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The Brains of the Radical Right (Part 1)

August 1, 2018

democracy_in_chains_maclean

Does the name James M. Buchanan ring a bell? No, not the eponymous president who preceded Lincoln, but the libertarian Nobel laureate economist whose ideas and writings have provided the intellectual underpinnings and playbook for today’s radical right and have been promulgated by lavish support from the Kochs and other super-rich dark money contributors. In case a book about that sounds super-boring, I just finished reading Duke University historian Nancy MacLean’s Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America, and I can assure you that it is a riveting story. But most importantly, it explains how the economic and political theories of the reactionary right from the “Reagan Revolution” to the “Contract with America” to the Tea Party developed and took over the Republican Party in the age of Trump.

Buchanan, who died in 2013, became the most prominent American proponent of something with the anodyne name of “public choice theory” (I know, but stick with me, please!). In a (doubtless oversimplified) nutshell, he argued that individuals vote solely based on their economic interests, and that government programs, which use tax money to take money from some people in order to provide goods or services to other people, create a society of “takers” who violate the economic freedom of the “producers” who are being essentially robbed without their consent. He defined freedom purely in individual economic terms, and rejected any idea of a common good or general social benefit, regarding collective action of any kind (for example, labor unions) as anathema because they violate individual liberty. The problem that Buchanan saw was that government programs that help the many at the expense of the few are popular with the recipients of those benefits, who therefore vote for the politicians who support them, which in turn results in expanded government programs and spending. The same is true with regard to government regulations that place restriction on certain economic activity, such as environmental controls. His solution to that is to write the rules so that government activity is limited to military and police protection and that voting is restricted to exclude the “takers”. Is this starting to sound more familiar now?

Buchanan grew up in Tennessee and, aside from graduate school in Chicago and a brief faculty appointment at UCLA, he spent his adult life in Virginia. Indeed, the philosophy he espoused clearly reflects the South of his era–minimal government serving an oligarchic ruling class, minimal investment in public education or other government services, and virtually no concern about the common welfare or social justice. MacLean draws a direct line from the ideas of the antebellum South Carolinian John C. Calhoun, who defended slavery with the language of economic liberty.

MacLean explains how Buchanan’s evolving academic writing entered the political realm in 1950s Virginia–then the political fiefdom of Harry Byrd, Jr. and a bastion of segregation. There his arguments against tax-supported public schools became one of the pillars of the state’s “massive resistance” to integration, which resulted in the actual closure of some schools rather than admit black students–in one rural country this lasted for 4 years! Buchanan was then at the University of Virginia, which was at the time something of an academic backwater–all male and, of course, all white. There he began to cultivate and attract a coterie of like-minded disciples and colleagues who became known as the “Virginia School” of economists and produced a steady stream of academic research and graduates to propagate libertarian ideas. There he also pioneered the development of autonomous institutes or centers within the university system that were financed by corporate and private money and therefore could operate largely outside of the norms and restraints  of the university administration.

Buchanan didn’t resort to of overtly racist language in justifying Virginia’s massive resistance, opting to stay with the abstruse academic language of “public choice” and economic freedom. (Just as Southerners have always insisted that the Civil War wasn’t about slavery, but rather preserving states’ rights.) Here, as on other occasions throughout his career, Buchanan was unconcerned with institutional segregation and racism. For this line of thought, inequality is irrelevant and reducing it is not even a goal, and the fact that black kids were being deprived of even an inferior education was of no importance. For people who do care about such things, Buchanan’s role in this sordid effort by Virginia and other states to preserve Jim Crow has tainted every use of his writing against government programs to reduce inequality and expand our democracy. For Buchanan’s libertarian partisans and the Republican radicals who have weaponized his ideas to attack dangerous things like unions, Social Security, and public schools, that’s no problem.

Buchanan’s academic work was purely theoretical, and he disdained empirical research and the kind of sophisticated mathematical modeling that mainstream economists employ. His theories, therefore, were more in the mode of an elaborately worked-out theology than scientific methodology. However, his ideas did get their shot at practical application in a somewhat unlikely place–the country of Chile during the military dictatorship that began in 1973. Starting in 1975 the Pinochet regime sought advice from the monetarist economist Milton Friedman (a mentor for Buchanan at the University of Chicago) and from F. A. Hayek, the Austrian economist who was the dean of the libertarian (aka “neo-liberal”) school which so profoundly influenced Buchanan. But it was Buchanan himself who had the strongest and most lasting influence on the Chilean regime, which became notorious for its ruthlessness and brutality.

A Chilean devotee of the “Virginia School”, Pinochet’s Labor Minister José Piñera devised a series of radical structural changes known as the “seven modernizations” which were implemented starting in the late 70s. These included draconian restrictions on unions, privatization of the social security system, privatization of health care, transformation of the judiciary, free trade in agricultural commodities, drastic limits on government regulations in the economy, and privatization of education through the use of vouchers and “self-financing” of university education–all of which were “public choice” nostrums. The beauty of it, of course, was that in a dictatorship there was no opposition to stand in the way.

Buchanan himself went to Chile in 1980 to deliver a series of lectures and private consultations which went well beyond economic restructuring. His most enduring legacy was in the re-writing of the Chilean constitution to restrict democratic participation and to implement his theories while making them almost impossible to change. Buchanan always distrusted democracy because it empowered “takers” who support the sort of government redistributive programs and regulations that restrict individual economic freedom.  In Chile, he found a way to place shackles on the electoral system which would permanently over-represent the right-wing minority to favor elite interests. (The new constitution was presented in a “yes or no” plebiscite clearly rigged to produce the desired result, and the result was a “virtually unamendable” charter that survived the military dictatorship to the present day.) Buchanan returned to Chile in 1981, when the Mont Pelerin Society (an exclusive club of like-minded economists) held a celebratory meeting in Viña de Mar, which was widely viewed as providing legitimacy and an intellectual rationale for the regime’s actions.

So how did it all turn out for Chileans? In the interest of brevity, we’ll skip over the social costs of the dictatorship (including at least 3,200 Chileans killed or “disappeared”, more that 20,000 tortured while under detention, and an estimated 200,000 forced to flee the country) and just focus on the economic results. Initially, things looked good, especially for those with means. Their privatized social security accounts blossomed as banks loosened lending practices and foreign money flooded back into Chile. Then in 1982–the year after the Mont Pelerin Society’s victory lap–the international financial crisis hit, and the Chilean economy–now largely operating as an unregulated free market–went into a tailspin. Many major banks went bankrupt, unemployment spiked above 20 percent, and middle class retirement savings in privatized accounts evaporated. Between 1970 and 1987, the number of Chileans classified as poor or indigent went from 23 to 45 percent of the population. Without a safety net, precarious and low-income work became the norm for nearly half the Chilean labor force. Chile’s middle class, once the strongest in Latin America, has never fully recovered. The crisis was severe enough that even Pinochet got rid of the “Chicago Boys” who had been running the economy and imposed more orthodox economic policies including nationalizing some banks. Even today, Chile’s index of income inequality is the fifth highest of the 35 OECD countries, exceeded only by Mexico, Costa Rica, Brazil, and South Africa.

Nothing daunted, the public choice theorists got their next chance to affect policy when Ronald Reagan swept into the White House in 1981. That story will continue in another post.

 

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