Democracy in Chains Read online

  ALSO BY NANCY MACLEAN

  Freedom Is Not Enough

  Behind the Mask of Chivalry

  VIKING

  An imprint of Penguin Random House LLC

  375 Hudson Street

  New York, New York 10014

  penguin.com

  Copyright © 2017 by Nancy MacLean

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  ISBN 9781101980965 (hardcover)

  ISBN 9781101980989 (e-book)

  Version_1

  For my teachers

  The public choice revolution rings the death knell of the political “we.”

  —Pierre Lemieux1

  CONTENTS

  Also by Nancy MacLean

  Title Page

  Copyright

  Dedication

  Epigraph

  INTRODUCTION: A Quiet Deal in Dixie

  PROLOGUE: The Marx of the Master Class

  CHAPTER 1: There Was No Stopping Us

  PART I: THE IDEAS TAKE SHAPE

  CHAPTER 2: A Country Boy Goes to the Windy City

  CHAPTER 3: The Real Purpose of the Program

  CHAPTER 4: Letting the Chips Fall Where They May

  CHAPTER 5: To Protect Capitalism from Government

  CHAPTER 6: A Counterrevolution Takes Time

  CHAPTER 7: A World Gone Mad

  PART II: IDEAS IN ACTION

  CHAPTER 8: Large Things Can Start from Small Beginnings

  CHAPTER 9: Never Compromise

  CHAPTER 10: A Constitution with Locks and Bolts

  CHAPTER 11: Democracy Defeats the Doctrine

  CHAPTER 12: The Kind of Force That Propelled Columbus

  PART III: THE FALLOUT

  CONCLUSION: Get Ready

  Acknowledgments

  Notes

  Bibliography

  Index

  INTRODUCTION

  A QUIET DEAL IN DIXIE

  As 1956 drew to a close, Colgate Whitehead Darden Jr., the president of the University of Virginia, feared for the future of his beloved state. The previous year, the U.S. Supreme Court had issued its second Brown v. Board of Education ruling, calling for the dismantling of segregation in public schools with “all deliberate speed.” In Virginia, outraged state officials responded with legislation to force the closure of any school that planned to comply. Some extremists called for ending public education entirely. Darden, who earlier in his career had been the governor, could barely stand to contemplate the damage such a rash move would inflict. Even the name of this plan, “massive resistance,” made his gentlemanly Virginia sound like Mississippi.

  On his desk was a proposal, written by the man he had recently appointed chair of the economics department at UVA. Thirty-seven-year-old James McGill Buchanan liked to call himself a Tennessee country boy. But Darden knew better. No less a figure than Milton Friedman had extolled Buchanan’s potential. As Darden reviewed the document, he might have wondered if the newly hired economist had read his mind. For without mentioning the crisis at hand, Buchanan’s proposal put in writing what Darden was thinking: Virginia needed to find a better way to deal with the incursion on states’ rights represented by Brown.

  To most Americans living in the North, Brown was a ruling to end segregated schools—nothing more, nothing less. And Virginia’s response was about race. But to men like Darden and Buchanan, two well-educated sons of the South who were deeply committed to its model of political economy, Brown boded a sea change on much more.

  At a minimum, the federal courts could no longer be counted on to defer reflexively to states’ rights arguments. More concerning was the likelihood that the high court would be more willing to intervene when presented with compelling evidence that a state action was in violation of the Fourteenth Amendment’s guarantee of “equal protection” under the law. States’ rights, in effect, were yielding in preeminence to individual rights. It was not difficult for either Darden or Buchanan to imagine how a court might now rule if presented with evidence of the state of Virginia’s archaic labor relations, its measures to suppress voting, or its efforts to buttress the power of reactionary rural whites by underrepresenting the moderate voters of the cities and suburbs of Northern Virginia. Federal meddling could rise to levels once unimaginable.

  James McGill Buchanan was not a member of the Virginia elite. Nor is there any explicit evidence to suggest that for a white southerner of his day, he was uniquely racist or insensitive to the concept of equal treatment. And yet, somehow, all he saw in the Brown decision was coercion. And not just in the abstract. What the court ruling represented to him was personal. Northern liberals—the very people who looked down upon southern whites like him, he was sure—were now going to tell his people how to run their society. And to add insult to injury, he and people like him with property were no doubt going to be taxed more to pay for all the improvements that were now deemed necessary and proper for the state to make. What about his rights? Where did the federal government get the authority to engineer society to its liking and then send him and those like him the bill? Who represented their interests in all of this? I can fight this, he concluded. I want to fight this.

  Find the resources, he proposed to Darden, for me to create a new center on the campus of the University of Virginia, and I will use this center to create a new school of political economy and social philosophy. It would be an academic center, rigorously so, but one with a quiet political agenda: to defeat the “perverted form” of liberalism that sought to destroy their way of life, “a social order,” as he described it, “built on individual liberty,” a term with its own coded meaning but one that Darden surely understood. The center, Buchanan promised, would train “a line of new thinkers” in how to argue against those seeking to impose an “increasing role of government in economic and social life.”1

  He could win this war, and he would do it with ideas.

  While it is hard for most of us today to imagine how Buchanan or Darden or any other reasonable, rational human being saw the racially segregated Virginia of the 1950s as a society built on “the rights of the individual,” no matter how that term was defined, it is not hard to see why the Brown decision created a sense of grave risk among those who did.2 Buchanan fully understood the scale of the challenge he was undertaking and promised no immediate results. But he made clear that he would devote himself passionately to this cause.

  Some may argue that while Darden fulfilled his part—he found the money to establish this center—he never got much in return. Buchanan’s team had no discernible success in decreasing the federal government’s pressure on the South all the way through the 1960s and ’70s. But take a longer view—follow the story forward to the second decade of the twenty-first century—and a different picture emerges, one that is both a testament to Buchanan’s intellectual powers and, at the same time, the utterly chilling story of the ideological origins of the single most powerful and least understood threat to democracy today: the attempt by the billionaire-backed radical right to undo democratic governance.

  For what becomes clear as the story moves forward decade by decade is that a quest that began as a quiet attempt to prevent the state of Virginia from having to meet national democratic standards of fair treatment and equal protection under the law would,
some sixty years later, become the veritable opposite of itself: a stealth bid to reverse-engineer all of America, at both the state and the national levels, back to the political economy and oligarchic governance of midcentury Virginia, minus the segregation.

  Alas, it wasn’t until the early 2010s that the rest of us began to sense that something extraordinarily troubling had somehow entered American politics. All anyone was really sure of was that every so often, but with growing frequency and in far-flung locations, an action would be taken by governmental figures on the radical right that went well beyond typical party politics, beyond even the extreme partisanship that has marked the United States over the past few decades. These actions seemed intended in one way or another to reduce the authority and reach of government or to diminish the power and standing of those calling on government to protect their rights or to provide for them in one way or another.

  Some pointed to what happened in Wisconsin in 2011. The newly elected governor, Scott Walker, put forth legislation to strip public employees of nearly all their collective bargaining rights, by way of a series of new rules aimed at decimating their membership. These rules were more devilishly lethal in their cumulative impact than anything the antiunion cause had theretofore produced. What also troubled many people was that these unions had already expressed a readiness to make concessions to help the state solve its financial troubles. Why respond with all-out war?

  Over in New Jersey, where Governor Chris Christie started attacking teachers in startlingly vitriolic terms, one headline captured the same sense of bewilderment among those targeted: “Teachers Wonder, Why the Heapings of Scorn?”3 Why indeed?

  Equally mysterious were the moves by several GOP-controlled state legislatures to inflict flesh-wounding cuts in public education, while rushing through laws to enable unregulated charter schools and provide tax subsidies for private education. In Wisconsin, North Carolina, Louisiana, Mississippi, and Iowa, these same GOP-controlled legislatures also took aim at state universities and colleges, which had long been integral components of state economic development efforts—and bipartisan sources of pride. Chancellors who dared to resist their agenda were summarily removed.4

  Then came a surge of synchronized proposals to suppress voter turnout. In 2011 and 2012, legislators in forty-one states introduced more than 180 bills to restrict who could vote and how. Most of these bills seemed aimed at low-income voters, particularly minority voters, and at young people and the less mobile elderly. As one investigation put it, “the country hadn’t seen anything like it since the end of Reconstruction, when every southern state placed severe limits on the franchise.”5

  The movement went national with its all-out campaign to defeat the Obama administration’s Affordable Care Act. Hoping to achieve consensus, the White House had worked from a plan suggested by a conservative think tank and tested by Republican Mitt Romney when he was governor of Massachusetts. Yet when the plan was presented to Congress, opponents on the right almost immediately denounced it as “socialism.” When they could not prevent its passage, they shut down the government for sixteen days in 2013 in an attempt to defund it.

  Numerous independent observers described such stonewalling, vicious partisanship, and attempts to bring the normal functioning of government to a halt as “unprecedented.” 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.”6

  But what if the goal of all these actions was to destroy our institutions, or at least change them so radically that they became shadows of their former selves?

  Many people tried to get a better handle on what exactly was driving this sortie from the right. For example, William Cronon, a University of Wisconsin historian and the incoming president of the American Historical Association, did some digging after Governor Walker’s attack on public employee unions in Wisconsin. His investigations convinced him that what had happened in Wisconsin did not begin in the state. “What we’ve witnessed,” he said, is part of a “well-planned and well-coordinated national campaign” (italics added). Presciently, he suggested that others look into the funding and activities of a then little-known organization that referred to itself as the American Legislative Exchange Council (ALEC) and kept its elected members a secret from outsiders. It was producing hundreds of “model laws” each year for Republican legislators to bring home to enact in their states—and nearly 20 percent were going through. Alongside laws to devastate labor unions were others that would rewrite tax codes, undo environmental protections, privatize many public resources, and require police to take action against undocumented immigrants.7 What was going on?

  In 2010, the brilliant investigative journalist Jane Mayer alerted Americans to the fact that two billionaire brothers, Charles and David Koch, had poured more than a hundred million dollars into a “war against Obama.” She went on to research and document how the Kochs and other rich right-wing donors were providing vast quantities of “dark money” (political spending that, by law, had become untraceable) to groups and candidates whose missions, if successful, would hobble unions, limit voting, deregulate corporations, shift taxes to the less well-off, and even deny climate change.8 But still missing from this exquisitely detailed examination of the money trail was any clear sense of the master plan behind all these assaults, some sense of when and why this cause started, what defined victory, and, most of all, where that victory would leave the rest of us.

  In an attempt to find that master plan, to understand whose ideas were guiding this militant new approach, others attempted to link what was happening to the ideas of the celebrity intellectuals of the so-called neoliberal right (neoliberal because they identify with the eighteenth- and nineteenth-century pro-market liberalism of thinkers such as Adam Smith)—especially such avid promoters as Milton Friedman, Ayn Rand, and Friedrich A. Hayek.9 But such inquiries ran aground, because none of the usual suspects had sired this campaign. The missing piece of the puzzle was James McGill Buchanan.

  This, then, is the true origin story of today’s well-heeled radical right, told through the intellectual arguments, goals, and actions of the man without whom this movement would represent yet another dead-end fantasy of the far right, incapable of doing serious damage to American society.

  • • •

  I discovered Buchanan’s formative role in the rise of this distinctive strand of the radical right by sheer serendipity, not intentional pursuit. I am a historian of American social movements and their impact on public policy. About ten years ago, I became interested in Virginia’s decision to issue state-subsidized education vouchers to fund enrollment in all-white private schools in the aftermath of Brown. The thinker most associated with vouchers at that time was Milton Friedman, so I began to read his work and examine his papers. Twice, though, I came across a footnote pointing to another economist named James McGill Buchanan, who had founded what some called the Virginia school of political economy. Although I had not previously heard of him, he seemed to be someone with big ideas that somehow differed from Friedman’s, even as they played on the same team.10 Given the Virginia connection, I thought I should know more about him and began to read his work, too. When I learned of an unlisted archive located at George Mason University’s Fairfax, Virginia, campus that held his papers, I decided to pay it a visit in 2013, after Buchanan’s death earlier that year.11

  Most archives house the papers of dozens, if not hundreds, of different individuals and organizations. There is invariably a full staff of trained archivists and various assistants who work tirelessly to collect, process, and make available to scholars their holdings. “Buchanan House” was different. It turned out to be an o
ld clapboard mansion on the grounds of George Mason University’s main campus, where this once revered figure and his colleagues had worked. Now it is all but deserted. Rooms that had once served as seminar spaces and sitting areas for meeting with visitors and donors were now filled with boxes of unsorted material from the dead man’s home. There were file cabinets everywhere—even, I soon learned, in a closet under a stairwell.

  When I entered Buchanan’s personal office, part of a stately second-floor suite, I felt overwhelmed. There were papers stacked everywhere, in no discernible order. Not knowing where to begin, I decided to proceed clockwise, starting with a pile of correspondence that was resting, helter-skelter, on a chair to the left of the door. I picked it up and began to read. It contained confidential letters from 1997 and 1998 concerning Charles Koch’s investment of millions of dollars in Buchanan’s Center for Study of Public Choice and a flare-up that followed. Catching my breath, I pulled up an empty chair and set to work.

  It took me time—a great deal of time—to piece together what these documents were telling me. 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. This project was no longer simply about training intellectuals for a battle of ideas; it was training operatives to staff the far-flung and purportedly separate, yet intricately connected, institutions funded by the Koch brothers and their now large network of fellow wealthy donors. 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. Others were being hired and trained here to transform legal understanding and practice on matters from health policy to gun rights to public sector employment. Still others were taking what they learned here to advise leading Republicans and their staffs, from Virginia governors to presidential candidates. The current vice president, Mike Pence, a case in point, has worked with many of these organizations over the years and shares their agenda.12