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

by Nancy MacLean

No less a figure than Milton Friedman had extolled Buchanan’s potential.

When the Republicans would not agree to conduct hearings to consider the president’s nominee to fill the Supreme Court seat left vacant after Justice Antonin Scalia died in early 2016, even the usually reticent Supreme Court justice Clarence Thomas spoke out. “At some point,” he told the Heritage Foundation, a conservative think tank, “we are going to have to recognize that we are destroying our institutions.”

They revealed how the program Buchanan had first established at the University of Virginia in 1956 and later relocated to George Mason University, the one meant to train a new generation of thinkers to push back against Brown and the changes in constitutional thought and federal policy that had enabled it, had become the research-and-design center for a much more audacious project, one that was national in scope.

These included the Cato Institute, the Heritage Foundation, Citizens for a Sound Economy, Americans for Prosperity, FreedomWorks, the Club for Growth, the State Policy Network, the Competitive Enterprise Institute, the Tax Foundation, the Reason Foundation, the Leadership Institute, and more, to say nothing of the Charles Koch Foundation and Koch Industries itself.

there were no billionaires in the United States in 1956—only

What animated Buchanan, what became the laser focus of his deeply analytic mind, was the seemingly unfettered ability of an increasingly more powerful federal government to force individuals with wealth to pay for a growing number of public goods and social programs they had had no personal say in approving.

To Buchanan, what others described as taxation to advance social justice or the common good was nothing more than a modern version of mob attempts to take by force what the takers had no moral right to: the fruits of another person’s efforts. In his mind, to protect wealth was to protect the individual against a form of legally sanctioned gangsterism.

Buchanan believed with every fiber of his being that if what a group of people wanted from government could not, on its own merits, win the freely given backing of each individual citizen, including the very wealthiest among us, any attempt by that group to use its numbers to get what it wanted constituted not persuasion of the majority but coercion of the minority, a violation of the liberty of individual taxpayers.

The phrase originated in the Spanish Civil War, when one of Francisco Franco’s subgenerals in the military rebellion against the elected government, according to the contemporaneous New York Times report, “stated that he was counting on four columns of troops outside Madrid and another column of persons hiding within the city who would join the invaders as soon as they entered the capital.”32 Since then, the term “fifth column” has been applied to stealth supporters of an enemy who assist by engaging in propaganda and even sabotage to prepare the way for its conquest.

Those who are leading today’s push to upend the political system are heirs to a set of ideas that goes back almost two centuries: the pushback of imperious property against democracy. Its earliest coherent expression in America came in the late 1820s and ’30s, from South Carolina’s John C. Calhoun, a strategist of ruling-class power so shrewd that the acclaimed historian Richard Hofstadter dubbed him “the Marx of the master class.”1 Hofstadter’s label gestured, with his signature sense of irony, to the revolutionary nature of Calhoun’s strategy for how the wealthiest one percent (actually, far fewer) of his day could wield outsize power in a constitutional republic. A former vice president and, at the time he devised his plan, a U.S. senator, Calhoun was America’s first tactician of tax revolt, and arguably the nation’s most influential extremist.

Alexander Tabarrok and Tyler Cowen, two economics professors at the core of the operation funded and overseen by Charles Koch at George Mason University, Buchanan’s last home, have called the antebellum South Carolina senator “a precursor of modern public choice theory,” another name for the stream of thought pioneered by Buchanan. Both Buchanan and Calhoun, the coauthors observe, were concerned with the “failure of democracy to preserve liberty.” In particular, Buchanan and Calhoun both alleged a kind of class conflict between “tax producers and tax consumers.” Both depicted politics as a realm of exploitation and coercion, but the economy as a realm of free exchange. And both designed inventive ways to safeguard minority rights that went beyond the many protections already enshrined in the Constitution.2 Calhoun and Buchanan both devised constitutional mechanisms to protect an elite economic minority against “exploitation” by majorities of their fellow citizens, and advocated a minority veto power that, as the acolytes note, had “the same purpose and effect.”3 Both thinkers sought ways to restrict what voters could achieve together in a democracy to what the wealthiest among them would agree to.

“Calhoun’s insight,” Rothbard explained, was “that it was the intervention of the State that in itself created the classes and the conflict,” not the labor relations of the economy, as previous thinkers believed. Calhoun saw “that some people in the community must be net payers of tax funds, while others are net recipients.” (In today’s parlance, makers and takers.) By his theory, the net gainers of tax monies were “the ‘ruling class’ of the exploiters”; the net losers of tax funds were “the ‘ruled’ or the exploited.” In other words, Calhoun and Rothbard inverted how most people would construe who had power over whom. A man whose wealth came from slavery was a victim of government tax collectors, and poorer voters were the exploiters to watch out for.

By 1860, two of every three of the relatively few Americans whose wealth surpassed $100,000 lived below the Mason-Dixon Line. New York at that time had fewer millionaires per capita than Mississippi. South Carolina was the richest state in the Union. The source of southern wealth was staple crops—particularly cotton—produced by enslaved men, women, and children for world markets. So matchless were the profits that more money was invested in slaves than in industry and railroads.

Calhoun and his modern understudies are not wrong: there is a conflict between their vision of economic liberty and political democracy. Where they are allowed to, majorities will use the political process to improve their situations, and that can result in taxes being imposed on those with the wealth to pay them. The American people have used their power to do many significant things that required tax revenues: provide public education, develop manufacturing, build roads and bridges, create land-grant universities, protect the safety of food and drugs, enable workers to speak as one through unions, prevent old-age poverty, fight discrimination, assure the right to vote, and clean up our air and water, to name a few.

control. In South Carolina, he implemented a new style of state government with centralized power that, the legal historian Laura Edwards explained, was “a radical departure from the past.” Under his leadership, South Carolina became the one state in antebellum America furthest from the ideal of government of, by, and for the people. Another leading southerner judged it a “despot’s democracy.”14 Far from expressing the original intentions of the Constitution’s framers, then, Calhoun and his allies conceived a novel reshuffling of authority in the pursuit of more power for their class.

Kilpatrick wanted to be a rider. He had issued a startling suggestion when the students filed their lawsuit in 1951. It might soon be time, he announced, to “abandon tax-supported public education altogether.”26 In November 1955, in the wake of the Supreme Court’s Brown II, the implementation decree, Kilpatrick followed that call to privatize education with a crusade against federal “dictation.”

A commission appointed by the governor had accepted some of the proposals of the diehard segregationists—above all, tax-subsidized tuition grants. These vouchers, to use today’s language, would enable white parents who could not stand the idea of integration to send their children to segregated private schools, something only the richest could do without such financial help.

Senator Byrd was “an authentic aristocrat,” Time magazine observed. But as an ABC News investigative report in the 1950s revealed, he had become a very rich one in part by importing “cheap labor from the Caribbean” to work his land, despite “considerable local unemployment.” One federal official depicted aspects of the program “at worst as a modern counterpart to the slave trade, [and] at best as a system of indentured servants.” With no rights in America, the guest workers could be paid “$60 or less for a 60-hour week”—with transportation and other expenses deducted from their wages.

For Byrd, a property rights enthusiast, this was just the free market at work: abundant labor sellers willing to contract for less pay with an employer who could thus maximize his operation’s profitability. Such imported workers were desirable to big growers precisely because their employment was not subject to irritating “federal standards of living or working conditions.” By midcentury Byrd had become “the world’s largest individual apple orchard owner.”

Because the Byrd Organization favored policies that were against the majority’s interests, it was preoccupied with manipulating the rules for voting and representation. Among its tried-and-true tools was a poll tax that effectively kept most whites as well as nearly all blacks away at election time. The black electorate had plummeted to one-seventh of its earlier strength after the 1902 constitutional provisions aimed at it, but the provisions took out others, too.

For forty years, in fact, the Byrd Organization had to win only about 10 percent of the potential electorate to hold on to power. “Of all the American states, Virginia can lay claim to the most thorough control by an oligarchy,” the political scientist V. O. Key Jr. observed in his classic study of southern politics.

It was uncanny how well young Jim Buchanan’s notions of individual efficacy, group power, and government overreach fit with the teachings of the economics faculty of the University of Chicago. The school had been founded at the turn of the century by the oil industry magnate John D. Rockefeller and in its early years earned renown as a laboratory for social science in the service of progressive reform. But by 1946, when a twenty-seven-year-old Buchanan enrolled, the school’s president boasted to donors of having “the most conservative economics department in the world.”

Friedman’s avowed approach, if honored in the breach, was toward “positive” economics. Scholars should not make normative judgments in their work, he taught, but instead should develop a “science” through the mathematical testing of refutable hypotheses.

Darden knew precisely what Buchanan meant by “collectivist” solutions to social problems. His father-in-law was Irénée du Pont, the former president of the DuPont Company and one of the nation’s wealthiest men. He was also among the most right-wing of the rich. Du Pont so hated FDR that he had helped found the American Liberty League, in hopes of restoring an “employers’ paradise” by nipping the New Deal in the bud.

Members of the Mont Pelerin Society initially chose to refer to themselves as “neoliberals,” to signal the way they were retooling nineteenth-century pro-market ideas; it’s the name applied to them today by critics of the policies they advocated.

Andrews’s candidacy attracted not only segregationists from the white Citizens’ Councils of the Deep South but also other critics of what they called collectivism. In truth, the causes were hard to distinguish below the Mason-Dixon Line. Those who were interested were largely businessmen and professionals who considered themselves “the forgotten white majority . . . fighting for their life and liberty” against “the Socialistic trend,” in the words of Virginia’s J. Addison Hagan. He complained that leaders of both major parties had “been playing to the minorities such as Farmers, Unions, Negroes, and Jews” at the expense of “the white majority” whose “forebears made this country.”31 Other arch advocates of economic liberty beyond Dixie viewed the situation similarly and rallied to support the Virginian’s protest candidacy. Among them was Robert Welch, who two years later would recruit Andrews and others among his free-market backers, including the Notre Dame legal scholar and right-wing radio host Clarence Manion, to form the John Birch Society.

National Review editor William F. Buckley Jr. defended the governor’s actions, telling his readers that Faubus had been merely “interposing” his authority against the Supreme Court’s “tyranny.” Buckley condemned “the shameful spectacle of heavily armed troops patrolling . . . once tranquil towns.” The nine justices of the Supreme Court had created a situation that could “be settled only by violence and the threat of force.” And besides, Buckley said, the NAACP was exaggerating the mistreatment of the black students. What were “ugly epithets,” spitting, and being “pushed around” compared with “the picket-line practices of monolithic labor unions”?38 The “line of bayonets in Little Rock,” intoned Buckley, was what had always been hidden under “the maternal skirts” of “Mother Welfare State.” What civil rights, labor unions, and social insurance came down to in the end, Buckley warned, was the “army of occupation . . . enforcing unconditional surrender.”

Meanwhile, back in the county where Barbara Rose Johns first organized for fair treatment, and where officials continued to insist that they would abandon public education entirely rather than submit to “dictation” by federal courts, the Board of Supervisors voted a few weeks later to close the schools.39 That September, they padlocked every public school and opened new private schools for the white children while leaving some eighteen hundred black children with no formal education whatsoever. “It’s the nation’s first county,” reported the Wall Street Journal, “to go completely out of the public school business.” Local black youth remained schoolless from 1959 to 1964, when a federal court intervened to stop the abuse.

When John C. Calhoun made his case for minority veto power like that which Buchanan and Tullock were advocating, Madison made clear in unequivocal language that he rejected it, saying that to give “such a power, to such a minority, over such a majority, would overturn the first principle of free government, and in practice necessarily overturn the government itself.” Yet Buchanan understood that by claiming the imprimatur of Madison, and Jefferson, too, for his research agenda, he would be better able to fight off critics of the radical vision he was advancing.

The commission spread its message far and wide: that the federal government had been acting illegitimately since at least the 1930s—a school of thought that would later be called “the Constitution in Exile” and associated with Justice Clarence Thomas and others on the arch right.

It did not help his mood that Goldwater pulled down so many other GOP candidates that Lyndon Johnson, one of the most skilled political tacticians ever to sit in the Oval Office, was able to gloat that the incoming Congress “could be better, but not [on] this side of heaven.”20 This Congress would pass everything from work-study programs to help students work their way through college to Medicare and Medicaid, a War on Poverty, and laws to ensure clean air and water. Its crowning achievement was the Voting Rights Act of 1965, designed to allow every American citizen, at last, to participate in the political process.

Buchanan and his team remained at Virginia Tech, as it is now known, for more than a decade.

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.

As smart as Charles Koch was as an engineer and entrepreneur, socially he was not very adept; he would not marry until he was forty-one years old. With the business booming and nothing much else to take up his time other than what he called a “compulsion” to learn how the world worked, he devoted more and more of his time to reading books and articles that would enhance his “understanding [of] the principles that lead to prosperity and societal progress.” He restricted his study in only one way: to thinkers who believed as he did that the foundation upon which prosperity and social progress had to be built was unhampered capitalism. One work particularly influenced him: F. A. Harper’s Why Wages Rise, a free-market primer published in 1957.11

“Baldy” Harper is one of the least known names in the pantheon of radical right thinkers. But he was a founding member of the all-important Mont Pelerin Society and was Charles’s cherished mentor.

It was around this time—1970, to be exact—that Koch was admitted to the Mont Pelerin Society.

That sense of intellectual and even ethical superiority to others may help explain why Charles Koch bypassed Milton Friedman to make common cause with the more uncompromising James Buchanan. Koch referred to Friedman and the rest of the post–Hayek Chicago school of economics he led, as well as to Alan Greenspan, as “sellouts to the system.” Why? Because they sought “to make government work more efficiently when the true libertarian should be tearing it out at the root.”

Twenty-five years later, George Mason, now a university, recruited its first marquee professor: James McGill Buchanan.

Stockman had come to his work in the White House as an avid libertarian.

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. As important was what he said next. “It shouldn’t have been tried.” The correct inference from the episode, Stockman concluded, was that voters must be told the truth. 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.

The move to George Mason had been a godsend. It was easy to cross the Potomac to speak with political leaders and their staff members or to bring them into Northern Virginia to attend programs. With supportive donors, Buchanan’s center made use of its new site to attract and train many more foot soldiers for the cause. Among the most lastingly important of the many trainees was Stephen Moore, an early M.A. alumnus hired by the Heritage Foundation’s program on budgetary affairs, where he worked throughout the eighties, in the first of many such movement positions. In 1987, Moore was named research director of President Reagan’s Commission on Privatization. In time he would move on to the Wall Street Journal editorial board, where he gained a platform from which to promote the cause to its most important audience: power brokers and potential donors who could benefit from its success.

Was it the high energy he saw coming out of Buchanan’s team that led Charles Koch to move the institution nearest to his heart, the Institute for Humane Studies, from California to George Mason at mid-decade?

Charles Koch, Liggio’s boss, became a more regular campus visitor after the IHS moved to George Mason.

Liggio reported that “IHS has been working with the Federalist Society for several years”—that is, since roughly its creation with inspiration from Ed Meese.

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.

Notably, the ten-year agreement, lasting until 2008, made Buchanan and Koch, rather than Buchanan and Fink, the cochairs of the governing board of the combined center. According to its charter document, the center’s nonprofit, tax-deductible mission was “conducting world-class research, education and outreach on political economy and related topics.”

This fund-raising appeal was not just a deviation from academic norms and from the more scholarly fund-raising efforts Buchanan had spearheaded his entire academic career; it may have broken the law. The center had been chartered as a nonprofit entity, a 501(c)(3), which made it a tax-deductible charity for IRS purposes—a status that requires abstention from partisan activity.

When the waters calmed, Ed Meese, now the rector of GMU’s Board of Visitors, charged with university oversight, awarded Charles Koch and James Buchanan each a George Mason Medal, the institution’s highest honor, for contributions to “our nation and the world.”

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.”

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.”