This is one of a series of posts that will ask what the most pertinent question raised by a prominent influencer of political economy might have been, and what the relevance of that question might be today. There is a list of all posts in the series at the end of each entry. The origin of this series is noted here.
After the first two posts in this series, the topics have been chosen by me, and this is one of those. This series has been produced using what I describe as directed AI searches to establish positions with which I agree, followed by final editing before publication.
This post appears to be particularly relevant in light of another piece I have written this morning on the collapse of democracy, free speech, and the rise of the far right.
The James Buchanan Question
James Buchanan is less well known to the general public than Hayek or Friedman, but his influence on modern politics has been profound — and dangerous. A Nobel laureate in economics, he pioneered what he called public choice theory.
At first glance, this sounds innocuous: it applies economic reasoning to politics.
In practice, it became a doctrine that treated democratic governments not as expressions of collective will, but as threats to individual liberty — especially the liberty of property owners.
Buchanan argued that politicians are self-interested, voters are irrational, and bureaucrats are rent-seekers. The solution, he claimed, was to shackle democracy itself. Constitutions, fiscal rules, super-majority requirements, and balanced budget mandates were all designed to tie the hands of elected governments, preventing them from responding to the demands of ordinary citizens.
His ideas became intellectual weapons for the American right, the Koch network, the Tufton Street organisations and so-called think-tanks, and beyond. They were deployed to portray democracy as a danger to freedom, because the majority might vote to tax the rich or expand social programmes.
Which brings us to the Buchanan Question: if economics is redesigned to protect the wealthy minority from the democratic majority, how can democracy itself survive?
1. Public choice and its poisoned well
Public choice theory claimed to strip away the “romance” of politics. Politicians were self-serving, voters were irrational, and interest groups were greedy. Democracy, in this view, could never be trusted to deliver wise decisions.
However, it is essential to note the asymmetry in all this. Buchanan applied suspicion only to governments and citizens, and never to capital or corporations. Business leaders were assumed to be efficient and productive. Voters demanding schools, healthcare, or fair wages were painted as parasitic. Public choice was not a neutral analysis. It was a political project dressed as economics.
2. Democracy as a threat to wealth
Buchanan's central fear was “taxation by the majority.” If the poor outnumbered the rich, they might vote to redistribute wealth. His answer was to build constitutional barriers against democracy, inclduing balanced budget requirements, narratives around limits on taxes, and in the US, supermajority requirements for spending, as well as independent central banks to control the actions of government.
Each of these devices weakened the ability of elected governments to act. The effect was to insulate wealth from democratic challenge. Buchanan's economics was not about efficiency; it was about class defence.
3. The neoliberal use of Buchanan
These ideas were seized upon by the American right. Charles Koch funded entire university departments to spread Buchanan's gospel.
Think tanks translated his theory into policy.
Legislators rewrote state constitutions in the US South to embed fiscal straightjackets, making it impossible to raise taxes or expand services even when voters demanded them.
The pattern is familiar worldwide. In Europe, fiscal rules and balanced-budget treaties limit democratic choice.
In the UK, Treasury orthodoxy imposes arbitrary debt targets.
Everywhere, unelected technocrats are empowered while parliaments are sidelined. Buchanan's fingerprints are on all of it.
4. The hollowing of democracy
The consequences are corrosive.
Citizens are told their vote cannot change economic fundamentals.
Parties campaign on transformation but govern with the same fiscal straightjacket.
People experience democracy as impotent, and disillusionment deepens.
Into that vacuum step populists who promise to smash the system, but often only entrench oligarchy further.
By treating democracy as the problem, Buchanan helped turn it into one. If citizens feel the ballot box cannot deliver justice, they will eventually turn against democracy itself.
5. Why Buchanan matters now
The Buchanan Question matters because his project is not history. It is alive in every fiscal rule that forbids public investment, in every demand that governments “cannot afford” public services, and in every treaty that locks in austerity.
Buchanan gave the wealthy a shield against democracy. He designed economics not to explain the world but to restrain it; to bind majorities and protect minorities of wealth. It is no accident that his work was championed by those who stood to gain most from a politics that neutralised democracy.
6. What answering Buchanan requires
If we are to answer the Buchanan Question, we must reject his premise. Democracy is not a danger to be constrained; it is the foundation of legitimacy. That means:
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Dismantling fiscal straightjackets. Debt and deficit limits that ignore real needs must go. Elected governments must be free to use fiscal capacity to meet public purpose.
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Exposing the class bias of “neutral” rules. Balanced budgets are not neutral economics — they are political choices to favour wealth.
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Re-empowering citizens. Taxation and spending must be recognised as democratic tools for shaping society, not as dangerous concessions to be restrained.
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Naming the ideology. Public choice theory was never neutral. It was designed to delegitimise collective action. We must say so openly.
Inference
The Buchanan Question is stark. If we allow economics to be weaponised to defend wealth against democracy, democracy cannot survive. The point of public choice theory was not to understand politics but to disable it.
Answering Buchanan means reclaiming democracy from the constraints he designed. It means affirming that collective needs — health, education, care, climate action — are legitimate, and that governments must have the tools to deliver them.
Buchanan asked how the wealthy minority could protect itself from the democratic majority. Our answer must be the reverse: how can the democratic majority protect itself from the wealthy minority?
Previous posts in this series
- The economic questions
- Economic questions: The Henry Ford Question
- Economic questions: The Mark Carney Question
- Economics questions: The Keynes question
- Economics questions: The Karl Marx question
- Economic questions: The Hayek question
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Point 2: class defence? Sounds more like class warfare to me. Buchanan sounds more dangerous than Friedman; as you say, this isn’t economic belief in markets, it’s political. I shouldn’t be shocked, but I am, to hear of such a systematic project, propagated in universities, which the right keeps telling us are too liberal…. I need a cup of tea, that’s what kept Britain going against Hitler, isn’t it?
Yes, it probably did.
Loving the economic questions series
Thanks
A fair summary, I’d say. For an eye-opener into all the consequences of Buchanan’s work, I strongly recommend Democracy in Chains by Nancy McLean.
It draws the line linking US racism, the Kochs and Mercers, even Charlie Kirk’s Turning Point. Throw in the CIA in Chile, Thatcher and Alan Walters, Reagan. It serves as a reminder that Matthew Eliot’s (yes, the Brexit man) wife Sarah is (was?) an employee of the Heritage Foundation.
The website of the Cato Institute is another resource for the legacy of Buchanan if you have the stomach.
My companion book for Democracy in Chains is Peter Geoghegan’s Democracy for Sale. It’s lost a little over time by being overtaken by “unthinkable” events, but still useful.
To add: these “potted philosophies” are really interesting, and helpful in following the development of economic theories, thank you – for this work in particular.
The Nancy McLean should be high on anyone’s reading list
His entire life was a lie. He was a hyporicte almost from the start.
He argued for balanced budgets etc, how would the USA have beatend both the Nazis and the Japanese – with a balanced budget? He was a beneficiary of the G.I. Bill = state money for education – apparently bad. The prize from some Swedish bank in memory of Alfie Noble is irrelevant – it lends the Noble gloss to a fraud.
And he never look up from theory to see how the real world functioned. Pathetic man.
Why can anyone love an AI generated answer. They can do it themselves. Or maybe they can’t.
Would you now how to ask the question?
Would you know why to ask the question?
Could you edit the answer to make sure it made sense?
No?
I thought not.
Of all the Neo-lib bullshit out there, Buchanan’s is the probably the worst – it is riven with hypocrisy.
Consider how Trump’s lot bang on about being heard and then close down dissent aimed at their ideas.
That is Buchanan’s hypocrisy right there. It is also typically fascist – it gets it refutations and accusations in first, implying victimhood. It is nothing but conspiracy theory masquerading as theory. Read ‘Democracy in Chains’.
Buchanan is to politics like acid is to flesh.
I know you are a fan of his
That is NOT funny Richard.
Well OK, it is. We might as well have a laugh as we go down the plug hole.
WOW!
I’ve never heard of this man. I have now. Thank you.
This is an excellent series.
This morning Graham said in another post “I can’t remember a more depressing time in politics.”
It is tempting to expect the worst but there is hope. The list of villains are powerful but they have a weakness. They are selfish and put their interests first and will be in competition with each other. Conspiracy theories assume that the magic circle propose and everyone falls in line. Co-ordinating lots of operations and is difficult even if there is direct control. Ambitious, selfish people probably won’t just take orders as the theories say. Also age and infirmity ensures a turnover of people.
One example from history is the Third Reich which produced some good weapons but the teams did not cooperate seeking the favour of the Fuhrer or his inner circle. Consequently many of them were deployed too late or took resources which could have been better spent.
The Allies co-ordinated. It often meant furious rows even between George Marshall who ran the war for FRD and Alan Brooke Churchill’s Chief of Imperial General Staff. Brooke said much of his time was taken up with talking Churchill out of ‘madcap’ ideas. But Churchill never overruled him. Basically the cooperation worked.
It worked because they could hold a common aim in view above personal ambition.
I would say evil will often trip itself up.I hold out hope.
I hope you are right.
Never heard of Buchanan before and only had a vague understanding of some of the others in the series.
Really useful series
Many Thanks.
Thanks
Buchanan is a big name among US conservative institutions. Much of the tea party was organised around his ideas. Instead of the tea party being the special interest, public choice theory says it is the teachers, the unions, the politicians etc. All these operate for their “own self interest”, but for some weird reason the tea party does not. Funny that.
Yuk!
I didn’t know about him. I do now.
YUK!
I wish I didn’t know about it, but I’m glad you told me.
Rachel Reeves will soon have to raise the VAT on pitchforks to at least 1,000%.
🙂
Great piece. Thanks. A real eye opener.
Never heard of this bloke before.
Whatever- it explains a lot about how we got to where we are now.
I was aware of Buchanan. Some while back I came across this: https://www.ineteconomics.org/perspectives/blog/meet-the-economist-behind-the-one-percents-stealth-takeover-of-america
It’s a while since I read it, but I found it both interesting and alarming.
At a slight tangent, I also found this new article in the Guardian interesting, on the impact of economic inequality on brain development in children. In particular, it notes that children of all economic strata are affected, so inequality is bad for you even if you’re wealthy. https://www.theguardian.com/science/2025/sep/30/study-links-greater-inequality-to-structural-changes-in-childrens-brains
Nancy Mclean’s ‘Democracy in Chains’ is the best read on him.