The Role of the Economist in Public Choice: Buchanan and Samuels/Schmid

There are both similarities and differences in the view of James Buchanan and Warren Samuels/Al Schmid on the issue of how economists should act in the policy and public choice arena.

James Buchanan
Buchanan defines the science of political economy as, "its purpose is to evaluate the structure of the constraints, the law, with some ultimate objective of redesign or reform aimed at sec using enhanced efficiency in the exploration of potentially mutuality of advantage".

In 1964, James Buchanan wrote "What Should economists do" in the Southern Economic Journal.  He wrote that, "man's behavior in the market relationship, these are the proper subject for the economists study" (pg. 214, 1964, SEJ).  He was very clear that economists should study the market relationship and not resource allocation.  The reason for this distinction is Buchanan does not want to privilege the idea of "society" over the "individual".  He goes on to criticize the utilitarians as well for trying to sum up personal utilities and creating a social aggregate.

In another piece, Buchanan wrote that the political economist can remain neutral or in a positive stance when exploring changes in rules or institutions.  In the Buchanan view, the political economist explores changes in rules that will have mutual gains from aide and that are proposed as hypotheses.  These mutual gains from trade stated as hypotheses must then meet the real test of unanimous consent form all the parties in that jurisdiction to be confirmed.

Buchanan believes that the economist should not interfere with individual decision making and that individuals are all that is real not social aggregates of any kind. He further believes tat economics should focus on exchange as opposed to choice or resource allocation.  While he talks about the need for a positive political economy, he also holds very strong views about the nature of the criteria upon which that should be built.

Warren Samuels and Al Schmid (SS)

Samuels and Schmid have some similarities and differences with Buchanan in terms of the role of the economist.  They both seek to portray specific role in a positive context that does not involve weighing in on one side or the other.  That said, there are some important differences as well.

A long quote from Schmid's 1987 book Property, Power and Public Choice is helpful here:

To conclude, there is nothing in this chapter that should be interpreted as being against the calculation of specific efficiency when objectives of the individual chooser are made explicit. For the most part, the chapter is an argument against presumptive choices among conflicting interests contained in theories and calculations of global efficiency. Whenever there is conflict of interest, to speak of global efficiency is to make a value judgment weighting the interests of one party over another. The plea of this chapter is for the speaker to make explicit the weighting expressing his or her own value judgment or that of the client being served. Inquiry into which institution/right is better can be clarified by asking, "Better for whom?" Each must apply his or her own answer. This chapter is an argument against the high priest role of economic analysis but not an argument for or against a different set of values than those presumed in neo-classical theory of any other. Much still can be done in predicting the substantive consequences of alternative property rights for the various parties.

SS also, like Buchanan, want the economist to explore institutional alternatives without engaging in using their own values.  One major difference is that they do buy into the idea that groups and social aggregates do matter and can be assessed. Another major difference is that they don't believe that individuals and individuals are all that matter.  A more nuanced difference is that institutions or rules are constraints for some and opportunities or freedom for others in the SS view.  Buchanan views rules as merely constraints for all.  Because of this correlatively in the SS world view, the economist cannot judge institutions simply on the basis of efficiency or freedom. Buchanan would only judge institutions on the basis that they expand exchange opportunities in markets and how they could constrain political processes.  SS would assess these market and political rules on how they shape "whose interests count" under various options.

The end result is that economists role is viewed differently by different traditions in terms of policy and public choice.  The standard neoclassical view is that economists can identify market failures and then suggest policy options on the basis of Paerto efficiency.  Historically, distributional issuers off the table because they came at the cost of efficiency.  The Buchanan view is that the economist studies exchange processes and seeks to find rules and systems that maximize individual freedom for voluntary cooperation and political rules that constrain collective behavior.  Rules should be judged on their efficiency or instrumental value and he emphasized that economists should always seek unanimity on changes in rules.  Finally, SS view public choice as a question of evaluating the performance of alternative institutions.  In this way, they wish to avoid privileging any specific performance criteria by focus specifically on the distributional consequences of alternative rules.