HoltesThoughts: Libertarian Bait and Switch -- The role of James M Buchanan

I'm wading through a rather large book named "Democracy in Chains" by Nancy MacLean. The book focuses on James M. Buchanan, the Koch Brothers and their role in allowing elitist activsts to use exoteric movements to promote esoteric causes via deception and manipulation. Her book focuses on how the Far right expresses itself through movements that are basically projects of program offices based in far right institutions. She fills in much of the story of how the University of Virginia helped birth a deeply subversive movement when it founded "Thomas Jefferson Center for Studies in Political Economy." It follows familiar territories and provides missing pieces to the puzzle of how this all was integrated. She helps demonstrate how:

"What we think of as dysfunction is the result of years of strategic effort." [Review]

The Libertarian Bait and Switch

In Nancy MacLean discovered a treasure trove in what had been the Thomas Jefferson Center building on the University of Virginia campus, and was turned into a museum when James M. Buchanan died in 2013. At the time the building was turned into a museum the libertarian pseudo intellectual Peter J. Boettke wrote:

"The archives being established at the Buchanan House are going to be a treasure trove for any scholar interested in the reintegration of philosophy, politics and economics in the second half of the 20th century." [Boettke]

He was right, Nancy discovered a treasure trove of documentation of plots, indoctrination and a secretive organization that knew that its core ideas would be unpopular and so masked them in rhetoric and abstraction. James M. Buchanan headed the Mt. Pelarin Society from 1984-1986, was a a Distinguished Senior Fellow of the Cato Institute and was a movement libertarian. He was recruited by F. Hayek He was able to accomplish a lot in his academic career but felt frustrated most of his life in the political sphere. He taught at the University of Virginia til 1983 and then moved to George Mason University and the Center for the Study of Public Choice.

Birthing the Privateering of Education

He also helped birth the Privateering counter assault in response to civil rights integration laws when he argued, with G. Warren Nutter that:

"the crux of the desegregation problem was that “state run” schools had become a “monopoly,” which could be broken by privatization." [Review]

They argued the framing of privateering as "school choice", claiming that forcing public monopolies to be broken up into private monopolies and local oligarchic company schools, would pay benefits to privateers. Parents could find schools that not only discriminated racially, but catered to religious prejudice, dogma. The further benefit would be that the privateers could legally loot public education moneys for religious, political an personal benefit.

Inventing an Ideology

This argument was part of a whole, invented "libertarian" ideology, which was often traced to Locke and Smith, but really was an inheritance from John C. Calhoun. These ideas didn't get very far until Ronald Reagan and Goldwater Championed them in the 60s, and made little headway til the Reagan Counter-reformation. But where they did make headway was in indoctrinating future leaders, teachers and activists in his Insitutionalization efforts. The terminology of individual "public choice" came to apply to everything but the Abortion Debate, where the left used it. Buchanan rebranded democracy as "collectivism" and the labor movement as "the labor monopoly movement." He fought to rebuke and repudiate "Keynesian Economics", the labor movement and, with his mentor Hayek, was the ideological forefather of modern libertarians.

Popular with the Wealthy

Buchanan may not have had immediate impact on economic and political economy, but his Institute was popular with wealthy magnates, bigots and conservatives.

"Buchanan expertly maximized his own utility. Money was flowing into the Thomas Jefferson Center he established at the University of Virginia in 1957, enabling him to run it as an autonomous entity, with its own lecture series and fellowship programs. Free of oversight, Buchanan gathered disciples—he screened applicants according to ideology—and his semiprivate school of thought flourished. The obstacles lay in the body politic. The 1960s looked even worse than the ’50s. Not long after Buchanan’s big book was published, the War on Poverty began and then the Great Society—one lethal program after another."

So he continued writing on economics. He wanted so badly to be taken seriously. But he wasn't until the 1980s.

The Calculus of Consent

Libertarians deride the very notions of virtue, public good, public service. This is odd, as many of them wind up in Government positions where they are expected to behave virtuously, in service to the public good. And it was Buchanan's "The Calculus of Consent", written with Gordon Tullock, which rigorously, clarified the arguments first broached by people like Hayek and Ayn Rand, that turned the ideals and framework of the New Deal on their head. The Atlantic review notes that Buchanan portrayed Government politicians and administrators:

"...as self-interested players in the marketplace, trying to “maximize their utility”—that is, win the next election or enlarge their department’s budget"

However, now instead of Government officials working to provide valuable services to the people, he could portray them as putting out:

"a kind of fairy tale expertly woven by politicians and their flacks."

Thus in the Libertarian worldview:

"*Politicians and public employees are people so will tend to act in their own interests."

And:

"*Actions in the political arena tend to serve the self interests of those in power, not the interests of the country.

And therefore the typical Libertarian concludes:

"This self-interest operating in the political system will lead to ‘government failure’, which can be far more serious than ‘market failure’ because of the coercive power that government exercises and because government is not subject to a direct competitive process." - Public Choice – A Primer -EAMONN BUTLER

Worse, when in power they tend to act that way.

Selfish Framing

The framing works, because there is a certain amount of truth to it. In order to win election, or get money for the budget, even the most altruistic leaders must make a case for the utility of their programs. So of course they are "self interested." And of course they were painting the best possible picture for the utility of their programs. Only now the argument was that they were doing more harm than good because:

"the high-priced programs they devised were paid for by taxes wrested from defenseless citizens, who were given little or no effective choice in the matter. It was licensed theft, reinforced by the steep gradations in income-tax rates."

They left out monetary arguments that the tax money spent on these programs eventually would come back as goods and services to those who paid the taxes. Instead they portrayed taxes, not as a duty of those with the privilege of owning property, but as "theft."

Poor Innocent Billionaire Victims

Particularly funny in this argument, given recent history and the armies of lobbyists, paid shills and corrupt politicians those people have come to deploy, is the depiction of the rich and powerful as "defenseless" citizens with little or no effective choice." The wealthy benefit from public power out of proportion to the rest of us. It never really hurt them to pay taxes as they had more than enough left over to live extremely well, even before the Reagan Counter-revolution. The wealthy and powerful tend to be narcissists (Trump is an extreme case but typical) and to see any tax on their privilege as personal harm, even if it really benefits them indirectly.

Power Maximization Process versus Market Process

Buchanan accomplished this through a theory of "Collective Choice" that created an extended strawman by relabeling democratic process as "collective" process and casting it as coercive "power maximization" process against a more rational and equitable market process.

Faulty Assumptions about Collective Choice

To do this they had to reject the very idea of an "independent 'public interest' as meaningful." They rejected both "class" ideas and the idea of the state as an "organic entity" also. In the process they also rejected any notion that there is a “social-welfare function.” Their arguments therefore, also were based on a "reductio-ad-absurdum, of core notions of virtue and public good. Indeed, like all libertarian arguments their account simplifies reality to the point of being the kind of "fairy tale" of virtuous markets versus evil bureaucrats or collectives.

Only individuals Behave Rationally

His faulty assumptions about was that:

"only the individual chooses, and that rational behavior, if introduced at all, can only be discussed meaningfully in terms of individual action." [pdf]

However, collective behavior is always channeled via norms, assumptions and shared rules. Even "irrational" seeming collective behavior is governed by such shared rules and boundary conditions. While only the individual chooses, people in groups choose together. And in such a situation, they do not always maximize personal gain or become "takers." Even mobs. It is a fundamentally flawed assumption to assume that democratic action is not rational. It can be irrational if the rules are dumped, or the people in revolt from them. But even then the people will create new rules. Democracy and the 51% rule are built into our natures. Even Flocks of Birds use them to govern their collective behavior.

Faulty Assumptions about Markets

His assumptions about markets were equally flawed:

"the average individual is able to rank or to order all alternative combinations of goods and services that may be placed before him and that this ranking is transitive. Behavior of the individual is said to be “rational” when the individual chooses “more” rather than “less” and when he is consistent in his choices." [PDF]

This is a restatement of the "rational actor" theory of markets. It assumes that consumers have all they need to know about the goods and services they are offered. An efficient market has the attributes of transparency, where this is the case. It has real choice where folks have the ability to either not buy from a particular vendor, buy from someone else and the vendor doesn't have to sell his/her goods either. A Genuine free market is a market of individuals buying and selling goods, with money as a measure and intermediary. If the assumptions of virtuous markets and Collective decision making (Democracy) were true, then there would be no fight and libertarian ideas would shade into ordinary liberal thinking. If there weren't qualitative differences between public and private goods and such a thing as market failure, then the Buchanan project of hammering square pegs of non-choice public goods like safe water, medicine and healthcare might even have made sense. But it didn't.

Libertarian Ideas not at work

Anyway, Buchanan's public choice theories never seemed to work where there was a free press and free political parties. He did apply them once; he and Hayek, etc... in Chile:

"The rules of government needed to be rewritten. But this required ideal conditions—a blank slate. This had happened once, in Chile, after Augusto Pinochet’s coup against the socialist Salvador Allende in 1973. A vogue for public choice had swept Pinochet’s administration. Buchanan’s books were translated, and some of his acolytes helped restructure Chile’s economy. Labor unions were banned, and social security and health care were both privatized. On a week-long visit in 1980, Buchanan gave formal lectures to “top representatives of a governing elite that melded the military and the corporate world,” MacLean reports, and he dispensed counsel in private conversations. But Buchanan said very little about his part in assisting Chile’s reformers—and he said very little, too, when the country’s economy cratered, and Pinochet at last fired the Buchananites." [From the Book]

The Real Issue

The real issue here, is that public choice theory seeks to replace constitutions that emphasize majority rule, with ones that concentrate power on insiders. The Libertarian argues that coercion is bad, claims that their alternative is not coercive, and then forgets that most people do indeed depend on access to public goods like hospitals, clinics and a job. And that therefore almost all the assumptions of the libertarian movement are specious. Liberty for the wealthy = "free labor" for the rest. Collective action is a response to disparities in raw power. Market Failure is serious because it is also bad government. Monopolies, oligopolies and oligarchy are coercive regimes. Buchanan's ideas resurrected ideas from John C. Calhoun, who was championing the ultimate coercive political system; slavery.

I'm still reading through the book, so I'll have more to say after I finish, run down sources and counter arguments and have read the critiques. I don't really think things are as dire as she claims. This is either the first in a series or I'll come back to it and change it (or both)

Sources and Further Readings

Sam Tanehaus Review: How the Nobel Prize–winning economist James M. Buchanan shaped today’s antigovernment politics:: https://www.theatlantic.com/magazine/archive/2017/07/the-architect-of-the-radical-right/528672/; Review by a Conservative: http://www.independent.org/issues/article.asp?id=9115; Virginia School of Political Economy; Mercatus Center
The Calculus of Consent (PDF):: http://files.libertyfund.org/files/1063/Buchanan_0102-03_EBk_v6.0.pdf
Related Posts:: http://holtesthoughts.blogspot.com/2014/04/mt-pelarin-and-milton-friedman-fighting.html; Murdering Pregnant Women in Argentina; Common Property and the Commons; Plutocrats Versus Democrats; Restoring Commonwealth requires Republican Corporations (http://holtesthoughts.blogspot.com/2015/05/restoring-commonwealth-requires.html); Who was Murray Rothbard?; Von Mises and Tony Wikrent: Economic Sophism; Tories, Neoliberalism, NeoKeynesianism versus Post Keynesianism; E Pluribus Unum -- Stronger Together; The Southern Revanchist takeover of the GOP; Starve the Beast Destroy Democracy -- The Fascist Roots of Libertarian Ideology

John Locke

For more information on John Locke and his relationship to other people read any of these posts:: Spencer Versus Locke and Henry George; Edmund Burke Versus John Locke; Locke Talked of the Importance of the Collective; The Concept of Commonwealth as Antidote to Tyranny; Commonwealth According to Locke; The Real Right to Property is Contingent on Reason; Common Property and the Commons; Rights Come from Below; Ayn Rand Argues against the Enlightenment; John Locke on the Virtues of Liberty; Tyranny Definition - John Locke

Appendix U Of Va to GMU

Boettke spinning the move from U of Va To GMU: Coordination Problem; James M. Buchanan and the Rebirth of Political Economy
Jonah Goldberg tries to Refute MacLean's book:: http://www.nationalreview.com/corner/449110/nancy-macleans-james-buchanan-libertarianism-book-shortcuts-expose-evil

HoltesThoughts

Sunday, August 27, 2017

Libertarian Bait and Switch -- The role of James M Buchanan