James Buchanan and George Stigler
Divergent Legacies from Frank Knight
Originally published in George Stigler
I have been asked to compare James Buchanan’s body of work with that of George Stigler for a symposium on Stigler’s contributions to economics. I run my exposition through Frank Knight, who exerted strong though different forms of influence over both Stigler and Buchanan. Stigler’s oeuvre is largely an extension and refinement of Knight’s theory of perfect competition set forth in Risk, Uncertainty, and Profit, including Stigler’s effort to incorporate politics into the theory of perfect competition. In contrast, Buchanan tried to bridge the gap between Knight’s formulations of perfect and imperfect competition, while also emphasizing differences between markets and politics. Buchanan also tried to incorporate some of Knight’s repeated tergiversations about economic theory in relation to reality into his work, in contrast to Stigler’s comparative contentment with the state of economic theory.