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Nobel Prize for Economics

November 20, 1986

My former teacher and friend, James McGill Buchanan, hardly needs me to come to his defense. I feel obliged, however, to respond to the letters (Nov. 11) about him, for they strongly suggest that, in general, people do not have any understanding whatsoever about the discipline called "economics" and that this misunderstanding may in part be due to simplistic reporting on the part of the media.

In the first place, this year's Nobel prize was well deserved by Prof. Buchanan. He has spent the better part of the past 40 years fighting the accepted orthodoxy that tells us that government behaves, by and large, like a super individual. Thus, the Keynesian policy of "tax and tax, spend and spend, elect and elect." While we might know that politicians act in their own self-interest, to develop theories that point this out and also make economic sense within the orthodox view is quite another thing.

In the second place, the reports about this year's Nobel award were much too simplistic and they seem to show that the media too has little, if any, real understanding of what economics is all about.

Economics examines how scarce resources are allocated. What Prof. Buchanan has done is to show us how government affects this allocation of resources and how various voting rules used by parliaments can lead to an inefficient allocation of our scarce resources.

Finally, when the history of economic thought is written for this century, I believe many will be surprised when much of the space is dedicated to James McGill Buchanan, for he is, perhaps, the only economist in this half century who has expanded the frontiers of knowledge.



Biles is E.C. Reid Professor of Economics at California State College Bakersfield.

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