Democracy in Chains: The Deep History of the Radical Right's Stealth Plan for America

by Nancy MacLean

while the new George Mason master’s degree students would find jobs with think tanks and work their way up, particularly with the Koch-funded Cato Institute and the Scaife- and Coors-funded Heritage Foundation and the American Enterprise Institute.22

Yet despite their high hopes for the Reagan administration, ambitions for radical transformation ran aground far sooner than anyone expected.

Never a backslapper, James Buchanan had sought to tamp down the euphoria that swept the Mont Pelerin Society after the elections of Ronald Reagan, an...

“We should not be lulled to sleep by temporary electoral victories of politicians and parties that share our ideological commitments.” Success at the polls, while heartening, must not “distract attention away from the more fundamental issue of imposing new rules for limiting government.” Much as he admired Reagan—and he did, greatly—Buchanan understood that even such an ideologically driven presi...

But the actual work of coming up with a proposal for which programs to cut and which tax cuts to authorize fell to the revolution’s field general, budget director David A. Stockman.

the colossal Kemp-Roth tax cut, as it came to be known, would necessitate tearing up the social contract on a scale never attempted in a democracy. To this day, it is unclear how such a consequential misunderstanding occurred. Was it that the electoral wing of the Republican right had for so long racially coded “special interests” and “government spending” that they genuinely failed to realize that slashing on this scale would hurt not only poor blacks but also the vast majority of white voters, among them many millions of Republican voters?25

“A true economic policy revolution” of the size Reagan and the right had requested, David Stockman explained in the wake of its rout, “meant risky and mortal political combat with all the mass constituencies” who looked to Washington for help. They would have to fight “Social Security recipients, veterans, farmers, educators, state and local officials, [and] the housing industry,” with its mass market of middle-class buyers who relied on their mortgage tax deductions. The president could rail all he wanted about “welfare queens” and government “waste,” but Social Security, veterans’ benefits, and Medicare “accounted for over half the domestic budget”—and were dear to his followers. “Minimalist government” would “dislocate and traumatize” not a minority but the vast majority of Americans, in a “ruthless”—indeed, “bone-jarring”—way before delivering any of its promised benefits. And that was the summary not of a critic but of the policy’s primary salesman.26

Stockman represented one wing, a lonely one. He learned from this experience that the libertarian dream had been a dangerous illusion. Sure, “special interest groups do wield great power, but their influence is deeply rooted in local popular support.” Stockman concluded that trying to impose an ideologically driven “exacting blueprint” on the people of “a capitalist democracy” was a mistake of the highest order.

To have all the things they wanted, from clean air and water to retirement security (to say nothing of military power), Americans needed “a moderate social democracy,” and to get this, they needed to pay higher taxes. It was that simple: higher taxes could solve the problem, without permanent deficits or economic disaster.28

Abandoning any attempt to cut core entitlements significantly, but unwilling to give up on their promised huge tax cuts or on their desire for massive military spending, they went ahead with both, even though, as Stockman pointed out repeatedly, the outcome would be a fiscal train wreck. He was shocked: not one member of the president’s political team had studied the budget or had the slightest idea how it worked. When presented with dire news that confounded their hopes, they simply refused to believe the bothersome information. The result? By the time President Reagan left office, the deficit was three times larger than the one he inherited from Jimmy Carter. At $2.7 trillion, it was the worst in U.S. history: the national debt by 1989 accounted for 53 percent of gross domestic product.29 The path from refusal to face the outcome of their policy to denial of the human role in climate change would be a short one.

These libertarians seemed to have determined that what was needed to achieve their ends was to stop being honest with the public. Instead of advocating for them frontally, they needed to engage in a kind of crab walk, even if it required advancing misleading claims in order to take terrain bit by bit, in a manner that cumulatively, yet quietly, could begin to radically alter the power relations of American society. The program on which they tested this new strategy was Social Security.31

Social Security, as both Buchanan and Stockman had observed, was the linchpin of the American welfare state.32

well. “Those who seek to undermine the existing structure,” he advised, must do two things. First, they must alter beneficiaries’ view of Social Security’s viability, because that would “make abandonment of the system look more attractive.”35

The first group he defined as those already receiving Social Security benefits and (although Buchanan did not include them, his ideological heirs would) those nearing the age when they could begin to collect. These current recipients and those close to retirement (some said within ten years; more recently politicians on the right have suggested five years) should be reassured that their benefits would not be cut. This tactic Buchanan referred to as “paying off” existing claims. The reasoning behind it is vintage public choice analysis: as the citizens most attentive to any change in the system, they were the ones who would fight the hardest to preserve it. Getting them out of the struggle to preserve the system would greatly enfeeble the remaining coalition (to say nothing of the resentment their departure would cause among those who found they were being denied something others had secured for themselves).36

The second group, Buchanan coached, consisted of high earners. The plan here would be to suggest that they be taxed at higher rates than others to get their benefits, thus sullying the image of Social Security as an insurance program in the minds of the wealthy by making it look more like now-unpopular means-tested income transfer programs popularly understood as “welfare.” Progressives would likely fall for a proposal to make the wealthiest pay more, not realizing the damage that could do to Social Security’s support among group two. And if the message was repeated enough, such that the wealthy began to believe that others are not paying their fair share, they in turn would also become less opposed to altering the program.37

The third group would consist of younger workers. They needed to be constantly reminded that their payroll deductions were providing “a tre...

Finally, those who would just miss the cutoff for the old system should be targeted for short-term changes. As Buchanan put it, “those who seek to undermine the support of the system (over the longer term) would do well to propose increases in the retirement age and increases in payroll taxes,” so as to irritate recipients at all income levels, but particularly thos...

This “patchwork pattern of ‘reforms’” (the quotation marks around “reforms” were added by Buchanan, to make sure the message was clear that reform was not really the endgame) could tear asunder groups that hith...

In the case of Social Security, the answer was clear: the financial sector. The right was not against people putting away for their retirements. To the contrary, they wanted people to save, early and actively, for their own retirements as part of their philosophy of personal responsibility. They just wanted those savings taken out of the hands of the federal government and put into the hands of capitalists, just as was done in Chile. And to end employer contributions as Chile had.

accounts. Individual retirement accounts (IRAs), the report argued, were “a powerful vehicle for introducing a private Social Security system,” not least because the tax deductions granted for them had become popular. By thus “strengthen[ing] the coalition for privatizing Social Security,” backers of change would be better positioned to take advantage of any crisis in the system.42

The Cato team translated Buchanan’s ideas into a battle plan. The top priority was to assure current Social Security recipients that they would not lose anything; as “a very powerful and vocal interest group,” they required “neutralizing.”

Phase three would cultivate new partners in the private sector who would benefit from all that money being shifted to savings accounts and investment.45

For the libertarian right, Social Security privatization meant a savvy triple win, in which ideological triumph over the most successful and popular federal program was the least of the gains. First, it would break down citizens’ lived connection to government, their habit of believing it offered them something of value in navigating their lives. Second, it would weaken the appeal of collective organization by inducing fracture among groups that had looked to government for solutions to their common problems. But third and just as important, by putting a vast pool of money into the hands of capitalists, enriching them, it would both make them eager to lobby for further change and willing to shell out dollars to the advocacy groups leading the charge for change.

By the second half of the 1980s, the political scientist Jeffrey Henig has noted, privatization “moved from an intellectual fringe to become a centerpiece in contemporary public policy debates.” The Virginia school of political economy in particular helped effect “the intellectual de-legitimation of the welfare state,” which prepared the way for privatization and, with it, in the words of one enthusiast, “the goal of fundamentally and irreversibly changing” the nature of politics.48

Many liberals then and since have tended to miss this strategic use of privatization to enchain democracy, at worst seeing the proposals as coming simply from dogma that preferred the private sector to the public.49

Again and again, at every opportunity he had, he told his allies that no “mere changing of the political guard will suffice,” that “the problems of our times require attention to the rules rather than the rulers.” And that meant that real change would come “only by Constitutional law.” The project must aim toward the practical “removal of the sacrosanct status assigned to majority rule.”53

The cause would be helped along, too, by the fact that popular trust in government was dropping precipitously. The fall was due above all to the conduct of elected officials, from Lyndon Johnson’s lying about the war in Vietnam to Richard Nixon’s Watergate crimes.

National Review marveled at the “sea change” Buchanan’s work had produced in economists’ thinking about government, making reliance on it “seem not nearly so credible as in the Fifties or Sixties.”

To name just one index of how successful Manne had been: by 1990, more than two of every five sitting federal judges had participated in his program—a stunning 40 percent of the U.S. federal judiciary had been treated to a Koch-backed curriculum.

Excessive “government regulation of business” was an overarching theme, with the biggest threat, the two men now determined, coming from the environmental movement. Because environmentalists were, in the eyes of Manne and Buchanan, on a “quest for control over industry,” they had to be not merely defeated, but defamed, with their personal “hidden agenda” exposed.19

Another absolutely critical target for the new century, they agreed, should be education. As “the most socialized industry in the world,” the GMU team complained, public schools, from kindergarten through university, nurtured “community values, many of which are inimical to a free society.” Its continuing dominance was an affront to the cause that, since Milton Friedman’s 1955 manifesto, had sought to end the “government monopoly” of schooling.23

Finally, the golden anniversary discussions should also figure out how to deal with feminism, which the men found to be “heavily socialistic for no apparent reason.”24 A kind of cultural war was therefore in order against this movement that relied so heavily on government action.25

But whom they defined as the “enemy” may surprise you. It was not, as most of us would assume, liberalism. It was socialism.

Socialism, as the Mont Pelerin Society members defined the term, was synonymous with any effort by citizens to get their government to act in ways that either cost money to support anything other than police and military functions or encroached on private property rights. By that definition, socialism was indeed alive and well in the 1990s.

the National Voter Registration Act “was

forty-year process of nationalizing the voting laws and removing obstacles to the ballot box” that had been put in place from the 1850s to World War I to deter nonelite voters.

By 1997, nine million net new voters had joined the electorate.28

depicted Buchanan as “perhaps the most hated and feared enemy of left-leaning economists throughout the world.”2

The core claim of this movement—certainly Buchanan’s core claim going all the way back to Brown—was that government did not have the right to “coerce” the individual, beyond the basic level of the rule of law and public order.

And second, under the influence of one wealthy individual in particular, the movement was turning to an equally troubling form of coercion: achieving its ends essentially through trickery, through deceiving trusting people about its real intentions in order to take them to a place where, on their own, given complete information, they probably would not go. This was not classical liberalism, no matter how often cadre members claimed that mantle.

It is a contradiction in terms to remain a self-governing intellectual and be part of a messianic movement. Messiahs don’t entertain doubts. I suspect Rowley felt the change under way; if it didn’t bother others about themselves, it bothered him about himself.4

Rowley said what others never dared to admit: “Far too many libertarians have been seduced by Koch money into providing intellectual ammunition for an autocratic businessman.” It had reached the point, he came to believe by 2012, that there was no hope that any of those who participated in the “free market think tanks” would “speak out.” He was blunt about the reason why: “Too many of them benefit financially from the pocket money doled out by Charles and David Koch.”

Watching how Koch commandeered the Cato Institute for his “crude” plan to speed up the libertarian conquest of America by using the very governmental apparatus that libertarians had long criticized made him angry. He saw, too, that Koch had “no scruples concerning the manipulation of scholarship”; he wanted Cato’s output to aid his cause, period. When a few veteran libertarian board members and staff raised questions, he replaced them with his own people, who now included the kind of “social conservatives” and political party figures who were once anathema to libertarians.

The acclaimed jurist Louis Brandeis, who over the course of his lifetime amassed considerable wealth, once warned the American people that as a nation, “we must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

“If you tell a great lie and repeat it often enough, the people will eventually come to believe it,” Joseph Goebbels, a particularly ruthless, yet shrewd, propagandist, is said to have remarked.

Attend a Tea Party gathering and you will hear endless cries about the “moocher class.”11 Read the output of the libertarian writers subsidized by wealthy donors and you will encounter endless variations. David Boaz of the Cato Institute, to choose just one, speaks of the “parasite economy” that divides us into “the predators and the prey.”12 Addressing an audience of $50,000-per-plate donors, Mitt Romney famously remarked that “47 percent” of voters were, in effect, leeches on “productive” Americans.13

The largely African American population of Flint, Michigan, knows firsthand what will happen to “people who fall by the wayside” in the new political economy run by people who think this way.

“For 18 months, 100,000 residents were exposed to toxic water,” explained one Ph.D. student. No amount of lead in water is safe, especially for children, whose developing brains and bodies are so vulnerable; exposure can cause irreversible mental impairment.23

What happened in Flint was not a natural disaster. Nor a case of governmental incompetence. What happened there was directly attributable to the prodding of the Mackinac Center, one of the first Koch-funded—and in this case, Koch-staffed—state-level “think and do” tanks that now exist in all fifty states and are affiliated with the State Policy Network (SPN), also Koch-concocted, to coordinate efforts to prevent state governments from responding to the demands of the “takers.”24

“When the Mackinac Center speaks, we listen,” said Michigan governor John Engler in 1994. Indeed, so did his successors. In 2011, the center pushed hard for legislation that would allow the governor to take over all aspects of local government in any community facing a “financial emergency” and hand control over to an emergency manager. The powers of these unelected managers to impose austerity measures would be vast, including the authority to unilaterally abrogate collec...