf

Jung, C.G., 1924 (1920),  Psychological Types,  London.

Meijer, Gerrit and Richard F.A. Vogel 2000, "The fate of new ideas: Hermann Heinrich Gossen, his life, work and influence", Journal of Economic Studies, 27 (4/5), 416 – 420.

Johnson, Alvin 1938, ‘Memorial to John Bates Clark, 1847-1938’ American Economic Review, 28(2), 427-2.

Should We Believe in Anything?

Thurman Wesley Arnold (1891 – 1969) is perhaps best remembered as a trust-buster of FDR. He was also a lucid advocate and theorist of the presuppositions of the New Deal. In his The Folklore of Capitalism of 1937 he ventured to observe a change of mental temperament over the preceding generation:

‘Thirty years ago medical men were still fighting for principle, just as political men are fighting it today. There was homeopathic and allopathic schools of medicine. The thinking man was supposed to choose  between two schools in hiring a physician. Today the public is no longer asked to choose between conflicting medical principles. Medicine has been taken over by men of skill rather than men of principle’.

In 1967 Daniel Villey (1910-1968), a mid-20^th c French classical liberal, lamented the same change in his A la Recherche d'une Doctrine Economique:

‘Until a recent period ... economists were men of doctrine. One did not distinguish among them so much as today by means of the techniques they use, or even by the particular field they had chosen to specialise in  – but according to their doctrines... He was an agrarian or an industrialiser. Or a liberal, or a socialist, or a corporatist, or a cooperationist, or a dirigiste. In the eyes of ... the public, economics had as its end a great contest, continually reborn, in which the partisans of laissez-faire  confronted those of intervention. It was no less in other disciplines. Was he classic or romantic? Monarchist or republican, conservative or progressive, nationalist or cosmopolitan? Times have changed. As for economists, who today cares to carry the label socialist or liberal? Our day disdains, deprecates , condemns doctrine.’

Thus the shift that was a cause for chagrin to Villey was a cause for deep satisfaction to Arnold. The two authors, then, provide an eloquent statement of perfectly contrary positions on the value of doctrine.

Arnold’s position is rooted in that coalition of egalitarianism and technocracy that was so nourishing of Dewyite pragmatism and American ‘institutionalism’, and so manifest in the New Deal.     

To Arnold the great defect of ‘principles’ – the stuff of ‘doctrine’ – was epistemological. They offend that untrammeled empiricism which can be the only source of knowledge in human affairs.And principles - being abstractions - do not respect that  intimate union of politics, economics, law anthropology etc that will characterise any given social phenomenon. Arnold's case against principles this far is a familiar one. And arguable. For the 'mind of principles' believes they have absorbed the lessons Experience has to teach, and sees no call to return to her class room each and every day. And the 'mind of principles' Experience cannot teach why and how the machine works: it must be taken to pieces in the imagination.

Arnold's case against principles extend to normative ones. Such principles infringe the root and branch utilitarianism that appears to be Arnold’s sole guide to action. Making things worse, normative principles commonly contradict one another, and so only add to the difficulty of implementing ‘practical’ solutions. The upshot was that the 'method of principles' corners radicals in a struggle for an impossible Utopia, paralyses conservatives with Ideology (in Mannheim’s sense), and leaves economists and lawyers ‘preaching’ rather than giving ‘practical advice’.

In Arnold’s telling, socially useful ends are secured only by those who reject ideals and principles. He proposes to illustrate this by reference to Jewish money lenders who usefully subverted the ban of medieval canons on lending at interest. A second of Arnold’s example is the propagation of quinine: the medical faculty at Sorbonne proscribed its use in 1638, ostensibly on account of its inconsistency with Galenic doctrine, and its effective introduction to France had to await the activities of the ‘quack’ Robert Talbot in 1680.

Arnold’s supreme illustration of the utility of scorning all ideals and principles is the 20^th c US urban ‘political machine’. This exists, he says 'because people ... do not wish the government to be practical’.  The upshot is that ‘thrifty, moral communities have a tendency to remain in the backwoods while a city like Chicago astonishes us with both its civic improvement and its political corruption.’ 

In summary, ‘the great achievements in human organisation have been accomplished by unscrupulous men who have violated most of the principles we cherish’, and Arnold commends ‘opportunistic action ... based not upon learning but upon political expediency’

Our Arnoldian journey concludes, therefore, in a Mandevillian universe of moral paradox  ....the vision of the beautiful infrastructure built upon the base foundation...  the praise of the political fixer ...: all this is reminiscent of the Enlightenment immoralist.  

If immorality and dishonesty are some compensation for  principles, would it  be not still better if principles were to disappear altogether? Arnold deems this an idle query. Humankind is addicted to principles; partly because of a (regrettable) attachment  to ‘rational thinking’, and even more because  ‘almost all human conduct is symbolic’; ie it is not purely instrumental to material, utilitarian goals. ‘Society is generally more interested in ... watching itself go by in a whole series of different uniforms than it is in practical objectives’. But while  there is no hope that this will alter, we may still hope for the advent of doctrines that give confidence and morale to a community, and ‘provide a faith which permit men to do practical and humanitarian things’. Doctrine, then, is potentially a useful myth, or in Arnold’s favoured comparison, ‘religion’; and we should judge any doctrine not by its ‘truth’ or ‘falsehood’ (Arnold’s sneer quotes) but by its utility.

As Arnold’s technocracy undergirds his repudiation of doctrine, soVilley’s liberalism sustains his affirmation of doctrine.

To Villey the point doctrine is to articulate a perspective on the human world. Doctrine, therefore, is not a denial of the ‘intermingling’ of so many different factors in social world (economic, legal, political ...) but a inevitable response to that complexity.

And as the choice of perspective is personal, doctrine is essentially personal. How could one separate Nietzscheanism from Neitzsche, asks Villey? One could ask the same of Marx or Hayek.  Or Samuelson.That ‘personal’ characteristic  is precious attribute of doctrine; our choice  of doctrine is an expression of our freedom; and like all such expressions, it is an expression of ourselves; it helps thou ‘know thyself’; it fulfils us.

Villey vision of doctrine, then, is an essentially artistic one. Doctrine is closer to literature than either the sciences or religion. Unlike both science and religion it essentially personal, even private, rather than collective. Unlike both science and religion, doctrine is characterised by a relativism that hovers between objectivity and subjectivity.  Many different doctrinal perspectives, says Villey, are equally true. They do not merely each contain a part of truth, each is a part of truth.  The term ‘perspective’ is usefully illustrative of Villey's meaning here. Taken literally, any vista is surely as valid as any another, as each is equally the outcome of the observer and the observed.

This relativism of doctrine is concomitant with its essential union with values. Doctrine, says Villey, is  ‘to secure the unity of mind and heart’. So if the output of science is prediction and control’ the output of doctrine is valuation.  If science begins in curiosity and ends in solutions, doctrine begins perplexity and ends in counsel. This counsel is what Arnold dismisses as ‘preaching’, but it is the ultimate end of doctrine.What Arnold completely misses, then, is the forks in the road of life; of the necessity to nominate one alternative over the other. To Arnold it seems there is only one road; and it has a  good direction, and a bad; and we can only wish for some power to move us along that good direction. But life, obviously, is not like that. Perhaps a medical treatment has the risk of severe side effects; even death. Do you take it? Perhaps the patient is a ward of yours (a child, a senile parent); do you administer it?  The answer cannot be found in any ‘technique of human organisation’, or skill, that Arnold so prizes. The answer lies in doctrine.


Will an adjudication, then, award all  to Villey? I do not think so. The relativism of Villey's notion of doctrine quavers precariously on the edge of subjectivism. All perspectives are equally valid, suggestsVilley, and the literal visual usage of the term is corroborating. But, to pursue that usage, are not some vistas more comprehending than others? And if  it is replied that doctrine cannot reach a perfectly general outlook, but must remain in some measure personal, where lies the cognitive value of that personal aspect? Perspectives express our selves, suggest Villey. But if they only express our selves, are they anything more than 'personal style'? There is surely more 'news' in doctrine than that. But news of what? News of ourselves. Philosophers - in Villey's account-  have sought to understand the world, but have only succeeded in understanding of themselves. 

Language Rules for Liberals No. 1

Classical liberals should take care to avoid some bad habits in usage.

Never use 'public' to denote 'government', or 'private' to denote 'non-government'.

Thus it should always be,

'government school' not 'public school',
'government transport' not 'public transport',
'government funding' not 'public funding',
and
'government policy' and never 'public policy'!


What to do with 'private company' and 'public company'? I think 'personal company' would do for 'private company'. A 'public company' is obviously not describable as a 'government company'. I can't think of anything better than 'open company', but 'universal company' might be better.

'Public' in fact is an unhelpful word, generally, as it is obscure in its reference, and is used to fig-leaf state involvement. Doesn't 'public library' sound better than 'government library'? Would you like to take a dip in the 'government pool'?

'Community' is a useful substitute for public. 'Community opinion' can do for 'public opinion', and 'community transport' for 'public transport' which is not solely a government enterprise. And 'community corporation' would be better than 'public corporation' in referring to a corporate body genuinely independent of the state. Similarly, 'community library' and 'community pool'.One might use 'community good' for 'public good', but 'universal good' is perhaps still better.

A single philosophy divided by a common word

To the classical liberal the current American usage of the word ‘liberal’ is a thing of pain. Any initiative to increase government spending is, of course, ‘liberal’; any expansion in government regulation of the economy is by the same usage ‘liberal’. In Capitalism and Freedom Friedman insisted on using ‘liberal’ as a classical liberal would. To no avail: the American usage that originated in the 1930s is stuck fast.

I am not concerned to persuade anyone to use the word ‘liberal’ as I should use it. But I do want to understand usages. My point here is that in the term ‘liberalism’ comprehends three different references.

‘Liberalism’ as an historical episode Historians use the term to describe polities originating in a reformist enlightenment project of post-ancient regime societies of 19th c Europe. This program was, politically, to establish a constitutional, national, parliamentary and impersonal state; economically, to abolish the mercantilist legacy of the early modern state, and any vestiges of medieval constraints on trade; and socially, to remove religion from public life.

Liberalism in this usage is more of an ‘event’, or episode, than a ‘thing’. It is  more of an effect, than a cause, even though the effect, like an explosion, has serious effects itself. This 'liberalism' is singular and unique; and once gone, gone forever. The usage is obviously natural for historians, but frustrating to intellectual historians, since no great intellectual coherence can be expected from these episodes, being a matter of political equilibration rather than exercises in thought. ‘Liberal Italy’ ( from say1865 to 1922) was not terribly liberal.

‘Liberalism’ as a social philosophy  Liberalism here is something that ‘grows’ or ‘develops’, rather than ‘happens’. Obviously, any social philosophy has a history itself, composed of event-like objects (as ‘logical positivism’ as an event in the history of positivism). And neither is outside political history. Thus, liberalism as a social philosophy may have originated,  as Hayek believed, in a reaction to royal absolutism in 17th c Britain. But unlike 'liberalism as a historical episode'  liberalism as social  philosophy is dealing with questions that are almost outside history. A theory of fire may be dead and buried, but its reference is enduring.

‘Liberalism’ as a species of society This is liberalism as sociological phenomenon; a society of a particular nature. It is the type of society where the individual is the basic unit of society (as Daniel Bell puts it). This society is undeniably located "in history"; it is obviously tied up with the modern Europe. Benjamin Constant was capturing this in contrasting the Modern Liberty (of the individual) with the Ancient Liberty (of the polis). When more precisely, it began is a matter of disagreement; Oakeshott saw its germination in late medieval Italy; Rawls in the Reformation; Bell in the 17th century.

But unlike ‘liberalism as historical episode’ it is more like ‘state of matter’ than an event. So one might contend that England' ancien regime concluded in 1649, or one might mount the case for 1832; but no one sees any  profit in dating the year of Britain's commencement as a liberal society. Unlike a ‘liberal age’ or ‘liberal philosophy’, 'liberal society' exists as a matter of degree. Societies are more or less liberal. There will  always some degree of accommodation of liberal values; some pocket where they may be strong even in the face of illiberal sway in other parts. Historically, the economy is, of course, where liberal society is strongest.

This matter of degree is best not seen as a matter of content. There is "legacy liberalism", such as Australian Federalism; something bequeathed by an earlier period, but with which current society has no sympathy for. The degree  of liberalism, then, is best measured resilience of liberalism in the presence of shocks, and growth in their absence. This growth and resilience is fostered by the support of other social dynamics support it; when liberalism manages to engulf, or at least permeate, the domains of polity and community.

Which brings us back to the United States. It is - for better or ill – a deeply liberal society. Everyone in the United States is a liberal in the classical liberal sense, no more so than those oh-so-conservative Tea Partiers (which, recall, keep away from the one thing that might have diistinguished them from classical liberals - social policy). Socialism is an extinct fauna in the American ecosphere; and even the left that survives has never been tied at the hip to labourism, as it has in the rest of the anglosphere. The state is utterly liberalized;  more democratised, federalized, constitutionalised, checked and balanced, sunset-claused, porous, transparent – and less possessed of agency – than any other state. And that, I suspect, has allowed the word ‘liberal’ to seep over to favour a prerogative in state action that in less liberal societies would be rightly deemed an offence to liberalism.

James M. Buchanan, 1919-2013

James Buchanan, the 2006 Noble Laureate in economics, was born in rural Tennessee, and lived most of his life in the American South. His paternal grandfather had been a Confederate cavalryman who, with Populist support, went on to be a Democratic governor of Tennessee. Buchanan later recalled his boyhood spent reading ‘in grandfather’s attic piled high with radical pamphlets of the 1890s  ... The robber barons were real to me’. By that time the Buchanan family was living in ‘genteel poverty’ in ‘a huge house…in varying states of disrepair’. Young James was expected to re-win the lustre of the family name. But in the approach of world war he was drafted into US Naval Reserve Officers Training Program, where he experienced the ‘blatant discrimination against Southerners, Westerners and Mid-westerners’ that radicalised him against the ‘eastern establishment’. He graduated 6 out of 600, and learned that ‘even unwashed rednecks of Appalachia could stand to measure with scions of Newport’.  One such ‘scion of Newport’ of the same Program was John F Kennedy.  To Buchanan’s mind, Kennedy’s triumph in 1960 was no more than the ‘raw injustice’ of ‘a purchased presidency’.

Buchanan was allocated to the staff of Admiral Nimitz, and there acquired a loathing of the grand-standing of General Macarthur. In July of 1945 he received an instruction to arrange for the USS Minneapolis to pick up ‘a special cargo’. Puzzled by this unusual order, he made out the dispatch nonetheless. Earlier, while on his leave in his home state, he had heard rumours of the Oak Ridge plutonium plant, but only after the Hiroshima bombing, did he realise how he had been one tiny cog in the mechanism of nuclear destruction.

Upon demobilisation, he enrolled in economics at University of Chicago. He saw himself as a ‘liberal socialist, but within was weeks he was a free market advocate. His world view was completed by his study leave in Italy 1955, that acquainted him with the pathologies of the Italian state, and pitiless realism of Italian thinkers towards it. The upshot was an outlook on the relation between government and the economy that was at odds with that of most mid-20^th century economists.  They were trustful of government custody of economic management, but wary of democratic pressures on that. Buchanan reversed that position; he distrustful of government and hopeful of democracy. Whereas the standard view saw government as benevolent and competent, in Buchanan’s ‘Public Choice’ position government is no more benevolent than any business. Worse, it was typically a sole provider of its services, and so was best analysed as a monopoly. He argued that this interpretation of government implied that even ‘good policy’ would be for  the ill; as ‘good policy’ simply allowed the goose to be plucked less painfully, and so plucked the more fully.

Whereas in the standard view democracy was the articulation of a ‘general will’ by majoritarian institutions, to Buchanan democracy was a system of competitive political markets. Parliament is a market place - a political market place - where exchange between political constituencies takes. In his classic co-authored work of 1962, The Calculus of Consent ,  he argued that a political system consisting of single chamber making decisions by 50 percent plus one basis could not amount to a process of political exchange. If a reliable majority was secured that would amount to a political monopoly, and consequently constraints should be imposed on such majorities. This was not undemocratic since such constraints would be approved consensually before the political contest began. Buchanan’s analogy was with a game of cards; before the cards are dealt all players agree to the rules that will make the game work. These rules are the constitution, and constitution is essential to healthy democratic politics. Strongly under the sway of US constitutional tradition, Buchanan was seeking to retell the wisdom of his country’s founding fathers to their 20^th c descendents.

Buchanan’s confidence in the US political system faltered in the tumult of 1960s, that included bombing of the office of his head of department at UCLA. He saw the spread of ‘constitutional chaos’ underwritten by an unholy alliance of Democrats and Republicans to repeal the ‘unwritten’ prohibition of budget deficits. The fall of the Berlin Wall 1991 brought him little sense of triumph; socialism is dead, he said, but ‘Leviathan lives on’. And while the economists who had that supplied the matter for his ‘economic theory of politics’ were no longer beholden to myth of the benevolent state, they were no longer beholden to anything: they were ’ideological eunuchs’, engrossed in make-believe world of pure theory, that he compared to science fantasy. Of the economics of the last generation, he said ‘I am reminded’ of J. K. Tolkien, ‘who through sheer power of imagination created a whole new world of beings, the hobbit world, in his trilogy, The Lord of the Rings. The analogy is revealing when we recall that Tolkien was writing fairy tales for children.’

Buchanan had the greatness that allowed him to fruitfully cultivate his contradictions; the wish debunk political romance with an attraction to  that of his own;  a readiness to deploy scientific method while maintaining a philosophic texture of mind; to be both alienated from his country and and to love it; to deny all the gods and to give thanks to them.