 Welcome to Free Thoughts. I'm Trevor Burris. And I'm Aaron Powell. Joining us today is Richard E. Wagner. He's the Hobart L. Harris Professor of Economics at George Mason University. He's the author of many books, the newest of which is James N. Buchanan and Liberal Political Economy. Welcome to Free Thoughts, Richard. Well, thank you for having me here, guys. I'm glad to be here. The end of the book, you have an appendix discussing James Buchanan and you in the personal relationship you had for about 50 years, correct. And you have a great little anecdote in there where you walked into Buchanan's class as a grad student at the University of Virginia and he asked you, and you describe it almost like cold calling, and Aaron and I both went to law school so we can sympathize, cold calling. He asked you, I said, Mr. Wagner, what's wrong with the American tax system? Now, I have two questions following that. One is what did you say? And two is why would he ask that? What does it say about James Buchanan's thought that that's something he would just ask a grad student in his class? Okay. On your first question, I had spent a fair amount the preceding summer reading works by Buchanan, works on public finance, works by his dissertation supervisor who subsequently I found Buchanan didn't think much of him. I think that was at Chicago, correct? Yeah, Chicago. And later I found out that Buchanan didn't like what he encountered as public finance in Chicago and wanted to create a whole different approach to public finance. Anyway, the standard public finance stuff was still standard today, pretty much a broad and tax basis, clothes, loopholes, things like this. And Buchanan asked the question. I had read these works and shot up my hand and answered what I thought was quite a good answer. And when I finished kind of had a smile to myself at how well I had done and Buchanan said, Mr. Wagner, you have no business answering a question like that because we're Democrats here, we're not autocrats. I didn't know what he meant by that time. Later I found out that what he meant was that standard public finance theory viewed governing officials as some kind of parents or lords of the manner whose job was to tend to people that whereas Buchanan regarded himself as a genuine Democrat in the sense that what he was trying to do with his work starting from day one was to ask, well, how could you, if you took seriously the idea that democracy should be a system in which people govern themselves as against being a system where some people govern others? How would you put that idealization into effect? And that was the core of his whole life's work, which I came later to realize, but at first that first day I was just stunned. What kind of person was James Buchanan? Well, on a personal level he was, you might say, in large groups. He was a fairly reserved person. Even in seminars he wouldn't say very much, but what he said was almost invariably very incisive and to the point and everyone paid attention to it. He was, I think, he had two kinds of loves in his life. One was his scholarship and the other he liked to engage in what you might call gentlemanly farming. In his time in Blacksburg he had a fair amount of property. He liked to, besides growing vegetables, picking blackberries and stuff, he liked to make wine. His blackberry wine was quite good. He also made zucchini wine and that really tasted kind of green. What was the core of, so he's the founder of Public Choice, or a founder of Public Choice, the Virginia School. What is the core of that? What makes Public Choice economics distinct from regular economics as we might think about it? This distinction comes down to the question of how do we conceive of government? We have an economic theory of markets where the core of the theory of markets explains how it is that a system of people, each of whom relates to each other within the basic principles of private property and freedom of contract, how that kind of interaction generates coherent patterns of economic activity that are beneficial to all. Then Buchanan asks the question, well, how can you inject governmental activities into that system of order? The usual presumption is that government is a kind of a planning agency that observes what is wrong about markets and acts to correct them. That's a theory that goes back to the very early 19th, excuse me, 19th century. It's going under the heading of one big branch of that's called the theory of public goods. An example being a lighthouse where the claim is that people wouldn't provide lighthouses through market processes, so government has to do that. Another big branch of that is the theory of externalities that says that market transactions can cause troubles for other people that the transactors don't take into account. That was a standard kind of theory. What Buchanan said about doing, and not just Buchanan, but some other people working with him like Ronald Kos and so forth, was to explain that that's not right, that you can get lighthouses provided through market-like transactions, you can get externality problems settled as well through market transactions. The economic literature subsequently came to display a wide variety of illustrations. Ronald Kos, for instance, explained how lighthouses were provided in the 17th and 18th century in England through a form of market transaction. Someone like Steve Chung, probably 40 years ago, illustrated how the claims of the impossibility of getting enough pollination services with bees was handled through market contracts between beekeepers in the one hand and various kinds of pasture owners on the other hand to relocate where bees are at any season. What came out of this was also, I think, a recognition that government itself is not some kind of planning entity because the sheer complexity of modern life means that no agency, no person can manage the affairs of an entire nation. Government has a decentralized market-like structure that operates under peculiar kinds of institutional arrangements. I think the ideas behind public choice was to say, well, let's just apply economic ideas to political activity and see where it goes. That was the starting point from Buchanan's work. It started off that he just wanted to develop the theory of public finance in a different way, where if you say, well, if public finance is not a subject that a public finance theorist doesn't tell a politician what would be a good act of state, but rather if the public finance theorist is simply trying to understand and explain what it is that governments do, how they do it, and why they do it. Public finance becomes a scientific activity and not a kind of a prescriptive activity. That was the basis of Buchanan's work, what his starting point was. But you have a great little analogy that I'm going to use in future lectures when I talk about public choice, but we talk about in Buchanan's public finance discussion where if you are trying to figure out the reasons why a monarch is funding, taking certain taxes or funding in certain ways, you do a basic individual choice. Why does that monarch make those choices? Maybe he really likes flowing blue gowns with their funding a bunch of indigo or whatever. That's just individual choice. If it's an oligarchy, you have to figure out how a bunch of people make decisions together. If it's a democracy or something resembling it, you have to have a whole different theory about how choices emerge from the people and the rules that they play by, which is what Buchanan was very much focused on. But it's amazing to me that that took so long to that obvious idea that there's something different about it. When you just say the government decided, it's not the same as saying Henry the Eighth decided, but a lot of times we talk like it is, as opposed to figuring out all the forces that go into the quote unquote government deciding. Why did it take so long for someone like Buchanan to come along and say, oh, you missing huge parts of what's interesting about this? I don't know. One of Buchanan's prime intellectual heroes was a Swedish economist, Newt Wixel. In 1896, he published the piece of work that Buchanan centered on in his constitutional work about the importance of unanimity at one stage. Wixel has a famous quotation in his book there to the effect that up to his time, 1896, the theory of public finance is based upon the presumption that the world is ruled by autocrats. Can I just jump in and you define public finance? We've used the term a lot, but what exactly is public finance? Public finance is the study of the economic activities of the government. That's pure and simple budgeting as well as regulating. Both how it collects money and how it spends it. Yes. I mean, and the way in which it had traditionally been studied was that this was the domain of statecraft, of rulers. The task of public finance was, among other things, to advise a ruler on what would be a good tax system or what would be the right amount to spend on this activity or that activity. The sort of tax that Buchanan took goes back to Wixel and some Italians was to say, well, governments do things for the same reason ordinary people do things. That is to say, there are politicians who have desires that they want to pursue. They face various kinds of constraints in pursuing their desires and you ought to be able to generate an explanation or an explanatory theory of public finance and that's what became public choice. There were some precedents there in a group of Italians starting in the very late 19th into the early 20th century who thought or tried to do much the same thing, but it was Buchanan really carried that forward and it became public choice. I'm sure that we talked about this before, a little bit before we started recording, but maybe some of our listeners have particularly tuned into this episode because they've heard of a book called Democracy in Chains by a woman named Nancy McLean from Duke University. You were writing this book for a while. It came out a month before Nancy McLean's book, Democracy in Chains. I'm sure you weren't planning on heading it off before it came out, but it is interesting that Nancy McLean wrote a trade book that is largely about James Buchanan and the subtitle of the book, if any listeners are not familiar with it, just to give you an idea of the flavor, the deep history of the radical right stealth plan for America. This is her task. It's nominated for a National Book Award now and there's been a lot of discussion and we'll put some links up. Do you regret giving away the stealth plan? Yeah, I know exactly. You published it beforehand. They could have just gone to your book. You don't want to ask about it because the book has contained so many errors that you almost don't want to raise it to the point that it's part of the discussion, but you said you had read the book. You felt obligated to. You knew Buchanan for 50 years. You've written much about his work. You've written books with James Buchanan. So I guess I could ask you generally what he gets wrong about it, but that would be too big of a question. Let me just ask a specific question. She claims that James Buchanan was very angered or galvanized by Brown v. Board of Education in his appreciation for decentralized education and maybe some racism, but she never comes out right and says that he's totally racist but strongly implies it and that that was a huge thing that he was going forward to try and break down democracy and to produce local control, which included the possibility of segregation. Did you ever hear James Buchanan mention Brown v. Board or like any of those goals and what he was pursuing? On a number of occasions, he and I talked that he was very much an egalitarian in his basic sentiments. He had no objection to Brown decision that he believed in decentralization in parental choice, student choice, but he did so within an orientation that in a liberal orientation of people being able to develop their talents and abilities, he had, he was certainly an opponent of segregated schools that existed at the time and I don't know where Nancy McLean got these kinds of ideas. I think as far as I can tell from reading her that she's a, she's very strongly has, you might say enlisted in a kind of a Antonio Gromsky kind of progressivist march through the institution so to speak where she, I think she sees her fundamental challenges participating in this kind of effort to undermine the traditional American institutional arrangements of limited governments, individual responsibility for one's doings, free markets, decentralized governments and so forth. I mean, she's just a very standard kind of lefty in this regard who I think with the idea of a long march through the institutions that may not be the creation of Antonio Gromsky who was an Italian communist might have been Lenin, but still the idea was that in order to set the conditions for the new collectivist way of living in modern western societies, you had to destroy a lot of kind of institutional remnants. You couldn't just have one big idea that people would embrace, but rather you had to go through and tear down a lot of the kinds of structures of living and thinking and believing to set the conditions for a new system to arise. And I think she recognized that one of the obstacles to that march has been the development of public choice theorizing that puts political figures, political institutions on the same level as everything else in society. It demystifies politics and politicians, where I think her program is very much requires some certain mystification of the political or some elevation of the political. And I think in her eyes Buchanan is really a symbol of that. I mean, she knows nothing about Buchanan's economics as a way of thinking. She says so in her book. And so for her, Buchanan is a symbol of everything that she regards as bad in modern life. And to make that symbolic point, she tells numbers of kinds of stories that aren't true in terms of Buchanan's own work, for instance. She refers to the southern agrarian David Davidson, who is a known kind of racist and so forth, because Davidson used the term Leviathan. Buchanan never cited Davidson in his work. He never talked about him with me ever. And Leviathan, of course, goes back to Thomas Hobbes. And Hobbes was a major political thinker that Buchanan... A little bit higher than David Davidson, yeah, I would say, yeah. And so is this kind of thing. Or again, another example was that her very first chapter was titled, I think, Something Like The Marks of the Master Class or something like that. And it was John C. Calhoun. And again, Buchanan never cited Calhoun. But what McLean took about Calhoun was his slave-owning characters and qualities and thought that everything about Calhoun was pro-slavery. I have no idea what Calhoun's position was on these things. But it's also notable that Calhoun was a very major political thinker. In fact, Calhoun's ideas about federalism are to some extent found within the Swiss Constitution, which is a widely recognized quite successful democracy, that as much kind of decentralization has various kinds of built in procedures by which sets of cantons can reverse national legislation. And so, which isn't exactly like Calhoun, but it's in that kind of family of how do you operate a federal system of government where one of the tendencies to be fought against is the federal government to act as a kind of a cartilizing agent that thereby the states and the federal government act as an entity through such things as federal grant programs and things like this. And the Swiss, as I have certain features of their constitutional arrangements, are very much in the spirit of Calhoun's thinking. But did you hear Buchanan ever mention Calhoun? No. But McLean, I think her actual term is intellectual load star. Buchanan's intellectual load star is John C. Calhoun, which seems to me intellectual malpractice at the very least. Oh, it's terrible intellectual malpractice, but I guess you might say that from her point of view, as an enlistee in this long march through the institutions to advance the cause of progressivism, she happened to hit upon Buchanan as symbolizing a lot of the style of thinking that supports a lot of the resistance to this progressivist march. And so I think that probably, I don't know her, but I imagine that was, why does a scholar select a certain topic for a book? Going to her title, Democracy in Chains, maybe trying to put herself in her position as much as we can. Why might someone who reads Buchanan think that he does want to constrain democracy or put it in chains? I mean, is there something in Buchanan that would actually lead someone to think that? Well, she says right up front that she doesn't understand what Buchanan is thinking, doesn't care to, made no effort to. So how she could say that? I don't know. Sure, there is a sense that of democratic government as being constrained, but that's nothing mysterious. It goes back to the simple question. How can you even talk about democracy as a system of self-governance? You have, we can imagine monarchy where we say there's a monarch, he wiggles his nose and something happens. That's the theory of monarchy. It's a theory of choice. But now we go to democracy. And the idea of democracy is that people are self-governing people. So suppose you have a small group, say 500 people, let alone 300 plus million people. Suppose you have a small group of 500 people. How can they self-govern themselves? Well, 500 people by itself is just a mob, which means those people are going to have to construct some kind of institutional or organizational arrangements. They're going to have to do things like how, what are the kinds of offices? Are there going to be committees? Are there going to be chairman? Who's going to, what procedures by which you even give a speech? 500 people can't speak at once, which means in turn that there's going to have to be some kind of office of a chairman who can recognize speakers, limit speech. These are all chains, if you want to use that term, because rules govern all interactions, rules, conventions, standards, however you want to label it. And so to talk about democracy and chains, I think does not at all reflect a serious scholarly effort, but rather reflects a certain kind of ideological effort to create an image that might resonate with readers. That's all I can think of. I think there's also a tendency, and this seems to be on display here, that the kind of progressivism, the radical progressivism that someone like Nancy McClain advocates, requires restricting democracy a fair amount in of itself, because the reason that we don't have a radically progressive country right now is because most Americans don't agree with the full platform of radical progressivism. So if you gave Americans what they wanted, we wouldn't end up with that. And that seems to be her book, and you saw this with the blow up over the influence of the Koch brothers. There was a recent long article in The Intercept by Lee Fang about how Atlas, the small international think tank down the street from us, is basically controlling all of Latin America, and that's why we don't have socialism throughout Latin America. Although it's about 40% or so. That is pretty well. Well, if Atlas were bigger. But it's this, and I think libertarians do this too, that we have this tendency to say like, the reason that our ideas are not more popular or have not been affected at a larger scale is because there's some nefarious influence behind the scenes, whether it's dark money or it's these people at the University of Virginia and George Mason really controlling things, or it's government schools indoctrinating the children, that the reason that it's, if only we cleared away the nefarious actors, the secretive cabals, our ideas would dominate and everyone would accept them, when in fact the much more likely explanation is simply like, you haven't convinced people, your ideas, they disagree with you. Maybe rightly, maybe wrongly, maybe if they have more information, they'd be more likely to agree with you. Maybe if they have more information, they'd be even less likely to agree with you. But that's where it is. And pointing at people like James Buchanan or the Cokes or the teachers unions or whoever else is just a way to deflect, I think, like maybe your own rhetorical failings or the lack of rigor in your own ideas, or simply just the fact that it's hard to convince masses of people of any particular set of ideas. No, I think that's an excellent point and I would sort of add to that, I guess my own observation in a sense that I think it's important to accept the notion that societies are to some extent inherently venues of simmering social, societal civil warfare. I mean, you hope that the warfare intensity is simmering and not boiling, but I think there's something in human nature and our interests in striving for improvement that is going to bring us in conflict with one another in various ways. And what the dimensions of that conflict are, the axes of that conflict are themselves emergent products of human imagination and invention. But who, for instance, ever walked out somewhere and found, say, 10 people with a round ball and saying, well, let's all stand here there and see how many times in 15 minutes, say, we can pass the ball up and down and see how many goals we can make. That's stupid. They're going to say, well, let's divide up into teams and contest each other. And I think that contestation is part of human nature and faction is part of human nature. This was one of the fundamental features of going back to the Federalist Papers, was recognition that faction in humanity was never something that was going to be abolished. All you can hope to do is live productively inside of it. And what economic theory fundamentally tries to explain is how it is that a social system where relationships among people are governed by those legal principles of private property and freedom of contract will tend to generate progressive, wealthy, peaceful societies. Whereas to the extent those relationships are governed by the ideas of common property, common ownership, where with common ownership it means that if I make a bad decision, things don't do well, I don't pay for it. Everyone contributes and pays for it. And so who pays for it? Taxpayers pay for it. And then to boot, if taxpayers become an increasingly shrinking part of the total electorate, you get increasingly into a world that where for many people, government is almost free. And basic economic theory would say that that's a recipe that's going to increase the intensity of the simmering. That's always going to be present in societies anyway, because I think that kind of striving for superiority for glory to use Hobbes' term is part of our natures. When we talk about James Buchanan and you mentioned previously that he would have considered himself a real Democrat, someone who deeply believed in democracy. But it was democracy warts and all, it seems to some extent that it was trying to take people and figure out what is the best way to construct the government that they want. What was he mainly trying to book like The Calculus of Consent, which is maybe the eurotext of Virginia Political Economy School with Gordon Tulloch. What is that book, for example? What is Buchanan discussing in that book? The Calculus of Consent had a couple, I think, of objectives. One simple one was to say that the American Constitution had a very coherent economic logic behind it. So you get, going back to 1885, Woodrow Wilson published Congressional Government. And in that book, Wilson excoriated the kind of American system of checks and balances and so forth, and wanted to have a streamlined kind of centralized state run by the right people. Which is always an interesting thing if you think about it, is how it is that all presidents promised up hold the Constitution to take the oath of office, and yet most of them are dedicated to subverting one form or another. You probably have to go back to Calvin Coolidge to find someone really dedicated to upholding the Constitution, but still. This was the main focus of the Calculus of Consent. We're saying that there is a sensible logic to checks and balances contrary to the whole progressivist notion that chaotic results come out of democracy. Going back to another part of the question you asked about Buchanan's very deeply felt democratic sympathies was that, again, he was deeply concerned with the normative position that people together, the activities people undertake together should be of value to all of those people. That's what he mean by self-governance. Another way of putting that idea is that people shouldn't really have the experience of being bossed in life, pushed around in life. That, sure, you might agree to work for someone under the conditions that they lay out for you and so you show up on time and so forth, but you're not really being bossed there. You've agreed to it and this kind of quality of not being bossed of self-governance, that's what led him to think, well, how then that's fine is an ideal, but how might you go about putting some institutional structure to that? Like, for instance, one of Buchanan's lifelong interest was in federalism as a form of government. The idea there is that you talk about self-governing republics, but what are the boundaries of the republic because you're talking about some boundaries that's going to cover a set of people and are those boundaries just imposed or do people create them in various ways? And so the organization of governments, the idea that you could have some activities undertaken by a national government, some by towns, is very much a part of his thinking which leads and turn into questions as to whether that kind of arrangement is going to be a highly competitive system of governance or it's going to turn out to be a cartelized system. There's a fellow at the GMU Law School, Mike Agrivi, who just, I guess not just a couple years ago now, put out a book, an important book on cartel federalism and going through the tendencies for our federal system to morph from an open competitive system into a cartel system, but this, again, was very much part of Buchanan's extreme democracy. His work on public debt is the same thing, reflects the same kind of concerns, which is a matter of how well can a democratic system handle the situations where political figures today are making decisions or judgments that will not manifest for, say, 20 years. See, within the market framework of property and contract, even at my age, I can reasonably go out and invest and say an oak grove. Even though when those trees are ready to be harvest, I might be dead and it can go to my estate, my heirs, and so thereby I will have a good reason to manage it well. But if I were in the position to be a politician, it means I have a leasehold to this force for the term of my office and when the term expires, I'm gone. So how do I manage the forest in that setting? And in the case of public debt, if you have the recognition that politicians much prefer to tell constituents what good things they can do for them rather than what cost they have to bear to receive those good things, I think you're set up for a kind of a systematic tendency towards budget deficits, which is a kind of a democratic irresponsibility. But it doesn't mean in Buchanan's estimation and his judgment that therefore you should not do things today to care of the future, but rather perhaps suggest things like if a government is going to borrow today for long-run projects, it should perhaps assign liabilities today to who's going to pay those projects in the future, just like you assign liabilities for mortgage debt, the car debt and so forth, that those debts stay with you. And so if you sell your house or your car, you have to make good on those future payments. And so it's not denying democracy, but saying how do you marry or bring responsible action into a democratic setting? I think that a good occurred to me that the famous quote, which I'm not sure where it came from originally, but democracy is two wolves and a sheep voting over what's for dinner. And so maybe you could say that some Buchanan thought is to say that he was trying to keep democracy from being that, trying to... If you did have two wolves and a sheep, what are the rules and institutions that would actually have the sheep be okay with being in the voting block with the wolves? So in this situation, the sheep could be the minority or it could be the people in the future who have to pay the debts that they're going to put down and just trying to keep it from that while keeping the legitimacy of democracy. That wolf and sheep illustration is a wonderful one. It reminds me that early 20th century fellow, Fredo Pareto, at that time there was a big discussion. It has contemporary relevance, I still discuss it, about what a good government should do to maximize social welfare. This is the standard public finance question. And Pareto responded to this controversy that had been going on and said, what do you mean by maximizing social happiness? When social happiness for the wolf requires eating the sheep while for the lamb it requires the avoidance of being eaten. And that, you know, what Pareto was doing was getting away from this idea that government was some kind of shepherd managing the flock and was questioned become how the different parts can cohere and manage themselves, which is, again, what liberal institutions of private property are really fundamental about. And so, in this case too, you know, it's a matter of, I've often thought, whether you think about the problem of public policy as a problem of herding sheep, that's the standard kind of vision, is that we have this office we call policy maker and they herd sheep and sheep just go along. Whereas if you put the problem of how do you herd cats, well, you don't. And that's raised, and that I think is the real democratic setting. If you, if it were a matter of herding sheep, we wouldn't have had a backlash against prohibition in the 1920s. We wouldn't have had the, against wars on drugs today and so forth, because people would all be sheep and do it. But it makes a huge difference if the social problem was one of dealing fruitfully with cats or with wolves and lambs and how the whole, you might say, social ecology works there. And I think the basic lessons of economics and of public choice is that social ecology works better the more so human interactions are governed by principles of private property and liberty of contract. Does this theory of democracy depend on, or I guess, demand taking a dimmer view of voters of the electorate than we tend to get from politicians and their rhetoric, that we tend to get, you know, the people are wise and then going back to the, you know, the undue influence stuff, that if only the people really got what they wanted, we would choose well, that people can see the public good, when in fact, you know, some of the stuff you described, like the, you know, the running deficits, like one of the reasons that we run deficits is the same reason that people run credit card debt, you know, that we like to spend now and we don't really want to think about how we're going to pay for it in the future, because that's not as fun as spending. And, you know, and people get all sorts of crazy ideas and sometimes those crazy ideas can spread very quickly and consume large portions of the population. Like, do we, does this theory of democracy require, to some extent, being less democratic or being more willing in the cause of making the government work to overrule or ignore the will of the people? Oh, this is a very important question that digs right into some of the core of democratic ideas and democratic theory. It goes back, as far as that goes, it goes back to the debates between the Federalists and the Anti-Federalists going back prior to the Constitutional Convention, where the Anti-Federalists gave more emphasis upon the smaller governments and upon the importance of what you might call civic virtue. Now, civic virtue within the Anti-Federalists, especially, was, I think, it's an important quality. It's something that has cultivated naturally within markets. But, for instance, within the system of private property and freedom of contract, if you buy a car on time and find your loan payments are too high and you're not willing to make them, you'll have to sell the car and walk or whatever else you might do. You can't borrow because there's a discipline because the rules of the market mean you're going to be liable for the value consequences of your actions. Now, the democratic form gets away from that by saying, well, if a government spends too much on something so it's not worthwhile, well, there's no person who's responsible. If a private business undertakes a bad project, that owner is liable for the consequences. And government, no. It's taxpayers who are liable for the consequences. Now, with respect then to civic virtue, see, there's a problem in the basic idea of equilibrium theory and economics is that any promise you make to someone about some benefit they're going to receive is going to imply a complimentary promise made about the costs they're going to have to bear. That's just a simple fact of economic theory that we have a demand side and a supply side. Now, if you look at political programs and speeches, almost all of them refer to what people are going to receive. Rarely do they refer to what they're going to have to do to make that possible. And if they do refer it all to cost, it's going to be some amorphous kind of notion of other people pay the cost. You don't pay the cost. But yet you get to even take a simple thing, a small entitlement like Herbert Hoover's old chicken in every pot kind of claim. That claim, of course, emphasizes chickens. You receive chickens. What even you don't think about there is, well, do you want to go out and work on the chicken farm to make chickens possible? But you can't have a chicken in every pot unless there are people who are working to provide those chickens. And I think civic virtue is kind of the ability to live in recognition of promises made to receive benefits simultaneously entails obligations to make those possible. I think one of the dangers in contemporary democratic politics is the severing of this duality between promise and obligation. Whereas in basic again and basic private action principles, a promise simultaneously is an obligation. And when they get into politics in a world where everyone pays the same tax, you could say that a promise is close to an obligation, everyone's in it together. But you get to a world increasingly where some people pay taxes, many people don't, or also you have various kinds of rates of tax that all these things work to weaken the duality between promise and obligation. And yet maintaining that duality is an important part that I would submit of responsible action. Did Buchanan, if we're talking about sort of how we conceive of voters within public choice theory and acknowledging that voters may not have high incentive to be very politically informed and some of the things that you kind of mentioned there, I'm sure Buchanan agreed that that was part of the limitation of voting. But did that mean he judged voters as excessively for not being informed? Was he against voting or against voters and against voter ignorance as something that made him mad? And was that the kind of, because I think that someone like Nancy McLean is very into democracy purportedly and voter education, get out the vote campaigns, you know, there's the most important civic act you can do, what would James Buchanan generally think about voting? I never asked him that particular question directly, but I certainly had a number of conversations with him. And I certainly know that he wouldn't think much about these get out the vote campaigns that these would be missing the point, which has to do with what you might call the environment within which rational responsible action is undertaken. The main thing there is that there are some kind of environments within which people act that promote responsible, clear-headed kinds of action. Again, markets are a lovely example of that. If you, whether it be you're a producer who wants to add a new location to a store you open because you think it's going to increase your net value of your firm, if you're mistaken on that judgment, you bear the consequences. In turn, that means you're going to be reasonably thoughtful and sincere in trying to make a judgment as to whether that's good or bad, because you are responsible for the value consequences of your actions. Now, when you get to collective action, governmental action, nobody individually is responsible for the actions they take. Now, what does that suggest in a world where perhaps there are some actions that need to be undertaken collectively? But many don't. You certainly don't have any need to have collectively supported health insurance, for instance. But this would suggest that the wider the range over which collective action takes place, the less the informational substance that goes into decisions are going to be made, the more fully those kinds of actions are going to be determined by people who have very high investments in the outcome of different kinds of policies, which is far removed from any kind of notion, I think, of reasonable self-governance. And all the things I get out that vote do and stuff like that is validate the kind of current system and its direction of movement. But I think just a simple comparison of the properties of a system of social organization where in the one hand, what you choose to do, you're the owner of versus the system, what you choose to do, you don't own. A simple illustration that I think all students recognize would be if a hundred people go into a restaurant and they each have to pay for their own meals, you're going to find various decisions made, but each person is going to make his or her choices based upon what he or she likes compared to what they're going to pay. Then you say, well, there's no tab for each of you. At the end of the night, I have your credit card numbers and I'll divide by the number of people in attendance. And what you're going to find is the total bill is going to be substantially higher that many people will choose to order something because they don't have to pay for it, that they might have otherwise done something cheaper. And so that's the fundamental democratic setting. And in the restaurant case, moreover, I use the example of a hundred people, each of whom pays 1% of the total bill, where in modern tax systems, our tax system as a way of charging, within the federal income tax, roughly half the taxpayers are free of tax. Now, they pay social security tax, but that kind of system nonetheless is one that breeds irresponsible conduct because people don't, for the most part, bear the value consequences of their actions. Now, I want to go to this question you write a couple of times. For example, I'm talking about Buchanan and John Maynard Keynes. So, you write Keynes's social philosophy could reasonably be described as guided or controlled liberalism in contrast to Buchanan's genuine liberalism. Now, in this question of being a genuine liberal, I'm going to go back to the McLean book and read a quote from Buchanan from an essay he wrote called Why I, too, am not a conservative. The classical liberal is necessarily vulnerable to the charge that he lacks compassion and behavior toward fellow human beings, a quality that may describe the conservative position along with others that involve paternalism on any grounds. George W. Bush's compassionate conservatism can be articulated and defended as a meaningful normative stance. The comparable term, compassionate classical liberalism, would approach oxymoronic classification. There is no halfway house here. Other persons are to be treated as natural equals deserving of equal respect and individually responsible for their actions, or they are to be treated as subordinate members of the species akin to that accorded animals who are dependent. That's Buchanan. Here's how Nancy McLean writes that quote, and then I want you to comment on what this says about both Buchanan and McLean. Coke, this is Charles Coke, or possibly Fred Coke, but Coke learned as a young adult from his mentor Baldi Harper that the great social problem of our age is that of designing the preventative medicine that will stop the eroding of liberty in the body politic. Harper warned that once the disease advanced, a bitter curative medicine is required to gain already lost liberty. James Buchanan revealed just how bitter the medicine would be. People who failed to foresee and save money for their future needs, Buchanan wrote in 2005, are to be treated as subordinate members of the species akin to dot, dot, dot animals who are dependent. So that is how McLean described what Buchanan said about people as subordinate members of the species. Now aside from the critically intellectual malpractice of how bad of them is quote, quote, why would Buchanan come along and say there is no middle ground in classical liberalism? There is no coherence to the idea of compassion at classical liberalism or liberalism, and why does that make him a genuine liberal? I don't know why Buchanan would say that. Actually, I never liked particularly much that particular essay of his. I guess I don't draw that rigid distinction between liberalism and its proper meaning and conservatism if you say that what you want to do is conserve useful workable institutions. Hayek and Edmund Burke had a lot of points in congruence with one another, actually. And I think in that respect, I often refer to Benjamin Franklin, where at the end of the Constitutional Convention, a woman was reported to have asked Franklin what kind of government did you people create? And he responded, a republic, if you can keep it. Now in that kind of response lies a recognition that the kind of system of liberty that was created doesn't automatically maintain itself. It has to be fought for and against forces of erosion just like, you know, in natural sciences there's the concept of entropy of order becoming disorderly. And at the same time, I think in societies, there's certain kinds of forces of entropy at play that a system governed by, you know, market arrangements, liberal arrangements is not something that's going to maintain itself. It's been going through a lot of erosion over the past century or so, although I think the basic support for that system still resides and still exists. What, you know, I think the quote you read from Nancy McLean is just backwards in the sense that what it illustrates is, in fact, the understandable erosion of the kinds of prudent actions that people would take to care for themselves within a market arrangement. Yes, they have been eroding and much of that erosion has taken place through the expansion of governmental activity as far as caring for people and so forth. There are whole history is full of various kinds of philanthropic organizations, mutual aid societies. There was a historian some maybe 20 years ago, David Bito, who wrote a wonderful book on mutual aid societies prior to the welfare state and how those forces were undone through the coming of the welfare state and how within realms of private charities that, you know, the basic idea, I think, of liberalism is a kind of a humane, tolerant kind of spirit, a charitable kind of spirit, are all part of, I think, the liberal orientation and attitude and that the liberal attitude, I think, is rightfully one that treats people as individuals not as instruments to be manipulated. I think they become instruments to be manipulated within the progressivist scheme of thoughts that sees people as children and wants to keep them there in tutelage or in bondage rather than seeing them as as people who have the capabilities of being fully functioned individuals. And so what she's describing is, yes, it's the expected result of the undermining of traditional liberal institutions that have taken place to this extent is going to, to the extent people come to think that I'm not going to have to pay for what I order in the restaurant but it's going to be a general charge against the government, I'm going to eat better. And but that's the problem. And then the problem is there is a problem of how do you get back or how do you restore a system of liberal governments? It's not an easy question. I don't think there is any recipe there. It's something that those of us who believe in the importance of liberty and responsible action have the the obligations and the talents to make our cases in the various best ways we can. But I would just simply remind everyone, at least it's my my social theory is that recognition should be that and goes back to Hobbes at least, is that societies are battlegrounds and that humanity is going to have divisions and that the political problem is always one of of contending for how we're going to conduct our lives. And I think that's just human nature. The German flittle theorist from the early 20th century, Carl Schmidt once posed the problem. Well, are humans dangerous creatures or not? And how you answer that question says a great deal about how you approach the problem of political economy. Buchanan approached it as they're dangerous creatures who Robert Frost had had this beautiful poem. I forget the mending wall, I think was the title. And the line when the closing line there was good fences make good neighbors. And Frost wasn't trying then to separate people, but rather saying if you knew where your boundary was, I knew where mine was, we could be fine neighbors. Whereas if that was up for grabs, then have no option but to fight. And so that's the real message of liberalism, of Buchanan's liberal political economy. And is the very much the underappreciated notion in play today is that liberal political economy liberalism is not contrary to Nancy McLean, a matter of a few rich people trying to run the world as they would see fit as public masters. But as a way of bringing everyone into a world in which they can choose the adventures and activities that they want to have with other people within the framework of market institutions of property and control. Thanks for listening. This episode of Free Thoughts was produced by Tess Terrible and Evan Banks. To learn more, visit us on the web at www.libertarianism.org.