As Christmas approaches, why not spend a few minutes reading about the little-known economist who did so much to burden America and other countries with a brand of economics and politics that would have warmed Scrooge’s cold, cold heart? Lynn Parramore of the Institute for New Economic Thinking wrote about him in 2018:
Ask people to name the key minds that have shaped America’s burst of radical right-wing attacks on working conditions, consumer rights and public services, and they will typically mention figures like free market-champion Milton Friedman, libertarian guru Ayn Rand, and laissez-faire economists Friedrich Hayek and Ludwig von Mises.
James McGill Buchanan is a name you will rarely hear unless you’ve taken several classes in economics. And if [Buchanan] were alive today, it would suit him just fine that most well-informed journalists, liberal politicians, and even many economics students have little understanding of his work.
The reason? Duke historian Nancy MacLean contends that his philosophy is so stark that even young libertarian acolytes are only introduced to it after they have accepted the relatively sunny perspective of Ayn Rand. (Yes, you read that correctly). If Americans really knew what Buchanan thought and promoted, and how destructively his vision is manifesting under their noses, it would dawn on them how close the country is to a transformation most would not even want to imagine, much less accept.
That is a dangerous blind spot, MacLean argues in a meticulously researched book, Democracy in Chains…
Buchanan … started out as a conventional public finance economist. But he grew frustrated by the way in which economic theorists ignored the political process. He began working on a description of power that started out as a critique of how institutions functioned in the relatively liberal 1950s and ‘60s… Buchanan, MacLean notes, was incensed at what he saw as a move toward socialism and deeply suspicious of any form of state action that channels resources to the public. Why should the increasingly powerful federal government be able to force the wealthy to pay for goods and programs that served ordinary citizens and the poor?
In thinking about how people make political decisions and choices, Buchanan concluded that you could only understand them as individuals seeking personal advantage. In an interview cited by MacLean, the economist observed that in the 1950s Americans commonly assumed that elected officials wanted to act in the public interest. Buchanan vehemently disagreed…
His view of human nature was distinctly dismal. Adam Smith saw human beings as self-interested and hungry for personal power and material comfort, but he also acknowledged social instincts like compassion and fairness. Buchanan, in contrast, insisted that people were primarily driven by venal self-interest. Crediting people with altruism or a desire to serve others was “romantic” fantasy: politicians and government workers were out for themselves, and so, for that matter, were teachers, doctors, and civil rights activists. They wanted to control others and wrest away their resources: “Each person seeks mastery over a world of slaves,” he wrote in his 1975 book, The Limits of Liberty.
Does that sound like your kindergarten teacher? It did to Buchanan.
The people who needed protection were property owners, and their rights could only be secured though constitutional limits to prevent the majority of voters from encroaching on them… MacLean observes that Buchanan saw society as a cutthroat realm of makers (entrepreneurs) constantly under siege by takers (everybody else) His own language was often more stark, warning the alleged “prey” of “parasites” and “predators” out to fleece them.
In 1965 the economist launched a center dedicated to his theories… MacLean describes how he trained thinkers to push back against the Brown v. Board of Education decision to desegregate America’s public schools… She notes that he took care to use economic and political precepts, rather than overtly racial arguments, to make his case, which nonetheless gave cover to racists who knew that spelling out their prejudices would alienate the country….
[Buchanan] focused on how democracy constrains property owners and aimed for ways to restrict the latitude of voters. [MacClean] argues that unlike even the most property-friendly founders Alexander Hamilton and James Madison, Buchanan wanted a private governing elite of corporate power that was wholly released from public accountability.
Suppressing voting, changing legislative processes so that a normal majority could no longer prevail, sowing public distrust of government institutions— all these were tactics toward the goal….
In nurturing a new intelligentsia to commit to his values, Buchanan stated that he needed a “gravy train,” and with backers like Charles Koch and conservative foundations like the Scaife Family Charitable Trusts, others hopped aboard. Money, Buchanan knew, can be a persuasive tool in academia. His circle of influence began to widen….
MacLean describes how the economist developed a grand project to train operatives to staff institutions funded by like-minded tycoons, most significantly Charles Koch, who became interested in his work in the ‘70s… Koch, whose mission was to save capitalists like himself from democracy, found the ultimate theoretical tool in [Buchanan’s] work. [MacClean] writes that Koch preferred Buchanan to [conservative economist] Milton Friedman and his “[University of]Chicago boys” because, she says, quoting a libertarian insider, they wanted “to make government work more efficiently when the true libertarian should be tearing it out at the root.”
With Koch’s money and enthusiasm, Buchanan’s academic school evolved into something much bigger. By the 1990s, Koch realized that Buchanan’s ideas — transmitted through stealth and deliberate deception, as MacLean amply documents — could help take government down through incremental assaults that the media would hardly notice. The tycoon knew that the project was extremely radical, even a “revolution” in governance, but he talked like a conservative to make his plans sound more palatable.
MacLean details how partnered with Koch, Buchanan’s [center] at George Mason University was able to connect libertarian economists with right-wing political actors and supporters [at] corporations like Shell Oil, Exxon, Ford, IBM, Chase Manhattan Bank, and General Motors. Together they could push economic ideas to the public through media, promote new curricula for economics education, and court politicians in nearby Washington, D.C.
… MacLean recounts that Buchanan … focused on such affronts to capitalists as environmentalism and public health and welfare, expressing eagerness to dismantle Social Security, Medicaid, and Medicare as well as kill public education because it tended to foster community values. Feminism had to go too…
Buchanan’s ideas began to have huge impact, especially in America and in Britain….The economist was deeply involved in efforts to cut taxes on the wealthy in 1970s and 1980s and he advised proponents of Reagan Revolution in their quest to unleash markets and posit government as the “problem” rather than the “solution.” The Koch-funded Virginia school coached scholars, lawyers, politicians, and business people to apply stark right-wing perspectives on everything from deficits to taxes to school privatization. In Britain, Buchanan’s work helped to inspire the public sector reforms of Margaret Thatcher and her political progeny.
To put the success into perspective, MacLean points to the fact that [law professor] Henry Manne, whom Buchanan was instrumental in hiring, created legal programs for law professors and federal judges which could boast that by 1990 two of every five sitting federal judges had participated. “40 percent of the U.S. federal judiciary,” writes MacLean, “had been treated to a Koch-backed curriculum.”
MacLean illustrates that in South America, Buchanan was able to first truly set his ideas in motion by helping a bare-knuckles dictatorship ensure the permanence of much of the radical transformation it inflicted on [Chile], a country that had been a beacon of social progress. The historian emphasizes that Buchanan’s role in the disastrous Pinochet government …has been underestimated partly because unlike Milton Friedman, who advertised his activities, Buchanan had the shrewdness to keep his involvement quiet.
The dictator’s human rights abuses and pillage of the country’s resources did not seem to bother Buchanan, MacLean argues, so long as the wealthy got their way. “Despotism may be the only organizational alternative to the political structure that we observe,” the economist had written in The Limits of Liberty….
[MacClean] observes that many liberals have missed the point of strategies like privatization. Efforts to “reform” public education and Social Security are not just about a preference for the private sector over the public sector, she argues. You can wrap your head around those, even if you don’t agree. Instead, MacLean contends, the goal of these strategies is to radically alter power relations, weakening pro-public forces and enhancing the lobbying power and commitment of the corporations that take over public services and resources, thus advancing the plans to dismantle democracy and make way for a return to oligarchy. The majority will be held captive so that the wealthy can finally be free to do as they please, no matter how destructive.
MacLean argues that despite the rhetoric…, shrinking big government is not really the point. The oligarchs require a government with tremendous new powers so that they can bypass the will of the people. This, as MacLean points out, requires greatly expanding police powers “to control the resultant popular anger”…
Could these right-wing capitalists allow private companies to fill prisons with helpless citizens—or, more profitable still, rights-less undocumented immigrants? They could, and have. Might they engineer a retirement crisis by moving Americans to inadequate 401(k)s? Done. Take away the rights of consumers and workers to bring grievances to court by making them sign forced arbitration agreements? Check. Gut public education to the point where ordinary people have such bleak prospects that they have no energy to fight back? Getting it done.
Would they even refuse children clean water? Actually, yes. MacLean notes that in Flint, Michigan, Americans got a taste of what the emerging oligarchy will look like… There, the Koch-funded Mackinac Center pushed for legislation that would allow the governor to take control of communities facing emergency and put unelected managers in charge. In Flint, one such manager switched the city’s water supply to a polluted river…Tens of thousands of children were exposed to lead…
Economist Tyler Cowen has provided an economic justification for this kind of brutality, stating that where it is difficult to get clean water, private companies should take over and make people pay for it. “This includes giving them the right to cut off people who don’t—or can’t—pay their bills”…
Research like MacLean’s provides hope that toxic ideas like Buchanan’s may finally begin to face public scrutiny. Yet at this very moment, the Kochs’ State Policy Network and the American Legislative Exchange Council (ALEC), a group that connects corporate agents to conservative lawmakers to produce legislation, are involved in projects that the … media hardly notices, like pumping money into state judicial races. Their aim is to stack the legal deck against Americans in ways that MacLean argues may have even bigger effects than Citizens United, the 2010 Supreme Court ruling which unleashed unlimited corporate spending on American politics. The goal is to create a judiciary that will interpret the Constitution in favor of corporations and the wealthy in ways that Buchanan would have heartily approved.
“The United States is now at one of those historic forks in the road whose outcome will prove as fateful as those of the 1860s, the 1930s, and the 1960s,” writes MacLean. “To value liberty for the wealthy minority above all else and enshrine it in the nation’s governing rules, as [Buchanan] called for and the Koch network is achieving, play by play, is to consent to an oligarchy in all but the outer husk of representative form.”
For the record, quoting John Maynard Keynes:
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.
Especially if billionaires are spreading the scribbler’s ideas.