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June 1 - June 6, 2023
Charles Koch signaled his desire for the work he funded to be conducted behind the backs of the majority. “Since we are greatly outnumbered,” Koch
conceded to the assembled team, the movement could not win simply by persuasion. Instead, the cause’s insiders had to use their knowledge of “the rules of the game”—that game being how modern democratic governance works—“to create winning strategies.”
Translation: the American people would not support their plans, so to win they had to work behind the scenes, using a covert strategy instead of open declaration of what they really wanted.
The only fact that registered in his mind was the “collective” source of their power—and that, once formed, such movements tended to stick around, keeping tabs on government officials and sometimes using their numbers to vote out those who stopped responding to their needs. How was this fair to other individuals? How was this American?
It teaches that all such talk of the common good has been a smoke screen for “takers” to exploit “makers,” in the language now current, using political coalitions to “vote themselves a living” instead of earning it by the sweat of their brows.
Tracing such debates from the Colonial Era to the Civil War, Einhorn concluded, “American governments were more democratic, stronger, and more competent” where slavery was negligible or nonexistent. They were “more aristocratic, weaker, and less competent” where slavery dominated, as well as more likely to be captured by the wealthy few, who turned them to their own ends.
The university was the home of the Southern Agrarians, the literary men who in 1930 published a manifesto for southern rural life, I’ll Take My Stand. The “Twelve Southerners,” the collective authors on the spine, were mainly literary men, novelists and poets, remembered still for their call to preserve humane rural values from corruption by creeping industrialism and materialism. But their version of those values was racially exclusive, and their mission was profoundly political.
They would ennoble the scorned Confederate cause even if, as their correspondence reveals, it took willful blindness, outright falsification, and the highly strategic demeaning of African Americans to achieve it.
Yet what is notable in Buchanan’s formulation is the Davidson-like framing of the problem in regional terms that missed the most egregious impact of bigotry: on Catholics, Jews, Mexican Americans, working-class white men, and, above all, African Americans.17
that “the segregation decision” was a step too far that could lead to a “political realignment.” LeFevre predicted that “an aroused and embittered South” would find allies among northerners who wanted to fight federal overreach.19
For twenty years, Dean Ivey Lewis held sway over faculty hiring and the curriculum, without fail rejecting “applicants who might critically examine southern traditions, advocate environmental interventions to social problems, or otherwise disconcert the flourishing community of eugenicists he had installed at the university.”
When one set of rights—those of propertied whites—rarely, if ever, had to give way to any other rights, even when the inequity they inflicted on others (such as tar-paper-covered schools for black youths) far outweighed the damage they inflicted on those with property (slightly higher taxes), a system that started out with strong protections for property rights became, over time, a system where only property rights were protected. Indeed, only white property rights at that.
Indeed, even a sympathetic economist soon cited as “the major deficiency” of the Virginia school “the failure to search for empirical tests of the new theories.”13 The lack of proof, however, did not stop Buchanan and Tullock from offering what they considered the only right solution: to stanch the flow of money, change the incentives.
Pointing to the chaos of the Great Depression as the climax of structural changes that were leading to “economic oligarchy,” he argued that in the age of the large corporation, capitalism had shown that it would demolish itself and society unless constitutional reform precluded such “a state of anarchy” by ensuring economic security.
With Buchanan as intermediary, the Virginia Plan method would make its way across the Atlantic and eventually into the think tank advice with which Prime Minister Margaret Thatcher revolutionized British policy to achieve kindred ends.
In an attempt to deal with the backlash, his advisers insisted that he explain that he meant only to see Social Security “strengthened” and made “sound,” but most voters knew he had said what he meant originally. For many, the proposed alternative—investing their money in the stock market—raised painful memories of the crash of ’29, when families lost their life savings. For others, investing elsewhere was not an option, because they had never earned enough money to save for old age. Without Social Security, they could not get by.7
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].”
Goldwater won the Electoral College votes of only six states: his home state and five states of the Deep South that practiced acute voter suppression, among them Mississippi, where he garnered 87 percent of the almost entirely white vote.15
Similarly, Virginia school economists deployed the existing term “special interests” to refer primarily to organized citizens seeking government action and occasionally to corporations seeking legislative favor.
The point was not merely parsimony to save taxpayer money. Privately, Gordon Tullock and Jim Buchanan discussed the social control function of denying a liberal arts education to young people from lower-income families who had not saved to pay for it. “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.
Busy with other matters, “they devote relatively little time and effort in acquiring information about social policy alternatives”; rather, “they accept what they are told” by news sources they trust. And so it was incumbent on the cause to change what they were hearing and from whom. His vision was to start by converting people of power in domains that mattered: politics, business, the media, and the courts.3
The original Populists had extolled the ordinary men and women who produced needed goods by the sweat of their brows and reviled as “parasites” the mortgage bankers, furnishing merchants, and robber barons who lived in luxury by exploiting them. The People’s Party called on the federal government to intervene, as the only conceivable counterweight to the vast corporate power altering their society.
Among those recruited were the future Supreme Court Justice Anthony M. Kennedy, then a Sacramento attorney, as vice president, and a board of directors that mingled “sound” economists with agents of corporate interests such as the California Farm Bureau Federation and Shell Oil.
Within one generation, his plan “could turn the American legal system back into a productive and desirable channel,” the kind that had contained it before the Great Depression.
Of course, what happened to Fred Koch wasn’t rent-seeking behavior; it was criminal behavior. If Universal’s lawyers felt confident that the courts would have sustained their claims, then Universal would not have resorted to bribery. One can only wonder if the course of both Fred’s and Charles’s lives might have been somehow different had the judge in the case refused the bribe and heard the case on its merits.5
“Government in the United States is now taking from persons’ incomes an amount equivalent to the complete enslavement of 42 million persons,” Harper wrote in another work. “Compare that figure, and the concern about it, with the figure of 4 million privately-owned slaves in the United States at the outbreak of the War Between the States!” Why did so few see the outrage of it? “The power to tax is the power to destroy,”
“If in fact we seek what many do not wish, will we not be more successful if we take this into account and seek political institutions and policies that allow us to pursue our goals?” He did not equivocate, adding that this might mean “non-democratic” institutions and policies. One “possible route” Stigler suggested for achieving the desired future was “the restriction of the franchise to property owners, educated classes, employed persons, or some such group.”
He defined public choice as a “science” (even though he, of all people, knew that there was no empirical research to back its claims) that “should be adopted” for matters ranging from “the power of a constitution over fiscal policy” to “what the optimum number of lawmakers in a legislative body should be.”
Milton Friedman never lived down having advised the junta on how to combat inflation: protesters disrupted the 1976 award ceremony in Stockholm at which he received the Nobel Prize and hounded his speaking engagements thereafter.36 Whereas Friedman’s name became permanently and embarrassingly paired with Pinochet’s,
“Today there are two Chiles”: “one with credit cards and computers, and one that is just trying to survive.”42 Yet “Pinochet’s sinister constitution,” as the acclaimed refugee author Ariel Dorfman has called it, by design “mak[es] urgently needed reforms especially difficult to carry out.”43
That first elected government proposed and won overwhelming approval of fifty-four amendments, among them one to eliminate the requirement that supermajorities of two successive sessions of the congress must approve any future constitutional amendments. Yet the skewed electoral system still remains in place, with its provision effectively granting the one-third minority of right-wing voters the same representation as the typical two-thirds majority attracted by center-left candidates.
For his part, Buchanan came home from his consultation in Chile with a hunger to see radical change in his own country and a new sense of efficacy. He was finished with “the classic American syndromes, incrementalism and pragmatism.”
Convinced that he was meant, like an Ayn Rand hero, to be the dominant force in whatever he did, even going so far as to suggest at one point that his “embodiment of authority” was “genetically determined,” he didn’t have that many options when disagreement arose.
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.
As they began to hear their own ideas echoed in the statements of politicians, agency political appointees, and such respected publications as the Wall Street Journal, confidence grew among the cadre that the very terrain of public life could be altered without their ever having to argue openly for their real goals.
The project must aim toward the practical “removal of the sacrosanct status assigned to majority rule.”53
Like Buchanan, Manne rejected the idea of open searches for the best talent, in favor of hiring kindred thinkers, all white men who felt “underappreciated” at other schools.55
“Here was Jim Buchanan, a country boy from Middle Tennessee, educated in rural public schools and a local public teachers college, who is not associated with an establishment university, who has never shared the academically fashionable soft left ideology, who has worked in totally unorthodox subject matter with very old-fashioned tools of analysis, chosen by a distinguished and respected Swedish committee.”59
“This type of analysis has become universal in recent years,” the judges observed, with more aspiration than accuracy. (Indeed, the all-important judge Assar Lindbeck, a professor at Stockholm University, was himself a devotee of Buchanan’s diagnosis of what Lindbeck had called “Vote Purchasing Democracy” a few years earlier. Under his leadership, reports a study of the economic prize’s history, the committee “veered to the right in its awards.”)
one of the first acts of the new leadership was to hang a portrait of Virginia’s old warhorse Howard W. Smith in chamber where the Rules Committee met. Smith had been Harry Byrd’s alter ego in the U.S. House of Representatives. He had led the fight against the Wagner Act, “bottled up” the Fair Labor Standards Act, helped defeat President Harry Truman’s push for national health care, and tried to sink the Civil Rights Act.
As important, Bill Clinton’s legendary ability to “triangulate”—taking on as his own some of the goals they proposed while drawing the line against such extreme measures as a balanced budget amendment—took the steam out of the House GOP’s sails. To be repeatedly outwitted by Clinton, a president the radical right had spent much effort and untold treasure trying to undermine, made the sting of defeat all the more sharp.11
First, it had to create a pathway from here to there that could be executed in small, piecemeal steps that on their own polled well enough with the American people that they could win passage without raising the public’s ire. But each step had to connect back to the previous step and forward to the next one so that when the entire path was laid, all the pieces would reinforce the route to the ultimate destination. By then it would be too late for the American public to cry foul.
some of those piecemeal steps, no matter how prettified, could not be fully disguised, where necessary they had to be presented to the American public as the opposite of what they really were—as attempts to shore up rather than ultimately destroy—what the majority of Americans wanted, such as sound Medicare and Social Security programs.
He informed his assembled grantees that he wanted to “unleash the kind of force that propelled Columbus to his discoveries.”
Indeed, Koch concluded his challenge to them by equating the project to the Protestant Reformation, waged by Martin Luther against the corrupt hegemon of an earlier century.17
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.18
single-rate flat tax.22
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.”
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
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.
