‘Democracy in Chains’: a US export that’s not as new as some might claim

On Wednesday I read George Monbiot’s most recent column in The Guardian* in which he briefly discusses James McGill Buchanan, a man who features prominently in US historian Nancy MacLean’s new book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. As Monbiot notes, McLean’s book makes what has previously been largely invisible to the vast majority of people (including it has to be said many politicians) visible, and the title of his piece pulls no punches as to why: ‘A despot in disguise: one man’s mission to rip up democracy’. Monbiot continues with a sub-heading in which he notes that ‘…Buchanan’s vision of totalitarian capitalism has infected public policy in the US. Now it’s being exported.’

Now I’ll admit that I don’t often take issue with much that Monbiot writes, including his work on “rewilding” which gets him branded an extremist in many circles. But I do take issue with his claim that it’s only now that Buchanan’s vision of ‘totalitarian capitalism’ and the way this has infected public policy (and US politics in general it should be noted) is being exported elsewhere.

Why? Well, the answer to that is simple. As a mature student studying for a degree in public administration in the early 1990s one of the subjects covered was public choice theory, the development of a body of work in which, as Monbiot notes in his article, Buchanan played a central role. A leading book on the subject at the time was Peter Self’s Government by the Market? The Politics of Public Choice (Macmillan Press, 1993) in which the author details and critiques how the creation of the new public choice ideology came about, why, its goals and ambitions, and known and likely outcomes for the post-war model of social democracy.

As Self notes, public choice theory was indeed primarily a US development, although by the early 1990s its influence had spread, especially to English-speaking countries, and a prolific volume of work had been produced. In the US public choice theory had two strongholds: ‘…the Virginia School led by James Buchanan and Gordon Tullock, who founded the Public Choice Society in 1963, and the Chicago School, represented by such writers as Mancur Olson and George Stigler.’ (Self, 1993: 1). This body of work developed out from Anthony Downs’ ground breaking book of 1957, An Economic Theory of Democracy.

It’s not my intention to undertake a detailed review of public choice theory here, except to note that the underlying behavioural view – as for neo-classical economics – is that humans are primarily egoistic, rational, utility maximisers. Thus, Buchanan and Tullock (1962) rejected the traditionally accepted view of the difference between ‘political man’, supposedly concerned with public interest, and ‘economic man’ and private interests. Instead they argued ‘that it was reasonable to assume that his basic motives and interests will remain the same. What will change are the constraints and rules under which he operates, which will be critical for the rational calculation and pursuit of private interest.’ (Self, 1993: 2).

This ‘rational’ view does have profound consequences for how we view politics and indeed the construction and operation of political systems and economic and social relations in general, of course. Leaving that aside, for the purpose of this blog I want to focus on one succinct passage in which Self explains the emergence of public choice theory and the fundamental role it played in the new ideology of what in the 1990s was increasingly viewed as ‘government by the market’:

‘Mainstream public choice theories have been fused with market theories and converted into a powerful new ideology which has become politically dominant over the last two decades. This new ideology has overthrown or undercut the previous dominant ideology often described as the Keynesian-welfare state.

In both these cases the dominant ideology is a joint product of economic and political thought. The Keynesian-welfare state combination stressed the limitations and failures of market economics and beneficial capacities of the state for promoting both social welfare and economic prosperity. The new ideology reverses this approach and argues the general beneficence of markets and the many failures of politics. Public choice thought plays a vital part in this new synthesis because it claims to expose the grave intrinsic defects of the political process, especially compared to the merits of market choice. Without this demolition job on the role of government, market ideology could not have flourished in the 1980s.’
(Self, 1993: 56)

This then is where I take issue with Monbiot’s article, because the work of Buchanan and other advocates of public choice ideology is not a recent US export. Far from it. It has been infecting and thus impacting politics, government and public policy in the UK and elsewhere for decades. Nevertheless, Monbiot (following McLean’s argument) is correct in highlighting the more recent role billionaires such as the Charles Koch have played in funding entities that promote – usually by stealth – Buchanan’s/public choice forms of government and constitutionalism that effectively leave ‘democracy in chains’, as McLean so aptly puts it.

But again, it’s important to recognise how long this process has been going on. Thus, Self notes the role that so called “think tanks” played in the early transmission of public choice ideology and how they were usually funded either directly or indirectly by big business. Breaking with the independent tradition of organisations such as the Rand Corporation and Urban Institute, think tanks such as the Heritage Foundation and Hoover Institute (to name just two US example from many), and in the UK the Institute for Economic Affairs and Adam Smith Institute (ditto Canada’s Fraser Institute), all aggressively promote policy ideas and proposals based on public choice principles. (In his 2014 book, The Establishment, Owen Jones discusses the activity and impact on UK politics of several of the UK’s leading right wing/public choice think tanks).

In terms of influence and impact, Self notes  a number of examples from the 1980s of which I simply highlight one:

The Heritage Foundation specialised in detailed, closely argued policy proposals. When President Reagan took office, twenty Foundation ‘staffers’ joined his administration and he was greeted with a twenty volume, 3000 page report entitled ‘Mandate for Leadership’ filled with detailed recommendations for cutting down government and boosting defence. Four years later the Foundation could boost that 61% of its proposals had been implemented…and a new mandate was issued for Reagan’s second term with 1300 specific proposals.’ (Self, 1993: 66, citing The Nation, December 1984).

Although seen by many as at best incestuous and at worst verging on corrupt, over the decades since Peter Self’s book none of the influence/lobbying activity he reported has slowed or been curbed. Indeed, quite the reverse. The purveyors of public choice ideology have continued to evolve ever more ingenious ways to control and shape public policy that furthers their ideology and the interests of their benefactors. This is usually by stealth because it has been consistently shown that such ideas generally lack public support. Currently there’s no more egregious an example of this than the continuing attempts by US Republicans to pass legislation to repeal and replace (or just repeal) Obamacare, thus negatively impacting millions of US citizens, while simultaneously committing to tax cuts that will overwhelmingly benefit the already wealthy.

It’s somewhat ironic then, as retired US senator Barney Frank noted on MSNBC on Wednesday evening, that at the same time the behaviour and actions of President Trump demonstrate to everyone who dislikes government that there is, in fact, something worse than government: No government. Furthermore, through their actions many Republican politicians (ditto their Tory compatriots in the UK) also expose the fact that public choice ideology has never been about devising public policy that responds to public need.

Nor is there anything public – in the sense that most of us understand that term – about public choice theory and ideology. It’s actually a misnomer of the grandest order. For what public choice is really about is bowing down to that base and simplistic measure of humans as egoistical, rational, utility maximisers, and rewarding those that act accordingly.

*https://www.theguardian.com/commentisfree/2017/jul/19/despot-disguise-democracy-james-mcgill-buchanan-totalitarian-capitalism

Comments

  1. Sean Danaher -

    Ivan
    thanks very much for this. As I’ve mentioned before in the TRUK blog I was in the US (Tucson) in 1979/80 during the Carter administration. He was and still is a man of genuine integrity. Somehow “birds of a feather flock together” and I shared a house with two American girls; one Kay who was a law student and very politically active (the other Kim became an award winning author) ,Pat Murphy (another Irish PhD student) and a “Disco Dev” a mad Israeli former tank commander. But I reminisce too much. Kay in particular was horrified by the prospect of a Regan victory and declared that she would “leave the country” should he be elected. It was clear that the US was at a tipping point. It wasn’t just left or right wing, there was a feeling of “snake oil salesman” and dark forces at work. Sadly the Iran situation and Walter Cronkite’s ticking clock “this is the 151st day of the Iran Hostage Crisis etc.” buried deep into the American psyche and did for Carter.

    I have thought this philosophy as typified by “humans are primarily egoistic, rational, utility maximisers” a perverted way at looking at things and am appalled it has gotten the upper hand. It seems a charter for the “greed is good” philosophy.

    Know your enemy is one of the major dictums of a successful campaign.

  2. Charles Adams -

    Thanks Ivan, you are right this is not so new. According to Wolfgang Steeck, capitalism is a collective distributional struggle, and Kalecki predicted in the late ’40s that the rich were waiting for their opportunity to justify taking a larger share. The oil shocks of the 1970s and union overreach gave them their chance. Their utility maximising economics gave economics a bad name, and is no longer taken seriously. It led to lower growth, higher inequality, economic crises and eventually political instability.

    In contrast, the Kaleckian-Keynesian realisation of the positive role of the state gave us les trente glorieuses, the Wirtschafhtswunder, the economic golden age.

    At least everyone should know this story before making up their own minds how they would like to organise society.

    It is hard to find an unbiased review of the MacLean book. I found this one interesting.

    https://jacobinmag.com/2017/06/democracy-in-chains-review-nancy-maclean-james-buchanan

  3. Mark Crown -

    I have Adam Curtis to thank for introducing me to Buchanan in one of his films (forgive me as I cannot remember which one it is) where the grate (sic) man is interviewed.

    Before that I’m sure Martin Laffin mentioned Buchanan’s theories in a study of the public sector that I was given to read when I too was a mature student (1994 to 2000 – University of Westminster, London).

    There he is in Curtis’ film pontificating about the public sector and the state justifying their existence, highlighting the self serving behaviours that manifest themselves and I thought ‘Hang on – this is exactly the sort of stuff that goes on in the private sector too – and especially in finance of late’.

    Talk about the teapot calling the kettle black!

    My view is that Buchanan is too ideologically driven to realise that he is merely describing common human behaviour within all big organisations – whether they be public or private.

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