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Published originally in 1975, The Limits of Liberty made James Buchanan’s name more widely known than ever before among political philosophers and theorists and established Buchanan, along with John Rawls and Robert Nozick, as one of the three new contractarians, standing on the shoulders of Hobbes, Locke, and Kant.

While The Limits of Liberty is strongly related to Buchanan’s Calculus of Consent (Vol. 3 in Liberty Fund’s Collected Works of James M. Buchanan), it is logically prior to the Calculus, according to Hartmut Kliemt in the foreword, even though it was published later. As Kliemt states, “[The Limits of Liberty] characterizes the status quo from the point where Paretian politics starts and at the same time describes conceivable processes of interindividual agreement that might lead from a natural equilibrium to a political one.”

Buchanan frames the central idea most cogently in the opening of his preface: “Precepts for living together are not going to be handed down from on high. Men must use their own intelligence in imposing order on chaos, intelligence not in scientific problem-solving but in the more difficult sense of finding and maintaining agreement among themselves. Anarchy is ideal for ideal men; passionate men must be reasonable. Like so many men have done before me, I examine the bases for a society of men and women who want to be free but who recognize the inherent limits that social interdependence places on them.”

The Paradox of “Being Governed

Americans are dissatisfied with the status quo. This is more than mere assertion and more than reference to the discontented of all ages. There is a difference between the attitude of citizens toward the institutions of their society in the 1970s and the attitude that existed before 1960. Faith in the “American dream” has largely disappeared, and restoration does not seem in the offing. Who could have predicted that major American cities would prove so reluctant to host a celebration of the bicentennial of nationhood?
…Dissatisfaction with the institutional structure, and most notably with the observed performance of government at all levels, remains widespread, but there is no effective means through which this shared attitude can be translated into positive results. Reactions against the excesses of bureaucracy provide the source for bureaucratic expansion. Frustrations with the status quo are noted by politicians and by actual and would-be self-serving “public servants.” Proposals come forward for resolving “social problems,” almost on an assembly-line schedule, proposals that necessarily require expansion rather than contraction in elements of structure that generate the evils. The infinite regress involved in what has been called the “public utility attitude” goes on. If something is wrong, have government regulate it. If the regulators fail, regulate them, and so on down the line. In part this is the inevitable result of public failure to understand the simple principle of laissez-faire, the principle that results which emerge from the interactions of persons left alone may be, and often are, superior to those results that emerge from overt political interference.1 There has been a loss of wisdom in this respect, a loss from eighteenth-century levels, and the message of Adam Smith requires reiteration with each generation. (Modern economics must stand condemned in its failure to accomplish this simple task, the performance of which is, at base, the discipline’s primary reason for claiming public support.)

James M. Buchanan

In 1986 James M. Buchanan (1919-2012) was awarded the Alfred Nobel Memorial Prize in Economic Sciences. Universally respected as one of the founders of the “public choice” school of economics, he is the author of numerous books and hundreds of articles in the areas of public finance, public choice, constitutional economics and economic philosophy. He is best known for such works as The Calculus of Consent, The Limits of Liberty, The Power to Tax, and The Reason of Rules. Buchanan has devoted himself to the study of the contractual and constitutional basis for the theory of economic and political decision making.

See also at Econlib: the Concise Encyclopedia of Economics entry on Buchanan