- The Washington Times - Monday, April 17, 2006

WHY I, TOO, AM NOT A CONSERVATIVE: The Normative Vision of Classical Liberalism

By James M. Buchanan, Edward Elgar, $75, 118 pages

I find the book title and content of “Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism” intriguing yet commonsensical. James Buchanan worries about divisive rule-by-majority roiling American politics today, about politics as a ceaseless campaign between liberals (usually toned down to “progressives” or “moderates”) on one side and conservatives on the other, with both groups fighting over total annual government spending of some $4 trillion, with jarring taxes, politics and regulatory activity ever draining liberty.

But there is a kind of third social force at work in which some call themselves “libertarians,” such as those at the Cato Institute and Mises Institute, and others who call themselves “classical liberals.”

As you might gather from the subtitle, Mr. Buchanan, the 1986 winner of the Nobel prize in economics and founder with Gordon Tullock of public choice theory, counts himself as a classical liberal. Mr. Buchanan says he adapted his book title from a postscript that Friedrich Hayek, himself a Nobel economist (1974), tacked on his 1960 work “The Constitution of Liberty” The postcript was entitled “Why I Am Not a Conservative.” No wonder there’s a lot on Hayek in this volume including telling comment on his bestseller “The Road to Serfdom” (1944), and his final work “The Fatal Conceit” (1988).

In fact, Mr. Buchanan hails Hayek’s impact on political and economic insight as the “Hayek difference.” For Hayek saw the comprehensive market process as a nexus of dynamic relationships among countless decision-makers involving literally every producer and consumer, a vast ever-shifting “catallaxy,” central to productivity and any constitution of liberty.

Hayek said broad immediate knowledge of the economy is unique, fast-moving, sensed by market participants themselves. He saw them as socially responsible, as forging a “marvel” — his word — as the market self-adjusts and self-directs itself. For example, producers tend to produce more when prices go up while consumers tend to consume less — and vice versa when prices fall.

A social marvel? You bet. Yet not so marvelous as Congress talks up “excess profits” taxes on oil and natural gas firms now gaining from a price of some $60 per barrel of oil. Wouldn’t such taxes be socially irresponsible, hurting exploration and discovery of new energy sources for consumers and driving up prices further?

Which makes the case for public choice theory all the more relevant. What the authors do is to apply the same gain-oriented or self-interest drives of the marketplace to collective decision-making of government.

Government here is widely viewed as not just legislators, judges, bureaucrats and generals, etc. on the “inside,” but voters, lobbyists, consultants, lawyers, political science professors and others on the “outside.” So the public choice school sees not only “market failures” such as Enron but “government failures” in the ways that FEMA responded to Hurricane Katrina.

One should ask: Which poses the greater danger to liberty — the largely voluntary spontaneous behavior of the market or the largely compulsory politicized behavior of government? For his part, Mr. Buchanan supplies a sharp chapter titled “Madison’s Angels” headed by James Madison’s observation in “The Federalist Papers”: “If angels were to govern men, neither external nor internal controls on government would be necessary. In forming a government which is to be administered by men over men, the great difficulty is this: You must first enable government to control the governed; and in the next place oblige it to control itself.”

No wonder Mr. Buchanan winds up his incisive book with a normative sighting of economics as a moral science. He grants that skullduggery is hardly unknown in both public and private sectors, and that economics is indeed amoral in the sense that it focuses on the behavior of participants as is, not as it should be. He has fun kidding President Clinton for immortalizing the ambiguity of the word “is.” Ambiguity often becomes, whether by happenstance or design, a tool of trade for wily legislators, bureaucrats, judges, lawyers and special interest purveyers of all stripes. So politics becomes heady spin, spin, spin.

Yet James Buchanan sees economics bearing moral strictures: that a person who enters into a voluntary exchange with another is predisposed to assume the goods offered are not fraudulent, that promises will be kept, that contracts will be honored — all keys to moral equality. So he hails thinkers such as Adam Smith, Thomas Jefferson and James Madison whom he says are “moral equalitarians.” Morality an economic norm? Why not?

William H. Peterson is a faculty member at the Mises Institute and adjunct fellow at the Heritage Foundation.

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