Published online by Cambridge University Press: 16 December 2019
The early Virginia School of Economics builds upon the work of the British classical economists as extended by Knight at the University of Chicago. In opposition to the nascent economic orthodoxy's emphasis on efficiency, the Virginia School emphasized economic activity and policy as processes generated by discussion. One continuing controversy involves the status of group goals. Virginia's Vining defended the NBER against Koopmans’ criticism as atheoretic and thus inefficient. For Vining, the NBER attempted to discover hypotheses, an activity for which efficiency is undefined. Buchanan used the Knightian principle of government by discussion to argue that Arrow’s demonstration of an inefficient democracy assumed away the possibility of discovering one’s goals through discussion. Government by discussion has an unappreciated role in Buchanan’s development of Wicksell’s unanimity criterion into the view of politics as exchange. Who participates in the discussion? Only people who actually exist. That privileges the status quo and reduces the economist’s role to offering advice to fellow citizens as equals.