Democracy in Deficit: The Political Legacy of Lord Keynes (Collected Works of James M Buchanan, Vol 8 (Paper))

Democracy in Deficit is one of the early comprehensive attempts to apply the basic principles of public-choice analysis to macroeconomic theory and policy. According to Robert D. Tollison in the foreword, “The central purpose of the book was to examine the simple precepts of Keynesian economics through the lens of public-choice theory. The basic discovery was that Keynesian economics had a bias toward deficits in terms of political self-interest.” Democracy in Deficit opened the door for much of the current work on political business cycles and the incorporation of public-choice considerations into macroeconomic theory. Even in the area of monetarism, Buchanan’s landmark work has greatly influenced the sway of contemporary theorists away from the nearly universally held belief of Keynesian theory. Democracy in Deficit contributes greatly to Buchanan’s lifelong fiscal and monetary rules to guide long-term policy in macroeconomics. The book serves to bolster Buchanan’s central beliefs in the necessity of a balanced-budget amendment to the U.S. Constitution and in monetary rules rather than central bank discretion. The book is co-authored with Richard Wagner, a respected colleague of Buchanan, whom Buchanan recognized as helping to keep the book free of polemics and on target with its central purpose of applying the elementary theory of public choice. James M. Buchanan is an eminent economist who won the Alfred Nobel Memorial Prize in Economic Sciences in 1986 and is considered one of the greatest scholars of liberty in the twentieth century. The entire series will include: Volume 1: The Logical Foundations of Constitutional Liberty Volume 2: Public Principles of Public Debt Volume 3: The Calculus of Consent Volume 4: Public Finance in Democratic Process Volume 5: The Demand and Supply of Public Goods Volume 6: Cost and Choice Volume 7: The Limits of Liberty Volume 8: Democracy in Deficit Volume 9: The Power to Tax Volume 10: The Reason of Rules Volume 11: Politics by Principle, Not Interest Volume 12: Economic Inquiry and Its Logic Volume 13: Politics as Public Choice Volume 14: Debt and Taxes Volume 15: Externalities and Public Expenditure Theory Volume 16: Choice, Contract, and Constitutions Volume 17: Moral Science and Moral Order Volume 18: Federalism, Liberty, and the Law Volume 19: Ideas, Persons, and Events Volume 20: Indexes Front Matter......Page 1 Title Page......Page 5 Table of Contents, p. vii-x......Page 7 Foreword, p. xi-xiv......Page 11 Richard E. Wagner, p. xv......Page 15 Preface, p. xvii......Page 17 Acknowledgements, p. xxi-xix......Page 21 Part One. What Happened?......Page 23 1. What Hath Keynes Wrought? p. 3......Page 25 2. The Old-Time Fiscal Religion, p. 10......Page 32 3. First, the Academic Scribblers, p. 25......Page 47 4. The Spread of the New Gospel, p. 38......Page 60 5. Assessing the Damages, p. 56......Page 78 Part Two. What Went Wrong?......Page 99 6. The Presuppositions of Harvey Road, p. 79......Page 101 7. Keynesian Economics in Democratic Politics, p. 95......Page 117 8. Money-Financed Deficits and Political Democracy, p. 110......Page 132 9. Institutional Constraints and Political Choice, p. 129......Page 151 Part Three. What Can Be Done?......Page 173 10. Alternative Budgetary Rules, p. 153......Page 175 11. What about Full Employment?, p. 167......Page 189 12. A Return to Fiscal Principle, p. 180......Page 202 Author Index, p. 195......Page 217 Subject Index, p. 197......Page 219 End of the Volume VIII, p. 202......Page 224 In the year (1776) of the American Declaration of Independence, Adam Smith observed that "What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom."