Buchanan’s lasting lesson
By John Long
I was very sorry to hear of the death last week of Nobel Prize-winning economist James Buchanan of Blacksburg. Frequent readers might recall I discussed this fascinating man in a couple of columns last summer. He was not only an accomplished scholar, but was also perhaps the last veteran of Adm.Chester Nimitz’s staff in World War II.
Long is a Roanoke Times columnist and director of the Salem Museum.
January 17, 2013 - 12:04 AM
It’s good to see Mr. Long making some progress, and I emphasize the word some, in recognizing that capitalism isn’t all good. He says, “The answer is no one, and all of us. In a free market, these decisions are made by an “invisible hand” that generally works, without guidance, for the good of all participants.” Note his inclusion of the word ‘generally’.
This is a small first step in recognizing that individual rational choices for the individual may end up having a social detriment to people generally. Think of air pollution for example. It’s rational to drive everywhere for the individual. But when we all do it, smog gets worse.
He still needs to turn that critical eye towards corporations. He should begin by looking at relationships instead of titles.
For example, Mr. Long writes, “But, you might object, we’d all be better off. Bran flakes are better for us all than those hyper-sweetened, pastel-colored marshmallow clovers. Perhaps. But how much freedom to choose do we sacrifice to have the government make this call for us?”
We need to bear in mind someone, although in this case, not the government, DOES make that choice for us. There are bureaucrats in corporations that decide, based on sales figures, what cereal choices to offer and at what price. These bureaucrats have the same function that those in the government play. So why does Mr. Long take the government to task but not corporations?
One of the comment ‘selling points’ for capitalism is it’s ‘efficiency’. Note that in offering a number of choices of breakfast cereal, the manufacturers don’t have any idea which ones consumer will prefer so they offer many types that eventually fail. Think of the waste involved. This isn’t efficient at all. Start a new cereal, make new boxes, ship product and if it doesn’t sell, throw it in the landfill and start again.
I know many will say consumer surveys can be done, etc., but note this is also available to government decision makers. If the corporations can have focus groups, so can those in government. There is nothing inherently more efficient in capitalism than central planning.
Finally, Mr. Long concludes with, “As government expands, and it seems for the moment most Americans want it to keep expanding, it can only mean surrendering more of our private choices to a cadre of administrators whose human nature dictates that they will follow their own interests, not ours.”
But change the word government to corporation and you see the same applies. If we’re going to be critical of government expansion, we need to be equally critical of private corporations. After all, these private corporations are following their interests, not ours. These are private choices by a cadre of administrators. You don’t get to tell them what to do. You don’t get to vote them in or out.
For my conclusion, I see Mr. Long is making progress but still has a long way to go. I applaud the effort and look forward to future analysis. I sincerely hope his next article will be as critical of private enterprise as he is of public enterprise.