The Buchanan-MacLean Controversy
The book, Democracy in Chains (with an even more lurid subtitle) by Nancy MacLean, a respected (until now) historian at Duke University makes a strong argument that the late James M. Buchanan of UVa, VaTech, and George Mason was the crucial link between the ancient states right racism of John C. Calhoun and the current Trump administration. From Calhoun, incredibly inaccurately labeled a “libertarian,” through the Agrarian Populist literary movement that was popular at Vanderbilt where Jim wanted to go but did not (he went to Middle Tennessee State, a poor boy claiming to be a “socialist,”), Buchanan becomes supposedly an effective supporter of racial segregation in Virginia in the 1950s, and then becomes the inspiration for all of later Austrian libertarianism, having attended the opening meeting of the Mont Pelerin Society in 1947 (where they chose to be called “neoliberals”), and then after founding the Thomas Jefferson Center for Political Economy at the University of Virginia, and then running to VA Tech in the early 70s, and then to George Mason in the early 80s, well, then he had a connection with the Koch Brothers, although this fell apart in the late 90s, but nevertheless he is the main link proving that Trump is a racist enemy of democracy.
This account has brought forth a massive counterattack from many current libertarians, much of it looking to me to be justified, involving many serious factual errors. I am not going to list them but note these sources for discussions of such matters: Munger, Horwitz, which includes other sources. I shall try to deal with matters not covered by them, noting that I largely agree with their critiques. The hard bottom line is that this may be a left version of rightist climate change denial: those reading this book need to be aware of how deeply flawed and erroneous it is, although it makes some valid points.
So what is valid? There is a very hard point that was not a main point in the book and has largely not been discussed, with most of the attention being on the deeply flawed account of Buchanan and G. Warren Nutter’s role in the matter of 1950s Virginia school desegregation (more on that later). The hard point is Buchanan’s role in Chile. MacLean is right that while there has been much been more publicity about the roles of Hayek and Friedman in Pinochet’s regime in Chile, Buchanan’s role there, nailed in by a crucial visit in 1980, may have been far more influential in forming the eventual constitution, although this happened well after the original coup by Pinochet in 1973. He played a key role in developing their constitution, which MacLean claims has anti-democratic elements that have in place defenses for the rights of capitalists that can only be overcome by two rounds of legislative votes. Yes, does put a pro-capitalist tilt in there, but two rounds of the legislature to overturn it? In fact it was accepted by a referendum and has been amended numerous times since and reestablished a parliamentary democracy. Does not exactly look like Stalin or Hitler or Mao or Kim Il Sung or something deserving the label “democracy in chains.”. But it is not pretty, given all the blood Pinochet spilled, and just like Hayek and Friedman, Buchanan has this matter on his late conscience, and it is notable that he never published anything on this, and aside from a meeting in Palo Alto right after he did it, he never publicly bragged about it or acknowledged it, although apparently he did so at that meeting. But maybe he realized that it was the stain on his career that it is, and he was in the end embarrassed about it and wished to cover it up.
The second matter is the most controversial, and indeed is the centerpiece of MacLean’s book. This is the matter of his role with Nutter in 1959 in the school desegregation issue in Virginia, the one point regarding which an actual professional economist has come out for MacLean, namely Brad DeLong. This is a much murkier matter, and after looking at it I see it as unclear with MacLean leaving out crucial details, quite aside from ignoring crucial exculpatory evidence, even as she has some case. This has to do with a report Buchanan and Nutter wrote to a specially appointed commission to deal with the school desegregation issue in 1959, in the context of Prince Edward County going for massive resistance against the 1954 Brown vs Board of Education SCOTUS ruling that led to the racial integration of public schools. I think Buchanan should have signed the petition of VA academics supporting that ruling, but he did not. His proposal with Nutter suggested allowing vouchers for private schools along with public schools, and MacLean and DeLong claim that this supported the effort to close down public schools in Prince Edward County. MacLean is right that at the time this did effectively support that movement, although the Buchanan-Nutter proposal did not call for ending public education, and Buchanan has been in many places on record supporting the existence of public education, if with private school competition in the form of vouchers.
This is the central part of the book’s argument, and it is the most heatedly debated, and I do not have the bottom line on it, although it looks to me that MacLean has overstated her argument. A crucial issue has to do with race, obviously. MacLean herself accepts that there is zero evidence that Buchanan was himself a racist and that all of this was just part of his supposedly libertarian/Koch/Trump view of the world. As it is, I think that whatever was really going on in 1959, the bottom line on Buchanan’s views is given on p. 56 of her book where she grants that he supported “voluntary” and “local” desegregation based on local conditions, which she then effectively dismisses with a remark that he did not know what was going on in Arkansas and elsewhere, a comment that looks to me to be seriously stupid, to be very blunt. Bottom line here is that Buchanan and Nutter may have effectively played a role in supporting the pro-segregationists in Virginia in 1959, but that was not their position.
What about major problems with MacLean’s arguments? I shall note three, starting with one noted by others and effectively granted by MacLean herself. This is the claim she makes in the final chapter that Tyler Cowen supports suppressing democracy. This is based on a quote she supplies that was definitely taken out of context, a context where it was clear that the content of the isolated quote was contradicted by what immediately followed it. Even those who have supported MacLean’s book on Facebook such as Gary Mongiovi have agreed that MacLean was simply out to lunch on this matter, although while she has recognized that the quote is problematic, she has not fully retracted her argument related to it. This is almost certainly tied to Cowen being director of the largely Koch-funded Mercatus Center at George Mason, with this being sort of the final piece de resistance of her book and argument, supposedly from racist anti-democratic John C. Calhoun to supposedly anti-democratic and implicitly racist Koch-funded libertarians at George Mason and Donald Trump.
A second problem reflects that MacLean is not an economist and seems to seriously misunderstand public choice theory, with her views on rent seeking being a strong example. In discussing rent seeking, a concept originated by Buchanan’s important coauthor, the late Gordon Tullock, and labeled by the centrist liberal development economist, Anne Krueger, she consistently identifies the supposed rent seekers as politicians seeking voting support from activist liberal groups such a unions and civil rights groups, especially the latter, whom the the supposedly anti-democratic tendencies of Buchanan are directed against. But in fact in public choice theory the rent seekers are priviate interest groups that use government to create artificial monopolies, which generate the rents these groups are seeking. It is really a quasi-Marxist view that sees capitalists using the government to enhance their corrupt profits. It is ironic that I have seen public choice economists show up at URPE social gatherings at meetings to discuss how they have this in common with the radical left URPE folks, opposition to corrupt use of the government by rent seeking private interests. I am not sure the URPE people were all that open when I saw this, but there is no doubt that MacLean simply is completely wrong here and totally misrepresents public choice theory on this point, although the strongly pro-free market stance of both Buchanan and Tullock can easily mislead people on this.
Finally we have her misuse of the term “libertarian,” which is also a central part of her argument, that there was this stream of essentially anti-democratic racist thought and action going straight from John C. Calhoun through the Agrarian Populist literary movement through James Buchanan and public choice theory to Koch-funded modern libertarians who are responsible for Trump and all he represents, an argument essentially made in the opening chapter, where she has Buchanan starting the Thomas Jefferson Center at UVa and his memo with Nutter being crucial centerpieces of this wholel strand. The problems with this are numerous. For starters, Buchanan never was a libertarian, even if he was somewhat sympathetic to their position, and he certainly was not a more radical anarcho-capitalist type of libertarian. Public choice theory does analyze how government agencies and actions may be corrupt and self-interested and involve rent seeking, but most public choice theorists certainly argue that the state has legitimate roles in society and the economy. Like the Austrian Hayek, whom Buchanan respected although he was not himself an Austrian, he preferred the label “classical liberal,” which MacLean at one point recognizes but simply dismisses as not being a useful term because of all the confusion with how Americans use the term “liberal.” But this was indeed what both Buchanan and Hayek called themselves. Hayek specifically rejected the term “libertarian” in his famous essay “Why I am not a Conservative,” with Buchanan himself later writing a similar one entitled “Why I am Also not a Conservative,” although MacLean for discussions of what was going on in Virginia in the 1950s that “libertarian” and “conservative” were essentially the same. Oog.
As it is, MacLean seems to be unaware that the origin of the term “libertarian” was originally from the left, coming out of France, with there actually being people who identified themselves as “libertarian communists” in the 1920s. There are still people who consider themselves to be “libertarian socialists,” with Noam Chomsky being perhaps the most prominent example. It was only in the 1950s that the term began to be used by people more on the political right than the political left, but still people like Hayek and Buchanan did not identify with it or use it for themselves.
This problem continues right up to the present situation, where indeed the Kochs claim to be libertarians, as does Tyler Cowen. I agree with her that they have been supporting many things I do not support and have been massively influential with their massive funding campaigns over a long time in many places. But I note that indeed they have supported some things I support out of their libertarianism, including prison reform, drug legalization, liberal approach to immigration, enlightened views on gay rights, and relatively dovish foreign policy, among some others, even as they support many other things I do not like, some of which Donald Trump supports, such as rolling back environmental regulations and crushing labor unions. But when MacLean links the Kochs with Trump there is indeed a further problems: they did not support him, certainly not in the GOP primaries, where reportedly they preferred pretty much anybody but him, although it would appear that they may have made at least some peace with him since he entered office. But they disagree with him on many of his policies, see the list above of things they support I agree with and which Donald Trump by and large disagrees with.
What this represents is something that MacLean is clearly unaware of but which is important, that there is a major split within the Austrian School of Economics and among libertarians themselves, with the public choice people really on the side of all this, something that makes her main argument all the more ridiculous. This is the split between the Rothardian-Misesians and the Hayekians. The former, more influenced by the late Murray Rothbard than by von Mises really, have their great base at the Ludwig von Mises Institute (LvMI) in Auburn, Alabama, whereas the latter pretty much have their main HQ these days at George Mason University, precisely the crowd that MacLean has her story end up with. These former are much more inclined to Trumpian views on race and immigration in particular, and they actually fit her main argument much better, also defending neo-Confederate “Paleo-Conservative” ideas. Thus they are fine with the argument that a business owner has the right to discriminate against someone on racial (or gender) grounds. Curiously one of the politicians closely linked to the LvMI who has expressed such views is none other than Ron Paul, who long opposed civil rights legislation when he was in the US Congress representing an East Texas district, and the longtime director of the LvMI, Rockwell, was his former chief of staff. These are the people who fit MacLean’s story, but the split between them and the George Mason Hayekians has been steadily widening, with the matter of Donald Trump adding to this, as basically none of the Masonites supported him, while quite a few of the LvMI crowd have done so. MacLean seems really to be amazingly misinformed and misguided about crucial aspects of this whole matter, quite aside from her errors regarding the work of the late James M. Buchanan himself.