As its subtitle reveals, this book is aimed at readers who are interested in the early
history of the Virginia School of political economy. The book discusses that history
from two different vantage points. First, it discusses the ideas that distinguish Virginia
political economy from other schools of thought and, most pointedly, from the
neoclassical orthodoxy of the 1950s and 1960s, when the Virginia School was taking
on its distinctive identity. Second, it examines the challenges the individuals in the
Virginia School faced to gain both acceptance and funding.
Although many books have been written about the ideas of the Virginia School,
especially the ideas of James Buchanan, the central figure in the development of the
school, one big contribution this book makes is that it contains many previously unpublished documents that show the struggle Buchanan and his colleagues had
in trying to establish their school. That struggle was on the two fronts noted in the
previous paragraph: the struggle for acceptance of the schools ideas and the struggle
to fund the schools programs.
The Virginia Schools origins might be traced back to the establishment of the
Thomas Jefferson Center for Studies in Political Economy (TJC) at the University of
Virginia in 1957, spearheaded by Buchanan and Warren Nutter. The book discusses
earlier work of Virginia School scholarsmost notably, Buchanans earlier workas
well as the influence of the old Chicago School and the ideas of Frank Knight.
Buchanan is heavily featured in the book, making the ideas of the Virginia School
appear to be Buchanans and other supporting individuals ideas. This conflation
seems appropriate because Buchanans ideas had the largest impact in shaping the
schools unique identity.
The book looks at the methodological differences between the Virginia School
in its early years and mainstream scholars, including Kenneth Arrow and George
Stigler, but the difficulties the school faced were often based more on ideological
issues. The Virginia School and Buchanan in particular had a strong classical liberal
orientation that ran into opposition both from a funding standpoint and from others
at the University of Virginia.
A funding proposal by the TJC in 1961 was rejected by the Ford Foundation,
and the sense was that it was rejected in no small measure because of a perceived
unity of conservative views at the Center (p. 49). In 1963, a self-study report
done by the University of Virginia found that the TJC had a particular and
disreputable viewpoint. The book provides detailed documentation of the Ford
Foundation grant application and of the discussion that occurred in the aftermath
of its rejection.
The book discusses at length funding for Virginia School programs by the H.
B. Earhart Foundation as well as later funding contributions from the Koch Foundation.
These foundations were associated with free-market and classical liberal ideas,
reinforcing the view many had about the schools ideological orientation. The book
considers the relationship between the school and the antidemocratic right, with
some emphasis on Buchanan and Tullocks relationships with Murray Rothbard, and
concludes that [e]vidence of a connection between the early Virginia School and the
anti-democratic right is rather thin (p. 232).
The book emphasizes throughout the Virginia Schools classical liberal ideological
orientation and notes the negative reactions many had to the school for that
reason. At the University of Virginia, open hostilities [were] directed by the university
administration toward the economists of the Virginia School (p. 244). The
administration saw the Economics Department as espousing a single point of view
and recommended hiring economists at the senior level with a different and modern
outlook to dilute the departments perceived ideological slant.
The book devotes a chapter to work by Buchanan and Nutter advocating tuition
grants to parents who wanted to send their children to private schools. This is
a minor part of the Virginia Schools work and of the work done by Buchanan and
Nutter, but it has recently risen in visibility because of claims that their support for
government funding for private schools was intended to prolong segregated education.
The book provides ample evidence, however, that their advocacy was based on
individualistic grounds and that Buchanan in particular viewed voucher funding as a
way to equalize opportunities, not to segregate students.
The TJCs perceived ideological orientation created resistance both inside and
outside the University of Virginia. In 1964, when future Nobel laureate and TJC faculty
member Ronald Coase received an offer to move to the University of Chicago,
Virginia refused to match the offer, and Coase left. A few years later the University
of Virginia refused to promote Gordon Tullock, another TJC faculty member, who
came up for promotion three times. Facing substantial resistance at the University of
Virginia, both Buchanan and Tullock left it in 1967 and joined forces again in 1968
when, with former University of Virginia student Charles Goetz, they formed the
Center for Study of Public Choice at Virginia Tech.
The book highlights aspects of the Virginia School that challenged the orthodoxy
at the time. The schools individualistic approach to political economy and its
challenge to majoritarian democracy, monetary policy, work on the public debt, rent
seeking, and the role of economists as advisers are discussed in chapter 5. Readers
interested in the development of the Virginia Schools ideas will find insights here,
and it is interesting to note that with the major exception of rent seeking, the schools
ideas still remain outside the mainstream. The Virginia School is often associated
with public choice, and although there is a connection, most scholarly work in public
choice is neoclassical and empirical in nature, and this chapter does a good job of distinguishing
some unique Virginia School ideas that differentiate it from public choice.
The book recounts some notable connections between Virginia School economists
and others, noting the relationships between Buchanan and Friedrich Hayek,
Nutter and Walt Rostow, and Tullock and Karl Popper. It discusses Buchanans
description of the old Chicago School heavily influenced by Frank Knight and the
new Chicago School led by George Stigler and Robert Lucas to emphasize the distinction
between the Chicago and Virginia Schools. Buchanan, Nutter, and Tullock
received degrees from the University of Chicago, so it is natural to see a relationship
between those two schools, making Buchanans distinction between the old and new
Chicago Schools very relevant to understanding the evolution of Virginia School
ideas that began with the old Chicago and departed from the new. Chapter 6 features
an eight-page appendix that reproduces Buchanans essay contrasting the old and
new Chicago Schools.
The subtitle of the book calls it a documentary history of the early Virginia
School, and its most valuable contribution is that it reproduces many previously unpublished materials to support its recounting of the schools founding and early development.
The book makes it appear as if the establishment of the Virginia School faced
one struggle after another, and although there is some truth in thatthere will always
be resistance to ideas that challenge the status quoreaders should also recognize the
remarkable success the Virginia School had and continues to have. Yes, Buchanan and
Tullock left both the University of Virginia and Virginia Tech to seek more congenial
environments and ended up at George Mason University, but despite some funding
struggles, they did attract funding to support their programs, and Buchanan won a
Nobel Prize in economics in 1986 for his work. Although the ideas of the Virginia
School remain largely outside the mainstream, they are a visible alternative.
The last chapter asks, Should the Virginia School be restored? I am surprised
that Levy and Peart would ask that question because in my view the Virginia School
has never weakened and still has a solid home at George Mason University, even
though all of its founders are no longer living. The schools distinctive ideas remain
central to George Masons Ph.D. program in economics, and its graduates have been
successful in securing academic positions throughout the country. The concepts that
Buchanan emphasized throughout his careerindividualism, subjectivism, and politics
as exchangeremain in that program, differentiating it from other Ph.D. programs.
The Virginia School seems as well established today as it has ever been, and
those associated with it are among those who will have an interest in its history. This
book is an important addition to that history.