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

by Nancy MacLean

In 1963, Buchanan and Tullock organized the first conference of what came to be called the Public Choice Society.

Men of the right all across Dixie were then working with like-minded organizers up north, among them those who had backed Virginia’s T. Coleman Andrews in his run for president in 1956, to make Arizona senator Barry Goldwater the next Republican presidential nominee.

Indeed, Professor Warren Nutter would become the candidate’s only full-time economic adviser, and Buchanan would teach five weeks of Nutter’s class so he could travel with the campaign.42

“Of course, we continue to be called ‘eccentric right-wingers,’” Buchanan informed Hayek in 1963, “but this does not especially bother us.”

How in the world could Goldwater articulate their shared view of the just society and still get elected? The man given “major staff responsibility for every one of the campaign’s important speeches,” as well as an equally important say in “every statement that left the [Republican] National Committee” in the campaign, “including political principles,” was Warren Nutter.

“I think we ought to sell the TVA [Tennessee Valley Authority],” the senator said. But that did not play well in Tennessee. “I have contributed to your campaign and helped organize the Goldwater club here, but since you have . . . come out . . . for the sale of the TVA, I am taking off my Goldwater stickers,” wrote a Chattanooga resident, one of thousands to recoil in alarm. “Why in the hell did you say that about the TVA?” an Atlanta fan demanded. “The Southeast will never vote for anyone who advocates turning over the TVA to the . . . monopolists.”

Friedman urged reliance instead on “free market principles”: prejudice would cause lower wages for black workers, which in turn would reduce production costs for those who employed them, so more employers would hire African Americans, he said—and, presto, “virtue triumph[s].”

Today Goldwater is best remembered for one line in his acceptance speech, the most uncompromising in major-party history, until recently. Critics of “our cause,” he suggested, could leave the GOP and take their “fuzzy” Republicanism with them. “I would remind you,” the nominee announced in his climax, “that extremism in the defense of liberty is no vice!”

Nearly a half century later, Milton Friedman still called the speech “splendid. I recall particularly relishing the sentence that came back to haunt Goldwater: ‘Extremism in the defense of liberty is no vice.’”14

When Election Day came, the cause’s standard-bearer suffered the worst defeat of any major-party presidential candidate in a century and a half.

Goldwater did best in the part of Virginia—like that of the nation as a whole—most resistant to civil rights reform: the old plantation counties that were most eager to, as officials of Prince Edward County had put it, get “out of the business of public education.”17

With such stalwarts of economic liberty out of power and an era of grand expectations opening, the Virginia General Assembly, in a nod to the new growth-minded business class and residents of the growing cities and suburbs, repealed the “pay as you go” requirements in the state constitution, which had put the Virginia of their day fiftieth in the nation in capital spending for health and welfare. Borrowing money to invest in public schooling and infrastructure in a way that would have been unimaginable with Byrd still in power, they turned Northern Virginia, especially, into a cornucopia of economic growth.23

Elected president of the Southern Economic Association in 1964, he used his bully pulpit to prescribe “what economists should do.” They should cease focusing on problems of resource distribution—what the field called “allocation problems”—because the very idea that inequality was a bad thing led to looking for remedies, which in turn led the discipline toward an applied “mathematics of social engineering.” Instead, they should adopt his radical methodological individualism in all that they studied, and assume that individuals always sought personal gain, whether in the economy or in politics.

Buchanan insisted that his hyper-individualistic method was ideologically “neutral.”40

What Buchanan was doing was leveraging the prestige of economic “science” to reject what several generations of scholarship in the social sciences, humanities, and law had exposed: that the late-nineteenth-century notion of a pure market was a fiction.

Richard T. Ely and John R. Commons, had demonstrated that social power shaped markets, and they debunked the thinkers such as Herbert Spencer who pretended otherwise. Ely, who had led in the 1885 founding of the American Economic Association, was blunt about the laissez-faire economics his generation aimed to supplant. “This younger political economy,” Ely said, “no longer permits the science to be used as a tool in the hands of the greedy and the avaricious for keeping down and oppressing the laboring classes.” No one who claimed the mantle of science should advocate “doing nothing while people starve.”41

“rent-seeking.”

Buchanan’s team, though, gave the concept a new and distinctive meaning, one in wide use on the right today. They depicted as “rent-seeking” any collective efforts by citizens or public servants to prompt government action that involved tax revenues. And, in their assumption that individuals always acted to advance their personal economic self-interest rather than collective goals or the common good, Buchanan’s school went further, projecting unseemly motives onto strangers about whom they knew nothing.

“special interests”

The scholars were conducting, in effect, thought experiments, or hypothetical scenarios with no true research—no facts—to support them, while the very terms of their analysis denied such motives as compassion, fairness, solidarity, generosity, justice, and sustainability.42

So Buchanan left. He accepted a regular faculty position at the University of California at Los Angeles,

He went despondently, knowing that he would no longer be the big fish able to make an outsize splash in a small pond. He also seemed uncomfortable about the number of African Americans living in the city and attending UCLA, commenting to Tullock after a visit to San Diego State about how there were “very few blacks in evidence” and the students seemed “more orderly” than UCLA’s.50 Equally dispirited, Warren Nutter left UVA to serve as President Nixon’s assistant secretary of defense for international security affairs.51 The program, the loyal alumnus James C. Miller III protested, had suffered “emasculation.”52

I felt that I had landed in a lunatic asylum,” trapped in “a world gone mad,” James Buchanan would say of his time at UCLA.

Not Buchanan. He believed that, in the short term, repression was the only appropriate immediate answer to the spreading student unrest. Despite “my long-held libertarian principles,” he said, looking back, “I came down squarely on the ‘law-and-order’ side” of things. He heaped praise upon one administrator who showed the “simple courage” to smash the student rebellion on his campus with violent police action.3

The problem with the university, according to Buchanan and Devletoglou, began with its distinctive structural features: “(1) those who consume its product [students] do not purchase it [at full-cost price]; (2) those who produce it [faculty] do not sell it; and (3) those who finance it [taxpayers] do not control it.”

Only measures modeled on corporate understandings of responsibility and order would work. Indeed, in the end, the problem was public ownership itself, which left no one clearly in charge and no one with the kind of direct personal incentives for maintenance that came from strictly defined property rights.

It is hard to read this manifesto and not see the blueprint for the right’s current fight to radically transform public higher education: to turn state universities into dissent-free suppliers of trained labor, run with firm managerial hands and with little or no input from faculty, and at the lowest possible cost to taxpayers.

Within a few months the economists had a book manuscript completed.

Whatever the reasons, publishing house after publishing house turned them down.

Academia in Anarchy was dedicated to “The Taxpayer.”

“The revolutionary adopts the black students as his most attractive allies,” wrote the economists; inciting them to achieve his own radical ends, he exploits white Americans’ “guilt complex.”

In his review of the book in National Review, Buchanan’s former colleague William Breit seconded the call for a “system of full tuition charges supplemented by loans which students must pay out of their future income.”13

“We may be producing a positively dangerous class situation,” Tullock said, by educating so many working-class youth who would probably not make it into management but might make trouble, having had their sights raised.14

It was only a matter of time before the lifelong southerner fled UCLA for the region where he felt at home.

Virginia Polytechnic Institute

His grateful employers granted his center “a mansion, formerly the university president’s residence, on a hill overlooking the campus.” Buchanan found there the unchecked liberty and lavish institutional regard he craved.

It was while Buchanan was at Blacksburg that he first got to know Charles Koch, opening a relationship of mutually beneficial exchange, as the economist might say, that reached fruition a quarter century later.

It even created a new subdivision called the Center for Economic Education, a prototype for future outreach efforts funded by Charles Koch and aimed at Washington, D.C., policymakers.

In the meantime, assigned to speak about education at the Munich meeting of the Mont Pelerin Society, Buchanan minced no words. Modern society, with its widespread affluence, was showing itself “willing to allow for the existence of parasites,” freeloaders who took from it without adding value. “This is essentially what the student class has already become,” he told the scholars, businessmen, and funders. “If we do not like what we see,” the “simple solution” was clear: “close off the parasitic option.”29

The demand for “tax justice,” as this campaign became known, proved popular, scoring successes at the local and state levels and inducing alarm on the right.2

What the cause needed, Buchanan told the men he brought together, was to “create, support, and activate an effective counterintelligentsia” to begin to transform “the way people think about government.”

The key thing moving forward, he stressed, was that “conspiratorial secrecy is at all times essential.”6

To give his listeners hope, the economist scanned the news hungrily for signs of popular malaise among taxpayers “against the oppression” of being forced, by the government, to “support unproductive and essentially parasitic members of society.”

black welfare recipients

laid-off steelworkers

students provided low-cost tuition at state colleges and universities, and retirees who received more from Social Security a...

The battle between “the oppressed and their oppressors,” as one People’s Party publication had termed it in 1892, was redefined in his milieu: “the working masses who produce” became businessmen, and “the favored parasites who prey and fatten on the toil of others” became those who gained anything from government without paying proportional income taxes. “The mighty struggle” became one to hamstring the people who refused to stop making claims on government.

Soon after the Richmond address, Buchanan and his trusted team organized a larger gathering in Los Angeles that included members of Governor Reagan’s inside circle, hoping to build relationships that would carry forward the grand strategy over the next forty years and more. The gathering included, alongside Buchanan’s scholarly allies and Richard Larry of Scaife, four members of Reagan’s team, among them his most trusted adviser and chief of staff, Edwin Meese III. “We are living on borrowed time,” the Virginia economist informed the assembled men, because America was “changing rapidly.” Strenuous behind-the-scenes organizing was the only hope.19

As an ICS fund-raising brochure noted, “Economics is an underlying concern if not the primary element of practically every social issue.”

Corporate donors concurred. By 1980, their ranks included Exxon, Mobil, Shell, Texaco, Ford, IBM, Chase Manhattan Bank, U.S. Steel, and General Motors, backed by the Olin, Scaife, and Smith Richardson Foundations.23