Today’s passing of Nobel Prize-winning economist James M. Buchanan is a sad milestone, but a good time to remember his impact on economics. Buchanan’s basic contribution to economic theory (and policy) was both simple and profound: Political decision makers, just like consumers and producers, are self-interested and subject to constraints. This important insight appears to be almost entirely ignored, even by many conservatives, in the current policy debates.

The topic of deficit financing for governments was a continual concern for Professor Buchanan. While other economists debated the appropriate level and timing of federal deficits, Buchanan warned of the danger of deficit finance when it left the world of economic theory and entered the world of political gamesmanship. History has confirmed his theory—unlike economists, politicians will continually prefer to run up the debt. Deficits allow politicians to provide special-interest backers with costly projects during the current election cycle while deferring payment until after the next election. The result has been (as he predicted) a virtually unending string of budget deficits and an ever-rising national debt.

Though growing up on a rural Tennessee farm gave him strong populist inclinations, experience and intellect made him realize that big government would be bent to the will of the politically powerful and was not the friend of the little person. He constantly advocated for institutional changes (such as a constitutional amendment to require balanced budgets) to limit leviathan government.

James M. Buchanan’s creative thinking and originality will be sorely missed. Let’s hope his lessons endure.