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Reviewed by: Doug Brown, Northern Arizona University
This short and eminently readable paperback consists of six chapters, five of which are lectures not published previously. The remaining chapter is a 1966 article published originally in the Southern Economic Journal. These are well-edited essays that are clearly integrated by a central theme. James Buchanan is of course a Nobel laureate, having received this honor in economics in 1986, so the lectures are well-styled and his ideas are communicated clearly. There is no room for misunderstanding and he anticipates all of the essential questions both the academic economist and non-economist might put forth. To its credit, this book is written for a general audience rather than for a narrow group of Buchananites or academic economists.
Each essay concerns the fact that there are externalities that are not taken into account when individual tastes and preferences are assumed (in neoclassical theory) to be exogenously given, and furthermore, these externalities have welfare effects that alter Pareto optimality (economic progress). This may sound like professional economic jargon, and in a sense it is. But Buchanan states it more simply. He suggests that economic progress can be influenced by our internalized ethical norms, because these norms alter our tastes and preferences for work, saving, and leisure. Therefore, these norms have external benefits associated with them. The ethical norms he mentions mostly revolve around the Puritan work and saving ethic, and Buchanan argues …