Mises Wire

MacLean on James Buchanan: Fake History for an Age of Fake News

[Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. By Nancy MacLean. Viking,  2017. Xxxii + 334 pages.]

Nancy MacLean’s book was published only a short time ago, but already it has attracted considerable attention. She has uncovered, she tells us, a conspirator against the public interest.  James M. Buchanan, the winner of the Nobel Prize for Economics in 1986, was at the center of a nefarious campaign to reverse the needed social changes, supported by the vast majority of Americans, that followed the Supreme Court’s decision in Brown v Board of Education in 1954. Buchanan devised a scheme to privatize Virginia’s schools, in order to maintain segregation.  This failed, but Buchanan did not abandon his reactionary campaign. To the contrary, he continued throughout his long life his efforts to destroy popular programs like Social Security.  He took time off from his Herculean labors to help shore up the Pinochet regime in Chile. Later, ensconced at George Mason University, he helped train other soldiers of reaction.

I have hesitated to review the book, because many writers have already exposed the most important of its numerous errors. Although MacLean is a well-known historian who teaches at Duke University and has garnered many honors in her career, she makes mistakes that would disgrace a tyro.  A long review by Michael Munger is notable, and I have had the benefit of reading a forthcoming review by Tom DiLorenzo.  And there are many others who have entered the battle.  

Among the salient points raised against her by the critics are these: She discusses at great length John C. Calhoun, alleging that his apologetics for slavery underlie Buchanan’s arguments for property rights; but Buchanan never wrote about Calhoun. (In the course of talking about Calhoun, she also misunderstands Murray Rothbard’s use of Calhoun’s distinction between net tax payers and net tax consumers. ) She also suggests that Buchanan was influenced by the Southern Agrarian writer Donald Davidson, but there is no evidence Buchanan ever read him. More generally, she vastly exaggerates Buchanan’s influence on the libertarian movement. He was certainly a respected free-market economist, but to most libertarians, his thought was far from central.

There is, I hope, room for a few further remarks on the book; and in what follows, I have tried, for the most part, to draw attention to points not covered by other critics.

Much to our surprise, we learn that Buchanan was not a classical liberal.  S.M. Amadae’s “luminous explication of Buchanan’s thought reveals the falsity of his claim of being a classical liberal and the chilling will to power driving his intellectual program. “(p242, note 9).

Why wasn’t Buchanan a classical liberal? “Yet even as the theorist projected exploitive motives onto others, it was Buchanan’s own understanding of his fellow humans and their relations that was truly predatory. ‘Each person seeks mastery over a world of slaves,’ he intoned, clarifying that in his view every man desired  maximum individual personal freedom of action for himself---and controls ‘on the behavior of others so as to force  adherence with his own desires.’. .. Buchanan was breaking with the most basic ethical principles of the classical liberalism he claimed to revere, of the market as a quest for mutual advantage based on mutual respect.” (pp.150-151)

MacLean has failed to grasp that Buchanan is not in The Limits of Liberty giving an account of human motives in the actual world. Rather, he is employing an analytical construct to derive moral and legal constraints from the assumption of self-interested actors, initially unbound by constraints. The enterprise is of course broadly Hobbesian, and contractarian projects of the sort Buchanan is engaged are common in contemporary moral and political philosophy. (Two influential examples are Gregory Kavka, Hobbesian Moral and Political Theory,  and David Gauthier, Morals by Agreement.) 

Buchanan does not reject mutual respect. To the contrary, he says in the same book MacLean quotes, The Limits of Liberty,(p.5.) “There does exist a sense of ordinary respect for his fellow man in the ingrained habit pattern of the average American. . .The ominous threat posed by the 1960s was the potential erosion of these habit patterns.” In sum, MacLean does not understand the difference between an assumption used in analysis and a description of the world.  A comparable mistake would be to suggest that because John Rawls used the construct of the veil of ignorance, he thought that people actually do lack knowledge of their preferences and abilities.

MacLean proceeds to tell us that Buchanan asked, “how can the rich man. . .expect the poor man to accept any new constitutional order that severely restricts the scope for fiscal transfers among groups?” (p.151). She does not inform us of his answer, instead treating the question as if he were asking, “how do we rich people put one over on the poor?”

Buchanan’s answer was that redistribution might be required. The poor must be guaranteed a level of income, in order to give them a stake in the constitutional order. “To secure an initial agreement on positive claims to goods or to resource endowments, some transfer of goods or endowments may be required.” (Limits of Liberty, pp.63-64) Murray Rothbard used just this point to criticize Buchanan for favoring too much interference in the free market. In his incisive criticism of The Calculus of Consent, Rothbard assails the notion of “income insurance,” another name for the sort of redistribution. (See Rothbard, “Buchanan and Tullock’s The Calculus of Consent,” in Economic Controversies, Mises Institute 2011, p.929) Incidentally, although MacLean refers to Rothbard several times, she never mentions that he was an anarchist.

Buchanan’s economics are no more to MacLean’s liking than his political philosophy. He rejected  what “several generations of scholarship in the social sciences , humanities, and law had exposed; that the late-nineteenth century notion of a pure market was a fiction.”  He did not recognize that ‘social power shaped markets.”’ (p.97) It is difficult to fathom why she says this, as on the very same page, and immediately thereafter, she discusses Buchanan and Tullock’s notion of “rent seeking.” (She doesn’t understand the concept, but never mind that.) If rent-seeking is not an example of social power shaping markets, what is?

MacLean’s account of Buchanan’s views on education displays a comparable level of insight. She offers a long account of the South and the civil rights movement, setting the stage for her indictment of Buchanan as a supporter of racial segregation. She notes the importance of Senator Harry Byrd in Virginia politics and says: “As the chairman of the Senate Finance Committee, Byrd was the premier debt hawk in Washington, a man for whom the essential immorality of debt fused with an approach to the economy and government that would later be called supply-side economics.” (p.49) Although supply-siders such as Arthur Laffer did think that lower marginal tax rates were likely to increase, or at least not to diminish, tax revenue, they did not stress  the evils of debt.  Deficit spending did not faze them.

Was Buchanan a covert racist, supporting private schools in order to provide a cover for racial segregation? MacLean fails to discuss Buchanan’s article, “Equal Treatment and Reverse Discrimination,” which greatly aids us in answering this question. Here Buchanan presents a model  in which “even in the absence of ‘discrimination,’ as usually defined, acceptance of the ‘equal treatment’ criterion or precept for justice. . .is sufficient to provide a possible basis for what is often referred to (erroneously) as ‘reverse discrimination’. . ‘ Buchanan then applies this model to two famous cases, Bakke and Weber, to provide a possible justification for preference for minority candidates in education and employmenthttps://link.springer.com/chapter/10.1007/978-94-009-8162-1_6 This does not sound like a policy a racist would find congenial. Of course, it would be open to MacLean to claim that Buchanan changed his views.

Further, although Buchanan did argue in favor of private schools in the paper MacLean discusses, he by no means rejected public education in principle. To the contrary, In Liberty, Market, and State ( pp.133-135), among other places, he argues that taxation to support public education may be supported on egalitarian grounds. MacLean also says that members of the Mont Pelerin Society “parted with classical liberals such as Adam Smith And John Stuart Mill on so  much---not least, enthusiasm for public education.” (p.51) If she had taken the trouble to read Chapter V of On Liberty, she would have found that while Mill favored requiring parents to educate their children, he was an eloquent opponent of government schools.

MacLean maintains that Buchanan strongly supported the Pinochet regime in Chile. I do not propose to evaluate her account of this topic, but in one place what she says is highly misleading.  She mentions two other scholars who have written about Buchanan’s impact on Chile but says they lacked her access to the primary sources on Buchanan. She then says, “Buchanan had explicitly taken issue with Hayek for assuming change in the desired direction could be ‘evolutionary’; granted ‘reform may, indeed, be difficult,’ Buchanan argued, but it must be tried to achieve their desired world.” (p.278, note 5) Would not the natural reading of this passage be that Buchanan favored faster reforms in Chile than Hayek did? But her citation is to The Limits of Liberty, and Buchanan’s discussion there has nothing to do with Chile. It is rather a defense of his rationalism, an instance of what Hayek would call “constructivism,” against Hayek’s account of social evolution.

When Buchanan arrived at George Mason, Tyler Cowen was an important colleague. MacLean says about him: “The very season Buchanan was complaining to him, Cowen had published a new book, In Praise of Commercial Culture, which elaborated on old shibboleths from Ludwig von Mises.” She then refers to Mises’s The Anti-Capitalistic Mentality. (p290, note 42) Cowen’s book does not cite Mises at all; the arguments of the two books are not the same. To oversimplify, Mises says, in effect, “If you think that literature and the arts are today dominated by trash, remember that the free market gives the masses whatever they want. Don’t blame the market for trash; blame the people with bad taste who want trash.” Cowen’s argument is different: he takes a much more favorable view of popular culture than Mises does.

Cowen gives MacLean considerable trouble.  She says, “’The weakening of the checks and balances’ in the American system, Cowen suggested, ‘ would increase the chance of a very good outcome.’ Alas, given the pervasive reverence for the U.S. Constitution, a direct bid to manipulate the system could prove ‘disastrous.” (p.223) The reader awaits her account of the weakening of checks and balances that Cowen favored, but she does not offer one. Instead, she provides a fervent criticism of her own of checks and balances in the Constitution, which as she sees it serve to block progressive measures with majority support. (pp.225 ff) She fails to maintain the thread of her own argument.

The ins and outs of libertarian organizations prove too much for MacLean.  She says, that “Murray Rothbard “found himself fired from Cato.” (p.147) This is mistaken: Koch brought it about that the Cato Board of Directors seized Rothbard’s stocks in the Cato Institute. Rothbard had been spending his summer vacation at Cato in San Francisco, but he had already returned to his regular university position at the time of the dispute. She also says, ”Rothbard was but the first of several loyal players dumped by their patron when they failed to follow his cues; [Ed] Crane would eventually be shown the door.”  (p.276, note 76). This is misleading: Koch did help pressure Crane to retire from Cato; but after the two of them had a falling out, Crane remained in charge at Cato for about thirty years.

When I finished Democracy in Chains, a line from Tennyson came to mind: “Someone had blundered.”

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