Where do big deficits come from? James M. Buchanan had an idea.
James M. Buchanan, who died Wednesday, concluded that a government's rules often favor its own expansion. He furthered 'public choice theory,' which says that politicians and others tend to act in self-interest.
Middle Tennessee State University/AP
Why do politicians act as they do? Specifically, why do they do things that don’t seem to be in their constituents’ long-term interest, such as creating big deficits by authorizing lots of government spending without enough tax revenue to back it up?
James M. Buchanan devoted his life to trying to discover the answers to questions such as these. Mr. Buchanan, who died Wednesday, was a Nobel Prize-winning economist and leading advocate of a branch of his discipline called “public choice theory.”
Public choice theory holds that people who engage in public life, from politicians to bureaucrats to voters, behave pretty much as people do in private marketplaces. In other words, they act in narrow self-interest.
It’s an unsentimental view of politics that goes like this: Politicians want to be reelected or make their parties powerful, so they offer up pork-barrel projects and entitlement goodies without imposing tax-derived pain to pay for them. Bureaucrats want to keep their jobs, so they facilitate the process. Voters want to keep the good times rolling, so they mark their ballots for the folks who’ve let the good times roll.
Liberals complain this theory discounts the ability of people to work together for the greater political good. Libertarians, on the other hand, saw him as a rock star – someone whose academic work tended to confirm their view of the world.