Milton Friedman, James Buchanan, and Constitutional Political Economy

This chapter argues that the ambiguous bifurcation in Frank Knight’s understanding of economics would manifest itself through the divergent paths in the earlier writings of his students Milton Friedman and James Buchanan. It argues that despite Friedman’s stature in the scientific elite of the profession of economics, the stronger argument for the classical liberal order is found in Buchanan’s work. Moreover, we argue that in the later part of Friedman’s career as a classical liberal political economist, his arguments for the free market society moved away from his earlier emphasis on efficiency claims to the broader claims about the institutional framework within which the game of life is played. In short, Friedman came to stress more the arguments of Buchanan concerning the positive analysis of the politics of economic policy, and the constitutional level of analysis for reform.