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JAMES M. BUCHANAN, CHICAGO, AND POST-WAR PUBLIC FINANCE

Published online by Cambridge University Press:  04 November 2014

Marianne Johnson
Marianne Johnson*
Affiliation:
Professor of Economics, University of Wisconsin Oshkosh. Email: johnsonm@uwosh.edu.
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Abstract

This paper examines James Buchanan’s earliest writings within the context of post-WWII public finance theory and his education at Chicago. Public choice scholars have long recognized their ties to Chicago, but few have examined Chicago’s role in serving as the primordial soup for Buchanan’s later work in public choice. Thus, we know very little about the subdiscipline of public finance at Chicago and its institutional and intellectual traditions in the immediate post-war period. As the influence of Frank Knight, price theory, and catallactics on Buchanan have been well explored, the focus here is on Buchanan’s graduate training in public finance, the departmental emphasis on product differentiation of ideas, and the general acceptance in ‘Old Chicago School’ economics of the importance of institutions and institutional design. I find that while he maintained a high degree of intellectual affinity with Chicago economics generally, Buchanan broke decisively with orthodox public finance (including that taught at Chicago) on several substantive issues early in his career, including the importance of expenditure theory and the relevance of the benefit principle and voluntary exchange.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 36 , Issue 4 , December 2014 , pp. 479 - 497
Copyright
Copyright © The History of Economics Society 2014 

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