James M. Buchanan received the 1986 Nobel Prize in Economics for “his development of the contractual and constitutional bases for the theory of economic and political decision making.” In its announcement of the prize, the Royal Swedish Academy of Sciences noted, “Buchanan's foremost achievement is that he has consistently and tenaciously emphasized the significance of fundamental rules and applied the concept of the political system as an exchange process for the achievement of mutual advantages.” Buchanan is often identified as the father of Public Choice Theory, and his accomplishments are even more notable because of his rural southern origins and because his contributions were made outside the mainstream of traditional economic thinking.
Buchanan was born in Murfreesboro, the grandson of John P. Buchanan, Tennessee governor during the 1890s and former president of the Farmers' Alliance. Buchanan's early years were marked by frugality and hard work. Limited resources restricted his educational options, and he chose to attend Middle Tennessee State Teachers College. In Better Than Plowing, a series of autobiographical essays, Buchanan described his life as a day student returning home each evening to milk cows and perform chores on the family farm.
After graduation with honors in mathematics, English, literature, and social science, Buchanan chose continued academic study over a banking position and earned a master's degree in economics at the University of Tennessee in 1941. Drafted into the military, he trained as a naval officer and spent much of World War II serving at Pacific Fleet Headquarters on the operations staff of Admiral Chester W. Nimitz. After the war, Buchanan returned to his academic studies, earning a Ph.D. in economics in 1948 from the University of Chicago. Professor Frank Knight strongly influenced Buchanan's intellectual development, especially his emergence as an academic advocate of the market order. Buchanan also discovered the writings of Knut Wicksell, a Swedish economist, which provided important insights leading to his development of Public Choice Theory.
Following a series of academic positions at Tennessee and Florida universities, Buchanan was appointed professor and chair of the Department of Economics at the University of Virginia. Despite innovative scholarship and the establishment of the Thomas Jefferson Center for Studies in Political Economy, he failed to garner the support of the University administration, which considered his research too conservative and outside mainstream economic thought then advocating growing government intervention in the economy. Buchanan moved to Virginia Polytechnic Institute and State University, where with others he founded the Center for Public Choice. In 1983 he accepted a professorship at George Mason University and relocated the center to its current site.
Buchanan is internationally recognized for his contributions to Public Choice Theory, which has provided the theoretical basis directly and indirectly for conservative political proposals such as a constitutional amendment to balance the federal budget. In addition to the Nobel Prize, Buchanan has received many honors and has provided leadership to major professional economics associations. He is a distinguished fellow of the American Economic Association and a fellow of the American Academy of Arts and Sciences. In 1997 his alma mater, Middle Tennessee State University, established the Buchanan Scholars Program to support outstanding students who exhibit the scholarly and leadership characteristics of one of its most distinguished graduates.
James M. Buchanan, Better Than Plowing (1992); The Calculus of Consent (1962) with Gordon Tullock; The Limits to Liberty: Between Anarchy and Leviathan (1975); Democracy in Deficit (1977) with Richard E. Wagner; and The Power to Tax (1980) with Geoffrey Brennan