JAMES BUCHANAN has been awarded the 1986 Nobel Prize in Economics. In one sense, the prize is richly deserved. Buchanan has pioneered a new way of thinking about the political process that now comes naturally to academic economists and has made important converts among political scientists. Among his pupils and disciples in government he can count Senator Phil Gramm and Office of Management and Budget director James C.  Miller III. In another sense, though, the award is a sad event. It features economists themselves applauding efforts to extend the reach of economic analysis far beyond the area where it is useful—in the analysis of the economy—into areas where the marketplace paradigm is inapposite and pernicious.