2 - James Buchanan and the Return to an Economics of Natural Equals

Summary

A central question for Buchanan was whether the social world is characterized by natural differences, as Plato argued, or natural equals, as Smith posited. Smith’s characterization of the fundamental equality of people in terms of street porter and philosopher is a commonplace in Buchanan’s writings. This issue speaks to how social goals are determined. The chapter includes the initial exchange of letters between Rawls and Buchanan beginning when Rawls wrote to Buchanan and Tullock after discovering Calculus of Consent. Rawls pointed out that Calculus makes an implicit egalitarian assumption – one that would preoccupy Buchanan over the rest of his life. Buchanan compared Rawls’s Theory of Justice with Smith’s work in two essays separated by nearly thirty years. In the first (in 1975), Buchanan dealt with the stereotyped reading of Smith in which Smith supported the masters of mankind who everywhere and always collude to maintain low wages; Buchanan argued that Smith and Rawls were closer than one might think. In the second essay (in 2004), new Smith scholarship allowed Buchanan to refine the theme of natural equals and to demonstrate the fundamental equivalence of their theories.