James M. Buchanan: The Chicago and Virginia years

In his acceptance speech for the Nobel Prize in Economic Science in 1986, James M. Buchanan expressed his indebtedness to Knut Wicksell, the Swedish economist. This paper argues that Buchanan’s discovery of Wicksell’s individualistic micro economic approach occurred during Buchanan’s time at the University of Chicago in the interim after completing his Ph.D. and prior to assuming his first position. We argue that a critical part of Wicksell’s contribution was to expose Buchanan to the writings of the Italian public finance theorists of the late 19th and early 20th century.  It is the science of the Italian public finance theorists that formed the foundation for Buchanan’s intellectual enterprise leading to Public Choice and the Virginia school of political economy. 

The paper deals with Buchanan’s formative years in Tennessee, education, time as a naval officer, and his studies and intellectual growth at the University of Chicago (1946-1949) after his military service in World War II.  Important is the influence of Frank H. Knight (1885-1972) on Buchanan’s scientific work and Buchanan’s intellectual encounter with Knut Wicksell (1851–1926) and Antonio De Viti De Marco (1858-1943).   We examine the cumulative effects of Knight’s personal and professional influence on Buchanan’s scientific enterprise in subsequent periods resulting from his writings, correspondence and personal visits to the Thomas Jefferson Center at the University of Virginia.   

Also dealt with is Buchanan’s time (1957-66) at the Department of Economics at the University of Virginia and the Thomas Jefferson Center for Studies in Political Economy and Social Philosophy.  The focus is on Buchanan’s interaction with five economists at the University of Virginia: D. Rutledge Vining, G. Warren Nutter, Ronald H. Coase, Gordon Tullock, and Francesco Forte.  Reasons why the “Calculus of Consensus” became the foundation upon which the public choice school was erected are also addressed.

The staunch rejection of the TJC’s grant proposal to the Ford Foundation caused a combination of factors based on allegations of ideological prejudice by Buchanan, Nutter, Tullock, and Coase, the negative judgment by the Self Study Report of the Administration of the University of Virginia (1963), and the UVA Administration’s refusal to promote Tullock to full professor in the Economics Department.  This created a hostile intellectual environment which induced Coase and Buchanan to leave UVA. 

Finally, we focus on Buchanan’s move to UCLA in 1968-69 and conclude by examining the consequences of the intellectual reaction to the revolution experienced by Buchanan and Forte.