Buchanan as a Classical Liberal.

• Author: Kliemt, Hartmut
• Position: James M. Buchanan - Critical essay

James M. Buchanan was a contractarian. I am not. (1) But I share Buchanan's classical-liberal ideals. (2) In my account of what I regard as Buchanan's classical-liberal views, I start with a reconstruction of the somewhat unconventional but very far-sighted way in which Buchanan intuitively made the conceptual distinction between what I call "philosophical" liberalism and "political" (or institutional) liberalism. It seems that Buchanan in his more unguarded moments intended to subscribe to both philosophical and political liberalism. Accepting that philosophical liberalism is impossible, however, I think that Buchanan should be seen as a "communitarian liberal philosopher." His philosophical use of the unanimity principle rather naturally led him to this position and the political liberalism implied by it. As an ordo- rather than an anarcholiberal, Buchanan understood that in a world without a state, all life would become "politicized." He understood that the central classical-liberal ideal of being able to live a nonpolitical life can paradoxically be brought about only-- if at all--politically and only by state institutions embodying limited government and rule of law.

Philosophical and Institutional Liberalism

In 1975, Buchanan gave a talk at the Economics Department of Virginia Tech in which he criticized Amartya Sen's account of the liberal paradox. (3) On the day before the presentation, he had sent one copy of his paper to a graduate student. From this student's desk--remember those were the days when a copy machine and a fax machine formed the pinnacle of communication technology--the draft of the paper eventually made its way to Sen, who afterward would routinely draw attention to it (though only to reject it as an important yet mistaken criticism). However, the audience at Buchanan's talk expressed the view that Buchanan had missed the boat entirely. This negative response discouraged Buchanan from publishing the paper at all. Jim commented in a personal communication to me that he just could not understand what the critics of his position were driving at. He nevertheless had the feeling that he should be cautious because everybody seemed to turn against him on this point.

With the benefit of hindsight and after a long debate, (4) I believe that Buchanan was right on political liberalism (liberal institutions) and wrong on philosophical liberalism (liberal welfare economics). (5) Because these concepts have been so frequently misunderstood, let me briefly indicate what is going on here.

Rights in Political and in Philosophical Liberalism

Buchanan made the simple point that the actors in a game can make choices regarding actions only. The choices are not choices among the outcomes of the game. The outcomes emerge. They are objects of individual evaluation and ranking, but not of individual choice making. Which of the outcomes emerges cannot be "chosen" in the proper sense by any of the actors single-handedly.

In relation to the preceding basic insight, players of the game of life can have rights to act in certain ways, but--unless they are dictators over the alternatives--they cannot have rights to control outcomes. Rather trivially, only a dictator can have full control. Yet there cannot be more than one dictator. If several individuals have the right to rank outcomes of a game, then there would need to be several dictators.

From the preceding, it is obvious that much depends on how we conceptualize "rights" (on this conceptualization, see also Sen 1970 and Gaertner, Suzumura, and Pattanaik 1992). As long as we understand rights to amount to the institutional allocation of separate sets of permissible actions from which actors may choose, there will not be any problem. Each chooses among the actions open to him or her independently, and an outcome emerges without being chosen by any actor. The exercise of actors' institutional rights is always possible, although the outcome of their separate choices may be unanimously nondesired (i.e., Pareto dominated).

Buchanan time and again insisted that what comes out of individual actions under a set of institutionalized "action rights" is--unless the actors themselves agree to do something about it--to be respected and accepted as legitimate. Beyond the individual evaluations, there is no further standard of evaluation (and what comes out of choices comes out). As a classical political liberal, Buchanan focused on individuals' institutionally fixed choice sets rather than on their preferences. Political or institutional liberalism of that kind is obviously free of conceptual paradoxes.

However, if we are speaking about liberal ways of forming or passing value judgments about which outcomes are better than others, then things change. That such judgments can coexist as judgments is obvious. Person I can say, "I like x better than y as a collective result" whereas person 2 can simultaneously say, "I like y better than x as a collective result." But it is also obvious that the contradictory preferences concerning collective outcomes cannot be realized simultaneously. Both person 1 and person 2 cannot be dictators concerning the ordering of collective outcomes.

The shift of perspective from actions (institutional or political perspective) to evaluations of the results of (separate) actions (welfare economics and evaluative ethics perspective) is highly relevant. Confusion and the air of paradox arose in the discussion of the so-called liberal paradox described earlier because Sen framed the concept of a right in terms of "local" dictatorship over collective outcomes. If you have the right to dictate outcomes rather than merely to choose actions, then different dictates from different dictators may obviously dash. Buchanan recognized that actions may coexist and that there thus was no paradox of political liberalism. But he wrongly assumed that philosophical liberalism would be possible as well.

Philosophical Liberalism Is Impossible

If we impose certain requirements on the kind and form of judgments concerning individuals' ranking of collective alternatives, then philosophical liberalism will emerge. In philosophical as opposed to political liberalism, the focus is not on institutions (and the actions they offer) anymore...