One man’s mission to rip up democracy
James Buchanan’s vision of totalitarian capitalism has infected policy in the US and UK
It’s the missing chapter: a key to understanding the politics of the past half-century. To read Nancy MacLean’s new book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America, is to see what was previously invisible. The history professor’s work on the subject began by accident. In 2013 she stumbled across a deserted clapboard house on the campus of George Mason University in Virginia. It was stuffed with the unsorted archives of a man who had died that year whose name is probably unfamiliar to you: James McGill Buchanan. She says the first thing she picked up was a stack of confidential letters concerning millions of dollars transferred to the university by the billionaire Charles Koch.
Her discoveries in that house of horrors reveal how Buchanan, in collaboration with business tycoons and the institutes they founded, developed a hidden programme for suppressing democracy on behalf of the very rich. The programme is now reshaping politics, and not just in the US.
Buchanan was strongly influenced by both the neoliberalism of Friedrich Hayek and Ludwig von Mises, and the property supremacism of John C Calhoun, who argued in the 19th century that freedom consists of the absolute right to use your property (including your slaves) however you may wish; any institution that impinges on this right is an agent of oppression, exploiting men of property on behalf of the undeserving masses.
Buchanan brought these influences together to create what he called public choice theory. He argued that a society could not be considered free unless every citizen has the right to veto its decisions. Any clash between “freedom” and democracy should be resolved in favour of freedom. In his book The Limits of Liberty, he noted that “despotism may be the only organisational alternative to the political structure that we observe”. Despotism in defence of freedom.
His prescription was a “constitutional revolution”: creating irrevocable restraints to limit democratic choice. Sponsored by wealthy foundations, billionaires and corporations, he developed a theoretical account of what this constitutional revolution would look like, and a strategy for implementing it.
He explained how attempts to desegregate schooling in the American south could be frustrated by setting up a network of state-sponsored private schools. It was he who first proposed privatising universities, and imposing full tuition fees on students: his original purpose was to crush student activism. He urged privatisation of social security and many other functions of the state.
He sought to break the links between people and government, and demolish trust in public institutions. He aimed, in short, to save capitalism from democracy.
In 1980, he was able to put the programme into action. He was invited to Chile, where he helped the Pinochet dictatorship write a new constitution. Amid the torture and killings, he advised the government to extend programmes of privatisation, austerity, monetary restraint, deregulation and the destruction of trade unions, which triggered economic collapse in 1982.
None of this troubled the Swedish Academy, which in 1986, through his devotee at Stockholm University Assar Lindbeck, awarded Buchanan the Nobel memorial prize for economics. It is one of several decisions that have turned this prize toxic.
The papers MacLean discovered show that Buchanan saw stealth as crucial. He told his collaborators that “conspiratorial secrecy is at all times essential”. Instead of revealing their ultimate destination, they would proceed by incremental steps. For example, in seeking to destroy the social security system, they would claim to be saving it, arguing that it would fail without a series of radical “reforms”. Gradually they would build a “counter-intelligentsia”, allied to a “vast network of political power” that would become the new establishment.
Through the network of thinktanks that Koch and other billionaires have sponsored, and through their transformation of the Republican party, Buchanan’s vision is maturing in the US. But not just there. Reading this book felt like a demisting of the window through which I see British politics. The bonfire of regulations highlighted by the Grenfell Tower disaster, the destruction of state architecture through austerity, the dismantling of public services, tuition fees and the control of schools: all these measures follow Buchanan’s programme to the letter.
In one respect, Buchanan was right: there is an inherent conflict between what he called “economic freedom” and political liberty. Complete freedom for billionaires means poverty, insecurity, pollution and collapsing public services for everyone else. Because we will not vote for this, it can be delivered only through deception and authoritarian control. The choice we face is between unfettered capitalism and democracy. You cannot have both.
Buchanan’s programme is a prescription for totalitarian capitalism. But at least, thanks to MacLean’s discoveries, we can now apprehend the agenda. One of the first rules of politics is, know your enemy. We’re getting there.
Despotism may be the only organisational alternative to the political structure that we observe