James M. Buchanan on the Ethics of Public Debt and Default (Essay‪)‬

James M. Buchanan (1) won the Nobel Prize in Economic Sciences in 1986. He began work in the 1940s as a Public Finance economist. Buchanan enthusiastically adopted the prevailing positivistic methodology (i.e., Logical Positivism). In a number of areas over the following forty years, Buchanan developed normative aspects of economics. (2) While readers could speculate that this reflected his contributions to two distinct projects, the reality is that there was also some blurring of the boundaries between normative and positive analysis. This article focuses on two related areas in Buchanan's analysis (public debt and default) where positive and normative issues merge. In his work on public debt, Buchanan began from an engineering perspective, but over time he gradually shifted ground. Buchanan's attachment to positivism weakened and in his work on public debt, he gradually added an ethical dimension. Buchanan extended his work on ethical aspects of debt to public default.