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July 18 - July 25, 2020
“the chaos,” the authors implied that the unrest was being orchestrated by external revolutionaries, presumably white Communists, who engaged in “usage of black students” for their own ends—as though African American students had no cause to protest and no ability to lead their own fight. “The revolutionary adopts the black students as his most attractive allies,” wrote the economists;
Fred was a passionate advocate of so-called right-to-work laws. But what he is most remembered for is his cofounding of the John Birch Society
“The power to tax is the power to destroy,”
There was no mistaking libertarianism for conservatism at Cato’s 1977 founding.
“The ruling class” to be overthrown consisted of the leaders of labor unions, those corporations and business associations that continued to seek special benefits through lobbying, and the intellectuals who supported government action.
With enough gestures to the nation’s founding fathers, even Leninist libertarianism could be made to look appealingly all-American, like a restoration rather than the revolution it was.
Meanwhile, as the Cato Institute and the Reason Foundation set to work, Buchanan was hired by yet another Koch-backed organization, the Liberty Fund, to run what became annual summer conferences for the recruitment and training of young talent (defined as under age thirty-five, later upped to forty) in the social sciences. In essence, he was being asked to identify and begin preparing the intellectual cadre that Koch now believed was so critical to the cause’s success.
They found one: because candidates faced no limits on how much they could contribute to their own races, they could run David Koch for vice president on the ticket with Clark. In the end, Koch contributed $2 million to the $3.5 million campaign.
Because “both markets and governments fail,” the challenge was how to sort out what each arena did best, to find some middle ground in theory between pure laissez-faire (what he called anarchy) and dreaded socialism.
Other “modernizations” included the privatization of health care, the opening of agriculture to world market forces, the transformation of the judiciary, new limits on the regulatory ability of the central government, and the signature of both the Chicago and Virginia schools of thought: K–12 school vouchers.
Buchanan then visited for a week in May 1980, a pivotal moment, to provide in-person guidance. A few months earlier, the regime had begun a mass purge of teachers from the nation’s public universities, firing those considered “politically unreliable,”
Washington, D.C.’s Embassy Row, Chile faced U.S. sanctions for having carried out a terrorist act.
“We are formulating constitutional ways in which we can limit government intervention in the economy and make sure it keeps its hand out of the pockets of productive contributors.”
The devil is in the details, goes the old adage, and it is true: the wicked genius of Buchanan’s approach to binding popular self-government was that he did it with detailed rules that made most people’s eyes glaze over.
Election rules forbade electioneering by “no” activists. When some individuals flouted the ban by leafleting and inviting people to a speech by the former Christian Democratic president Eduardo Frei, nearly sixty found themselves arrested; some were tortured. “With my own eyes,” reports a political scientist and later ambassador, “I saw people being dragged off a public bus and beaten for shouting, ‘Vote “no” on the charter!’”
After the North Carolina senator visited with Pinochet in 1986 and came home defending the junta from critics, the Raleigh Times mockingly urged a public collection to buy him better glasses and a hearing aid, because the senator was “deaf, blind, and dumb to official policies of corruption and torture.”
wealthy funders who might help effect it. From this we can only conclude that he was well aware of the Pandora’s box he had helped open in Chile for the genuine, not merely metaphorical, corruption of politics, but he valued economic liberty so much more than political freedom that he simply did not care about the invitation to abuse inherent in giving nearly unchecked power to an alliance of capital and the armed forces.
cost,” explains one political scientist. “Whereas in 1970, only 23 percent of the population was classified as poor or indigent, by 1987 that proportion had reached 45 percent—almost half—of the population,” while wealth had become more concentrated among the richest.
“Precarious and low-income work [became] the staple for over 40 percent of the Chilean labor force,” a marginality compounded by the fact that individuals were now forced to save the full cost of their retirement pensions, with no contribution by their employers, and pay for other goods that had previously come with citizenship.
is deeply troubling, then, that Chile is held up today as an exemplary “economic miracle” by the Cato Institute, the Heritage Foundation, and others on the U.S. right.
nation that once stood out as a middle-class beacon in Latin America now has the worst economic inequality it has seen since the 1930s—and the worst of the thirty-four member states in the Organization for Economic Cooperation and Development (OECD). Yet even among those who have profited most from the concentration of wealth, a feeling has spread that the chasm between those favored under the new rules and those hurt is “immoral.”
Meanwhile, college tuition costs now equal 40 percent of the average household’s income, making a higher education in Chile the most expensive
Fink did his best to get the George Mason graduate students “hyped up,” as one fondly put it—more militant, that is, in their advocacy. “We’re gonna be like Malcolm X,” Fink goaded them. Except where Malcolm X promoted Black Power and pride, the GMU alumni would be “Austrian and proud.” He urged that they be “in your face with the Austrian economics.”
It was the style Koch had longed for when he warned that in order to excite smart young people, the cause must never compromise. Buchanan predicted to the patron, more aptly than he could have imagined, “Richie Fink will make his mark in the years ahead.”
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?
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.
What was not evident then but is now is that this moment became a turning point in the Republican Party, the prod for a historic, albeit unnoticed, three-way split.
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
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.
“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.”
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.
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.”
The third group would consist of younger workers. They needed to be constantly reminded that their payroll deductions were providing “a tremendous welfare subsidy” to the aged.
“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 those who are just on the wrong side of the cutoff and now would have to pay more and work longer.
Better still, Buchanan noted, the member groups of the once unified coalition that protected it might be induced by such changes to fight one another. When that happened, the broad phalanx that had upheld the system for a half-century might finally fracture.
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.
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
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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 Those driving the train knew otherwise. Privatization was a key element of the crab walk to the final, albeit gradual, revolution—the ends-justify-the-means approach that allowed for using disingenuous claims to take terrain that would make the ultimate project possible.
Back home in the United States, Buchanan’s ideas were producing “a quiet revolution in politico-economic thinking,” observed the New York Times—“quiet” because their “public recognition quotient is near zero.”
What Charles Koch concluded is not recorded in the available documentation, but what we do know is this: rather than throw up his hands in despair, he decided to double down and “speed up the whole process” of radical transformation.
“Any modern democracy’s tax policy” was likewise trouble, because the voters’ “inevitable egalitarian instincts” would lead them, if unobstructed, to “redistribution.”21 To solve this problem, they had to bring about the end of the graduated income tax adopted after 1913 with passage of the Sixteenth Amendment, in favor of a single-rate flat tax.
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
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the Nobel Laureate was too savvy not to know that this and the minor changes made at his request were face-saving gestures to soothe his wounded pride. He was no longer in charge, not even of the center that bore his name. Rather than face such a future, Jim Buchanan effectively retired to the log cabin where he had first convened his Third Century project. When he died in 2013, neither Koch nor Fink, nor Cowen nor Meese, bothered to attend his memorial service.
plan to speed up the libertarian conquest of America by using the very governmental apparatus that libertarians had long criticized made him angry.
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.
James Buchanan revealed just how bitter the medicine would be. People who failed to foresee and save money for their future needs, Buchanan wrote in 2005, “are to be treated as subordinate members of the species, akin to . . . animals who are dependent.”
And because “worthy individuals” will manage to climb their way out of poverty, “that will make it easier to ignore those who are left behind.” Cowen foresees that “we will cut Medicaid for the poor.” Also, “the fiscal shortfall will come out of real wages as various cost burdens are shifted to workers” from employers and a government that does less. To “compensate,” the chaired professor in the nation’s second-wealthiest county recommends, “people who have had their government benefits cut or pared back” should pack up and move to lower-cost states like Texas.
