Donald Trump’s decision to impose tariffs has sparked a lively debate among economists and others: are tariffs good? Maybe some of them? Should governments then impose those tariffs that are good? While these discussions are interesting in themselves, they also raise a more general question: what should economists be doing at all?

The title of this blog post is an echo of Buchanan’s seminal paper. However, while I allude to Buchanan, it is not his paper that I want to refer to. Rather, I want to point to another of Buchanan’s insights. Let me begin by quoting a revealing (and charming) story told by Richard E. Wagner, a student of Buchanan’s:

While sitting excitedly in class the first day, I saw Buchanan glance at his roll sheet. He looked into the room as if looking for someone in particular, then said: “Mr. Wagner, what’s wrong with the American tax system?” I felt an adrenalin rush. 

After my summer’s reading, that question was written for me, or so I thought … Instantly I began reciting things I read that summer about simplifying the tax system by reducing exemptions and deductions and such things. Buchanan seemed to be paying close attention to me, which pleased me hugely. When I finished, however, he responded: “Mr. Wagner, you have no business answering a question like that. We are democrats here and not autocrats.” 

The gist of Buchanan’s response (which also runs through his work, beginning with Knut Wicksell, whom Buchanan greatly admired) is that economists are in no position to determine what people should want or to judge what is good for them. There is no “truth” in politics, Buchanan tells us in his The Limits of Liberty. And if one agrees with Buchanan and thus rejects “the truth-judgment approach to politics,” it follows that, as he writes in the first chapter, “we cannot claim to play as God, and we can scarcely carry off the pretense that our own private preferences reflect his ‘truth.’”

Rather, it is up to the people—each and every one of them—to decide what they want and to be the evaluators of their lives. “A situation is judged “good” to the extent that it allows individuals to get what they want to get, whatsoever this might be, limited only by the principle of mutual agreement,” Buchanan tells us. It is not the job of economists—nor of political philosophers or anyone else, for that matter—to determine what is good for others.

Where does that leave economists? They have an incredibly valuable role to play: they are to examine the consequences of different courses of action and recommend different ways forward, given what people want. Thus, economists are concerned with prudence. They ought to give people prudential advice about what are the best means to pursue given ends—very much in line with economists’ aspirations for value-free science.

But let me hasten to add that this does not mean that economists should not chide the government for certain actions—indeed, this will often be their task. But in doing so, they must make it clear that they are only taking citizens’ perspective and not judging the governmental actions themselves. What I mean is that economists can criticise governmental action whenever it goes beyond the unanimous consent of citizens (because, to repeat, this is always the measure of “goodness”). But then economists are not putting forward their preferences—or their “truth”—but insisting that government accept the sovereignty of the individual. Economists should be democrats, not autocrats.

 

Max Molden is a PhD student at the University of Hamburg. He has worked with European Students for Liberty and Prometheus – Das Freiheitsinstitut. He regularly publishes at Der Freydenker.