A bottle of Jack Daniels is sitting on our kitchen counter, the result of a fire in our microwave oven. The oven was desstroyed so we ordered a replacement, which was supposed to be installed a few days ago, but the installers who showed up couldn’t get the new oven into the spot where the old one had come out. We will have to wait for better installers. Meanwhile, the new oven sits on our kitchen floor, and Jack Daniels sits on the counter.

The installers removed the contents of the cabinets above the microwave, which included that bottle of Jack Daniels that we’ve had a long time. Years ago, when Jim Buchanan last came to Tallahassee to give a series of lectures at Florida State University, we had him over for dinner at our house, and knowing that Jim enjoys a bit of whiskey before dinner, we bought that bottle of Jack Daniels specifically for him. We don’t drink too much hard liquor in our house, so it is still here, half-full or half-empty, depending on how you look at it.

One of the things Jim wanted to do when he was in Tallahassee was visit his old friend and former colleague Marshall Colberg. Jim taught at Florida State in the mid-1950s with Marshall, and (a bit of Buchanan trivia) co-authored his first book with Marshall. I’ve heard more than one person say that Buchanan’s first book was his Public Principles of Public Debt, published in 1958, but in fact his first book was Prices, Income, and Public Policy: The ABC’s of Economics, an introductory textbook co-authored with Clark Lee Allen and Marshall Colberg, published in 1954. Allen, Buchanan, and Colberg, the ABC’s of economics. Get it?

When Jim visited, Marshall was in poor health and living in a nursing home. I drove Jim to see Marshall, and it was touching to see two old friends talking. Jim said to Marshall, “We really started something here at Florida State,” sharing credit with Marshall for starting the public choice revolution for which Jim won his Nobel Prize. You can see the public choice orientation in The ABC’s of Economics, as you can in all of Jim’s work.

Marshall passed away a few months after Jim had visited. That was Jim’s last visit to Tallahassee and I was trying to figure out when it was that he came. I was able to find out, thanks to Google, that Marshall passed away in August of 2000, so it must have been in early 2000 that Jim came to town, and that we bought that bottle of Jack Daniels for him. Google seems to know all. I’ve heard this thing about six degrees of separation, which I’m not sure I fully understand, but the father of Eric Schmidt, chairman of Google, was Wilson Schmidt. Wilson Schmidt (1927-1981) was chairman of the economics department at Virginia Tech when Jim Buchanan moved there to start the Center for Study of Public Choice, and Schmidt was one of my professors when I was a graduate student. That’s my connection, and Jim’s connection, with Google.

Buchanan’s academic work takes a process-oriented approach to economic analysis. He’s said that the subject matter of economics should be exchange, not maximization, though that comment probably means more to economists than to others. His book Cost and Choice emphasizes the subjective nature of cost, and as in much of his work, seems closely related to the approach to economics taken by the Austrian school. I won’t get into a debate about how “Austrian” Buchanan was — he never claimed an affiliation with the Austrian school — but when you read his work, you can see a relationship.

Buchanan’s work on constitutional economics emphasized constitutional rules as being generally accepted, rather than written in some constitutional document. As an example, his criticism of deficit financing emphasized that prior to the 1960s there was a general agreement that governments should balance their budgets during normal times, which was undone by the widespread acceptance of Keynesian economics. That is an example of a rule that had emerged, through general agreement, even though it was not written in the constitutional document. Buchanan often argued that now that the rule was being violated, the Constitution of the United States should be amended to explicitly include it.

That idea is very consistent with Friedrich Hayek’s notion of a spontaneous order, in which order and efficiency can emerge “as a result of human action, but not of human design.” I love that phrase! Hayek didn’t coin it. It was first used by Scottish philosopher Adam Ferguson (1723-1816), but it was popularized by Hayek. This idea of the effectiveness of spontaneous orders — the results of human action but not of human design — is one of the most important lessons of economics, which we don’t emphasize nearly enough. We don’t need to have some central plan to get good results; the unplanned results of a spontaneous order are often better than anything that could be planned out ahead of time, even though those results cannot be foreseen.

A great example that illustrates this is language. Language was not designed by anyone. Language emerged as a result of human action but not of human design. Who invented adverbs? Nobody. They are the result of human action but not of human design. Another example is money. Nobody invented money. It emerged as a result of human action but not of human design. Some goods were naturally more acceptable in barter exchange than others, so people became more willing to accept them as a medium of exchange even if they had no use for the goods. They could easily trade them away to someone else, and money emerged as the most tradable of all commodities. Precious metals often filled that role, but what, exactly, emerged as money varied from society to society. Another great example is the market economy. Capitalism is a spontaneous order that evolved as the result of human action but not of human design. Nobody planned it out. Starting with simple barter, over time trading became increasingly sophisticated and emerged into modern capitalism, as a result of human action but not of human design.

I like that phrase, “the result of human action but not of human design,” enough that when my children were young I taught them a trick. When economist friends would come over to the house, I would ask them, “Who invented money?” They would respond, “Nobody invented money. It is the result of human action, but not of human design.” Many of my economist friends have been amused with that trick. I am not sure my children actually understood what the phrase meant, but they could repeat it.

When my teacher Jim Buchanan was last in Tallahassee and was coming over to my house for dinner, I was trying to instruct my children to be on their best behavior for Mr. Buchanan, and one of them said to me, “Dad, when Mr. Buchanan is here, don’t ask us who invented money!”

In immediate response to the Newtown massacre, every pundit began pointing fingers and giving their answers. The problem was gun culture. No, the problem was feminism. Violent video games. Insufficient funding for programs for the mentally ill. Hollywood. Rightwing paranoia. And so on.

Now, I have my own views about the cultural conditions in America that coincide with our high levels of violence. I think both liberal and conservative commentators probably make some good points along the way. I think the most conspicuous problem is the glorification not of guns or fictional violence, but of actual violence. America is a militarized society, seat of the world’s empire. The U.S. government is always at war with a handful of countries. We glorify killing and dying in our patriotic parades. Our Nobel Peace Prize winning president has bombed Iraq, Afghanistan, Pakistan, Somalia, Yemen, and Libya. The fact that Tim McVeigh was a Gulf War veteran who saw his mass killing in military terms was lost on those who attempted to blame the Oklahoma Ctiy bombing on talk radio.

I think there are many cultural phenomena that have contributed to mass shootings and American violence, from militarism to public schools and the welfare state. And of course, most such shootings occur in “gun-free” zones where security has been socialized and has failed.

But there is no panacea, and I wish this was something acknowledged before people began pointing fingers. It might very well be that in a society culturally and politically oriented in the way I’d want, there’d still be the occasional atrocity. No perfect solution exists. And although there have been more school shootings in the last couple decades than before, the data set is still far too small to draw solid conclusions.

At least as alarming as the finger pointing have been the particular solutions most commentators have immediately gravitated toward. Progressives immediately began accusing conservatives of cutting mental health funding, and conservatives immediately fired back that civil libertarians have eroded the capacity of government to involuntarily commit those suspected of mental illness. This is, I think, perhaps the most disturbing reaction in the long run. Great strides have been made in the last half century to roll back the totalitarianism of mandatory psychiatric commitment. For much of modern history, hundreds of thousands were denied basic human rights due to their unusual behavior, most of it peaceful in itself. Lobotomies and sterilization were common, as were locking people into hellish psychiatric gulags where they were repeatedly medicated against their will, stripped of any sanity they previously had. The most heroic libertarian in recent years may have been the recently departed Thomas Szasz, who stood against mainstream psychiatry’s unholy alliance with the state, correctly pointing out that the system of mandatory treatment was as evil and authoritarian as anything we might find in the prison system or welfare state.

In particular, those with Asperger’s were immediately singled out as potential threats in the wake of Newtown. This was especially disgusting scapegoating to behold. Such people, along with the vast majority of those deemed “mentally ill,” are no more a threat to society or other people than anyone else is. There is simply no way—no way—for a free society to weed out the dangerous based on “mental illness” and force them into treatment, and there is no reason to think this will stop the next mass killing. Every single high school in America has an eccentric who, if he ended up killing a bunch of people, everyone would say, “Yes, we knew he was dangerous.” Yet 99.9999% of these people will never harm anyone. More coercive psychiatric treatment is a recipe to destroy what liberty there is left in this country.

Meanwhile, statists on both the left and right called for the national security state to put armed guards in every school in America. More militarized policing is not the answer. Barbara Boxer, California’s hyper-statist Democrat, called for National Guard troops in the schools. Yet the spokesman of the NRA, instead of doing what it could to diffuse the hysteria and defend the right to bear arms, added his voice to this completely terrible idea, demanding utopian solutions and scapegoating when he should have been a voice of reason. The main difference between his proposal and Boxer’s would be the uniforms worn by the armed guards.

Government armed guards will not necessarily make the schools safer, though. Central planning doesn’t work. The Fort Hood shooter managed to kill twelve people in 2009, despite the military base epitomizing the very pinnacle of government security. And now we see President Obama toying with the exact proposal aggressively pushed by the NRA—more surveillance and police, funded by the federal government, to turn America’s schools into Orwellian nightmares.

Although both conservatives and progressives have responded to this tragedy in generally bad ways, and there seems to be wide agreement on a host of downright terrifying police state proposals, I don’t want to imply that both sides have been equally bad. As awful as the law-and-order conservatives have been, the progressives have been far worse, agreeing with most of the bad conservative proposals but then adding their own pet issue to the agenda: disarming the general population.

The right to bear arms is a human rights issue, a property rights issue, a personal safety issue. The way that one mass murderer has been turned into a poster boy for the agenda of depriving millions of Americans of the right to own weapons that virtually none of them will ever use to commit a crime is disgusting, and seems to be rooted in some sort of cultural bigotry. Nothing else would easily explain the invincible resistance to logical arguments such as: rifles are rarely used in crimes, gun control empowers the police state over the weak, and such laws simply do not work against criminals, full stop. Rifles are easier to manufacture than methamphetamine, and we know how well the drug war has stopped its proliferation, and 3D printing will soon make it impossible to stop people from getting the weapons they want.

I will be doing some more writing about gun rights in the next few weeks, as it appears that not for the first time in my life, I was totally wrong about something. I had suspected that the left had given up on this issue, more or less, and Obama—whose first term was overall half-decent on gun rights—would not want to touch it. We shall see what happens, but it appears that the progressives have been lying in wait for an excuse to disarm Americans and have happily jumped on the chance.

Many left-liberals will claim they don’t want to ban all guns, and I think most are honest when they say so. Polls indicate that 75% or so of Americans oppose a handgun ban. Maybe there has been some genuine improvement on this issue, although I do have my doubts about the honesty of those who claim they would stop at rifles and high capacity mags, which are implicated in a handful of crimes compared to the thousands killed by people using handguns.

In any event, the core mentality of the gun controllers is as dangerous as ever. In response to a horrific mass murder of around 30 people, they are calling for liberties to be sacrificed in the name of security, apparently impervious to the logical problems with their proposals. When terrorists murdered a hundred times as many people in September 2001, many of these same progressives sensibly pointed out that those who would sacrifice liberty for security will wind up with neither, a line from Franklin. Yet the same logic should apply here. If 9/11 should have taught us anything, it’s that you cannot have total security, certainly with the state in charge of everyone’s safety. Nineteen men with boxcutters murdered 3,000 people. In a world with cars, gasoline, fertilizer, gunpowder, and steel, it is simply impossible to eliminate every threat, rifles being one of the smallest ones out there. Since 9/11 we have lost so many freedoms, have seen our police forces turn into nationalized standing armies with tanks and battle rifles, have undergone mass molestation and irradiation at our airports, have seen the national character twisted to officially sanction torture, indefinite detention, and aggressive wars. What will we see happen in the name of stopping troubled young people from engaging in smaller acts of mass murder? Much the way that conservatives led the charge toward fascism after 9/11, with liberals protesting a little at first only to seemingly accept the bulk of the surveillance state and anti-terror national security apparatus, I fear that today’s progressives are leading the stampede toward an even more totalitarian future, with the conservatives playing defense but caving, first on militarized schools, then on mental health despotism, then on victim disarmament.

Perhaps if after 9/11 the conservatives had focused on allowing airlines to manage their own security, even permitting passengers with guns on planes, instead of doubling the intrusiveness of the police state, we’d be in better shape today. But now the progressives are running the show, the SWAT teams have become more ruthless, the domestic drones have been unleashed, the wars abroad have escalated, and the same federal institutions whose gun control measures left American civilians dead at Ruby Ridge and Waco can expect new targets throughout the land. The bipartisan police state commences, now that the left has gotten its own 9/11.

Melinda Herman was a victim of a home invasion. With two children under her care, and a husband many miles away, she fortunately had a weapon. Although under the castle doctrine, she had no duty to retreat from the invader, she ran with her children to the attic and tried to hide. Her back to the wall, she emptied her revolver into the invader, hitting him five times. He still had the strength to get up and flee from the home.

What if she had been unarmed? The local sheriff observed: “Had it not turned out the way that it did, I would possibly be working a triple homicide, not having a clue as to who it is we’re looking for.”

Despite the current push to outlaw high-capacity magazines and certain rifles, it sounds to me like Mrs. Herman could have used both of these for family protection. Fortunately, this situation turned out well though she was armed with just a small revolver. But anti-gun crusaders need to keep in mind that home invasions and such are real dangers for law abiding citizens. We must be able to protect ourselves and our families.

James M. Buchanan toiled in the academic trenches for more than half a century, plowing vital new ground that advanced our understanding of the untamed beast that is government (and, by extension, the rascals who grasp at its reins). His passing yesterday should be a solemn occasion for all who value a free and prosperous society.

But ultimately it may help Buchanan’s cause that he passed away on the 100th anniversary of the birth of one of the wilier rascals of modern American politics, Richard Nixon. If nothing else, this coincidence provides us with an opportunity to reflect on the vastly different legacies these men left, and to publicize the lessons learned from that comparison every January 9th.

For obvious reasons, a full accounting is beyond the scope of a mere blog post. But you can get a glimpse of the Buchanan side of the ledger from reading the recent Beacon posts by Robert Higgs, Randall Holcombe, and Mary Theroux. (Updated 1/11: Also see Alex Tabarrok’s compendium of Buchanan appreciations.) As for the Nixon side of the ledger—where to begin?

On economic policy alone, Nixon’s legacy is remarkably distressing. He pressured the Federal Reserve to help him get re-elected by pumping up the supply of money and credit. He severed the remaining ties of the dollar to gold. He imposed wage and price controls, his controls on energy prices causing especially long-lasting harm. He pushed for higher import duties, his tariffs on textiles being an economic component of his “Southern strategy.” He created vast new feel-good regulatory agencies that continue to hamper every manner of peaceful commerce, from Wall Street to Main Street.

It was all designed to get Nixon re-elected, no matter what the long-term economic harm to ordinary Americans. It’s no small irony that the fervent anti-Communist called his policies what Lenin called his: the New Economic Plan.

There is much to learn from the Nixon legacy. The lesson isn’t simply to beware of wily politicians; it’s also to beware of the political processes and mechanisms that foster, enable, and equip them. And this is the lesson of the life’s work of James M. Buchanan. For until we understand the incentives and pitfalls of electoral politics, we will continue to fall prey to the false promises of opportunistic elected officials and their appointees, who seek rewards for themselves and the advancement of their pet causes while foisting the costs on the rest of us.

May the coincidence of January 9th remind us of the difference between a life guided by noble principles—and a life guided by the blind pursuit of power. And may all of us strive for the former.

According to the London Evening Standard, Prime Minister David Cameron is planning to announce a referendum to be held after the 2015 general election on Britain’s relationship with the EU. Conservatives hope to negotiate a looser membership in which fewer powers are ceded to Brussels, and hold a referendum on the outcome. In other words, Britain is working to have more of a say over its own internal affairs.

What does Washington D.C., have to say about these plans? A BBC news story reports that Philip Gordon, a senior official in the US State Department, wants Cameron to rethink matters and says Britain should remain in the EU. “Referendums have often turned countries inwards,” he added. Translation: Better be careful before you let the people decide anything; they’re not astute enough to know that outsiders are better qualified in running local affairs.

The Brits seem none too happy with Washington’s hectoring. Nile Gardiner, a former Thatcher aide, makes this pithy response:

Fortunately, Barack Obama and his choir of pro-EU officials don’t have a say in deciding Britain’s future in Europe. That will be decided ultimately by the British people, when a referendum is finally held. And if anything, the ignorant and relentless hectoring from Washington will only encourage the resolve of those who are fighting to restore national sovereignty for Britain in Europe. Frankly, British policy on Europe is none of President Obama’s business. The present US administration is not only flat wrong on the EU, but it is also displaying a breathtaking arrogance that will win it few friends across the Atlantic in the second term of the Obama presidency.

Three cheers for British sovereignty and hopes that the British people will have the final say on their relationship with the Eurocrats.

The IRS is my shepherd; I shall live in want. It maketh me to lie down with expensive accountants; it leadeth me to consort with disreputable lawyers. It crusheth my soul; it leadeth me in the paths of avoidance and evasion to preserve my wealth. Yea, as I walk through the valley of the shadow of penalties and interest charges, I will fear its evil; for it is with me; its code and its staff they torment me. It preparest a table before me in the presence of U.S. attorneys: it bruiseth my head with its reporting requirements; my cup of patience runneth out. Surely goodness and mercy shall be strangers to me all the days of my life; and I will dwell in the house that a plundering state has made forever.

From the Associated Press:

At nearly 4 million words, the U.S. tax law is so thick and complicated that businesses and individuals spend more than 6 billion hours a year complying with filing requirements, according to a report Wednesday by an independent government watchdog.

That’s the equivalent of 3 million people working full-time, year-round.

“If tax compliance were an industry, it would be one of the largest in the United States,” says the report by Nina E. Olson, the National Taxpayer Advocate.

The days of most taxpayers sitting down with a pencil and a calculator to figure out their taxes are long gone, Olson said. Since 2001, Congress has made almost 5,000 changes to U.S. tax law. That’s an average of more than one a day.

As a result, almost 60 percent of filers will pay someone to prepare their tax returns this spring. An additional 30 percent will use commercial software. Without the help, Olson says, most taxpayers would be lost.

The Scriptures make us “wise for salvation through faith in Christ Jesus.” (2 Timothy 3:15). The tax code, on the other hand, is just a drain on our time, patience, and resources.

James Buchanan accepting the Alexis de Tocqueville Award from Independent Institute President David Theroux, October 29, 1987

I was surprised to see James Buchanan characterized in the New York Times as “an austere man with a severe aspect that many students found intimidating.”

I was never a student of his, but the James Buchanan I had the pleasure of getting to know as a guest at numerous meetings of the Mont Pelerin Society and through his subsequent association with the Independent Institute was a gentle man with a charming gap-tooth grin and sparkle in his eyes.

His eyes especially lit up when talk turned to baseball, and despite the fact that I know absolutely nothing about the subject, when I sat next to him during a long bus excursion, he seemed perfectly happy to hold up both sides of the conversation, satisfied with nods and smiles from me.

His Southern graciousness shone through in his relations with the Independent Institute, agreeing to join our founding Board of Advisors in 1986—before he was awarded the Nobel Prize—and serving faithfully over the many years since. His increased eminence turned his head not a bit, and he very kindly consented to be the first recipient of the Independent Institute’s Alexis de Tocqueville Award at the first Gala dinner we held in 1987, The National Dinner to Honor James M. Buchanan.

Over the years, he never failed to review forthcoming Independent Institute book projects when asked, providing endorsements for (among others) Beyond Politics, Crisis and Leviathan, Taxing Choice, and, most recently, Living Economics. And as Senior Fellow Robert Higgs noted in his blog post earlier today, he served as a member of the Board of Advisors of The Independent Review upon its founding in 1996. He subsequently contributed two articles to the journal, and graced its cover in 2000.

Quintessentially a Gentleman and a Scholar, Jim Buchanan was one of the truly good guys. It’s nice to see the many posts of those he influenced today, and one hopes that now that he’s gone others will redouble their efforts to further the knowledge and liberty to which he dedicated his life.

Paul Krugman has made a tongue-in-cheek proposal that has set tongues wagging—having the U.S. Treasury Department mint a $1 trillion platinum coin in order to circumvent the federal debt ceiling. Actually, Krugman was not the first to propose this solution he himself calls “silly” but he has given it wider exposure.

In these weird monetary and fiscal times, no proposal is so crazy that it will be dismissed as such by everybody who is generally perceived as sane. Eventually, it may become respectable. There is already an initiative in Congress to prevent the government from printing the platinum coin (something which an obscure norm would allow it to do), while a petition to the White House in favor of the solution has gained some traction. If it gets 25,000 signatures, the White House will have to respond…

The tongue-in-cheek debate has so far centered more on whether it would be legal for the Treasury Department to use the coin, i.e. to draw checks on it once it deposited it with the Federal Reserve, than on what would actually happen. The main argument against the legality of this move is that only Congress could authorize the expenditure. But, given all we know about fiscal spending, can we really trust that Congress will not authorize the government to spend more money? We know for a fact that in 2000 fiscal spending amounted to 18 percent of GDP and that today it amounts to 24 percent. We have just witnessed a tortuous negotiation aimed at averting a “fiscal cliff” that produced a tax hike, not spending cuts. The perception is widespread that entitlements are the only problem. Actually, discretionary spending went up by 70 percent in the last twelve years. How can anyone who keeps their head above their shoulders be so sure that the Treasury would not be authorized, sooner or later, to spend the coin?

Of course, the coin would add to the already colossal monetary base (the Fed´s total assets are already nearing the $3 trillion mark.) The government would use the money presumably to buy back debt. Even if it bought debt from the Fed rather than from the market the money would end up in the market, as it were, because the Fed would use the proceeds to keep buying government bonds. We know this because continuing with asset purchases is official Fed policy! Although I guess initially the coin would be a liability in the Fed´s balance sheet as would any deposit, it would gradually become also an asset either because the money paid into the market by the Treasury would end up as bank reserves at the central bank or because the money would be paid directly to the Fed in order to buy back debt. The effect, either way, would be inflation.

I am, of course, sidestepping the funny issue of how the coin would be turned into many parts, but in an era in which the Fed does virtually anything it wants to do and in which money is an electronic rather than a physical thing I am pretty sure they would find ways to break it up fairly quickly. I am also disregarding the obvious disconnect between the denomination of the coin and the real value of the metal—$1 trillion translates into several thousand tons of platinum, not just a coin. But in the era of fiat money, when was that an issue?

Perhaps there is an upside to discussing this silly gimmick as if it were a real option. Many intelligent solutions to the monetary problem sound to mainstream opinion leaders and politicians too nutty to even consider right now. But the more crazy inflationary ideas (that include monetary fraud) come into respectable circulation, the greater the chances that apparently crazy anti-inflationary ideas, including the abolition of the Fed and the return of the gold standard, can be productively discussed. So long live the Krugmans of this world!