Thoughts on economics and liberty

A call to return to first principles

After an elegant analysis of the issues involved, James Buchanan, in an essay entitled, 'The Soul of Classical Liberalism' in The Independent Review (Summer 2000), asks us to revert to first principles.

Political philosophy and public policy discourse, he argues, must be grounded in liberty, not in advancing the utilitarian benefits of liberty. True, the economic benefits of liberty are valuable in their own right, but there can be no public purpose  more important than advancing liberty. His appeal in this essay was largely addressed to professional economists for they, more than others, seem to have forgotten why political economy arose in the first place – to advance the "system of natural liberty" that Adam Smith wrote about.

Fiddling with inane equations, and jumping to paternalistic policy prescriptions, they have today often become the enemies of freedom. The Keynesians, in particular, don't seem to know what they are trying to achieve for society.

Buchanan won a Nobel prize in economics for his outstanding work in public choice theory.

His essay on classical liberalism is available here. If you have a few spare minutes, read it in full. 

===EXTRACT===

What I am suggesting is that the relevant arguments in support of particular proposals for change are those that emphasize conformity with the integrating philosophy of the liberal order, that locate the proposals in the larger context of the constitution of liberty rather than in some pragmatic utilitarian calculus. The italicized words, which served as the title of F. A. Hayek’s magnum opus, call to mind Hayek’s own behavior. To my knowledge, Hayek did not engage his intellectual enemies, whether in America, Britain, Austria, or Germany, on particular policy matters. Instead, his emphasis was always on grounding the arguments in an internally coherent philosophical position. In effect, Hayek was, from the outset, engaged in constitutional dialogue.

In establishing the Mont Pelerin Society in 1947, Hayek called for a return to first principles, for a renewed discourse in political philosophy—a discourse that would preserve and recreate what we may properly call the soul of classical liberalism. 

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