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Buchanan on externalities: An exercise in applied subjectivism


  • Marciano, Alain


Buchanan's work on the methodology of economics includes many references to externalities. Buchanan has emphasized that a subjective conception of economics, and a focus put on exchange rather than on choice, has implications on an analysis of externalities. In this paper, we analyze the reverse claim: Buchanan's views on externalities are a perfect illustration of his plea for subjectivism in economics, and the need to focus on economics-as-a-science-of exchange. We show that Buchanan's treatment of externalities was a “laboratory” for his claims and arguments about subjectivism.

Suggested Citation

  • Marciano, Alain, 2011. "Buchanan on externalities: An exercise in applied subjectivism," Journal of Economic Behavior & Organization, Elsevier, vol. 80(2), pages 280-289.
  • Handle: RePEc:eee:jeborg:v:80:y:2011:i:2:p:280-289
    DOI: 10.1016/j.jebo.2011.06.025

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    References listed on IDEAS

    1. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143-143.
    2. Charles W. Baird, 1989. "James Buchanan and the Austrians: The Common Ground," Cato Journal, Cato Journal, Cato Institute, vol. 9(1), pages 201-230, Spring/Su.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    4. Alain Marciano, 2010. "Why markets do not fail. Buchanan on voluntary cooperation and externalities," Center for the History of Political Economy Working Paper Series 2010-05, Center for the History of Political Economy.
    5. Charles M. Tiebout, 1961. "An Economic Theory of Fiscal Decentralization," NBER Chapters,in: Public Finances: Needs, Sources, and Utilization, pages 79-96 National Bureau of Economic Research, Inc.
    6. Buchanan, James M, 1988. "Contractarian Political Economy and Constitutional Interpretation," American Economic Review, American Economic Association, vol. 78(2), pages 135-139, May.
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    Cited by:

    1. Maxime Desmarais-Tremblay, 2014. "On the Definition of Public Goods. Assessing Richard A. Musgrave's contribution," Documents de travail du Centre d'Economie de la Sorbonne 14004, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

    More about this item


    Subjectivism; Objectivism; Choice; Exchange; Buchanan; Externalities;

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology


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