Hint: It’s Not Just About Paying Less Taxes
How a Nobel Prize winning economist teamed up with Charles Koch to create today’s GOP agenda.
Today’s Republican Party bears little resemblance to its more moderate past. While President Ronald Reagan tried to limit the “overreach” of the federal government in favor of states’ rights and individual freedom, this purportedly high-minded (if self-serving) movement has since morphed into something rawer and more extreme: an apparent effort to curb democratic rule, reshape the Constitution, and protect money interests well beyond limiting taxes on the wealthiest.
According to our podcast guest this week, historian and professor Nancy MacLean, this is no accident. She proposes to WhoWhatWhy’s Jeff Schechtman the provocative idea that this has all been part of a 60-year effort to create, through the GOP, a “fifth column assault” on America.
Its intellectual underpinnings come from Nobel Prize winning economist James McGill Buchanan, whose alliance with oil billionaire Charles Koch has given birth to a master plan marked by a kind of misanthropic libertarianism. The ultimate goal is to free capitalism from government interference and, ultimately, to strip the government’s role down to nothing but maintaining law and order and national defense, i.e. to protect the “haves” from the “have nots.”
According to MacLean, this is what lies behind the GOP’s fervor to eliminate labor unions, the EPA, the minimum wage and government health care, and to privatize social security and education, while of course lowering taxes.
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Jeff Schechtman: Welcome to Radio WhoWhatWhy. I’m Jeff Schechtman.
Think about how crazy our politics has become. Representatives from poor and lower class districts and states want to eliminate labor unions, lower the minimum wage, take away health care, privatize social security and eliminate the social safety net. And even public education is under siege. The president admits that the GOP health care bill is “mean.” And Karen Handel running as the Republic candidate in Georgia’s 6th District special election says that people have no right to a livable wage. All of this did not always represent the Republican party. So how did this transformation happen? Some would argue that it’s all about the social issues – that things like abortion, and race, and religion has gotten people to vote counter to their economic self-interest. That’s the “What’s the matter with Kansas?” construct. But it’s not entirely true. In fact there’s been a very deliberate plan to undermine liberal democracy, the economy, the Constitution and the very role of government. It’s been about more than just the 1% wanting to pay less taxes. It’s about a fundamental, more sinister aspect in all of this. And we’re going to talk about that today with my guest, Nancy MacLean.
Nancy MacLean is an award winning author. She’s a professor of history and public policy at Duke University, and she’s the author of a new book that should be required reading by all of us, titled Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. Nancy MacLean, thanks so much for joining us.
Nancy MacLean: Thank you so much for having me.
Jeff: In many ways in reading your book it does seem like that famous phrase of the vast right-wing conspiracy, really has some basis in truth as we understand how a particular group has more or less hijacked the Republican party.
Nancy: Well certainly there is a group that has hijacked the Republican party and that has a vast and very well-funded operation of quite literally hundreds of groups working to promote this agenda. Interestingly though while I think Hillary Clinton turns out to really have been onto something at the beginning of this when she spoke of a vast right-wing conspiracy in the late 1990s, by a technical dictionary definition, it is not a conspiracy because a conspiracy involves illegality. And as far as I’ve been able to determine, this operation is dedicated to operating within the law and is able to hire the best attorneys to make sure that it does so. So it is possible that they violated non-profit law in different places by engaging in partisan activity. But other than that, it is not a conspiracy in a technical sense. But I think what’s so interesting about this is it’s, it’s actually, again, worse than a conspiracy, because it is operating legally through a shrewd understanding of the rules of government, and how to get around things, and how to change things. And so it’s actually something so new in history, and I say this as a historian who’s studied hundreds of years of history, it is something so new in history that we don’t even have the language for it yet. But it is big, it is determined and it has a very shrewd strategy and end game.
Jeff: And much has been written about the way the financing for all of this has worked and the impact of the Koch brothers, the amount of money that they’ve put in to causes. But really what we’ve lost the focus on, and really what you focus on, is the intellectual underpinnings of this, where these ideas come from.
Nancy: Yeah, and I think that’s really important. We have to remember, those ideas on their own, the kind of ideas that are goals that Charles Koch imbibed as a Libertarian, they go way back to the 1930s. They were defeated then. They were defeated with the Barry Goldwater campaign in 1964. You know, Eisenhower has sneered at them. Ronald Regan in the end had refused to carry out the agenda they wanted because it was so unpopular. So they were never successful. They were marginal until they got these ideas from Buchanan, and they got a new strategy to make the plan effective. And they are doing so by essentially operating under the radar in ways that are, when you put it all together, quite stunning and quite devastating. But it is the ideas that have made the money successful.
Jeff: And talk about who James Buchanan is in this story.
Nancy: Yeah, I imagine most of your listeners will never have heard of James McGill Buchanan. I hadn’t when I started doing the research. And in fact I wasn’t looking for the Kochs or anything about this network. I was trying to understand why it was that some self-proclaimed free market economists had gotten involved in the southern schools fight, in the wake of Brown v Board of Education. And they were actually in race-neutral terms, advocating that some of the programs of the most extreme segregationists – and that was Milton Friedman, was the first person that I was following. And then I got onto this James Buchanan. But when you had the most arch-segregationists calling for shutting down public education to prevent compliance with the Brown decision and having tax dollars go to private schools, suddently these folks from the University of Chicago against Friedman and James Buchanan, Friedman’s doctoral student a guy named Warren Nutter – they picked up on that and started to push their own agenda using this storm over Brown as kind of wind in their sails for this agenda. And so that just got me really intrigued and then I started following Buchanan and I learned from a Latin American-ist that while many people heard of the role that Milton Friedman played in advising the Pinochet Junta in Chile in the 1970s on inflation, almost no one knew that Buchanan’s team, the Virginia School of Political Economy, had also gone over to provide advice and counsel to the dictatorship. And so the I picked up that story and learned that Buchanan had helped them shape a constitution that effectively as the book title says, put democracy in chains. And then I moved to North Carolina in 2010 just as the Tea Party legislature was taking control and at the time I was reading Buchanan’s ideas, and he has 20 volumes of collected works but some of his work is very abstract but suddenly I saw what my legislature was doing and I could see that this was Buchanan thought-in-action. And then he died in 2013 and I was able to get into his private papers at George Mason and there the trail was just incontrovertible, that what I was thinking was happening, was in fact happening. And correspondence and other materials there revealed… he was a very smart guy. He won the Nobel Prize in economic science in 1986. He developed a new school of political economic thought called Public Choice Economics, sometimes Virginia School of Economics. But he was really you could say in some ways a mastermind behind these attacks of the last few decades on government in general, and a government that answers to the people in particular. And he provided very shrewd advice for how to undermine that, essentially how to undermine the form of government that we’ve experienced over the 20th century in which you have a more inclusive democracy, and the system has to be more responsive to voters. And to do that it creates programs to address popular needs and desires, and taxes people, and they don’t like the idea that very wealthy people are being taxed for things that they don’t agree with.
Jeff: But with Buchanan the idea was more than just about taxes, they were really some fundamental underpinnings. Talk a little bit about that because I think we make the mistake sometimes of thinking about this only in terms of the taxation aspect.
Nancy: Yes, thank you very much for saying that because I really react to that too when I see coverage, you know, there’s been great coverage by journalists, I don’t mean to seem critical of it, but I think there’s too much emphasis on venality on the notion that these people are just doing it to line their own pockets or to escape regulation. In fact this is a whole philosophical system and it has its own internal ethics. You know, many of us don’t agree with those ethics but they do have values and their chief value they will say is liberty. We’d actually pay closer attention what they most mean by that is economic liberty, the freedom of property holders to do what they would like to do with their property, and to not be subject to taxation for purposes that they don’t agree with. But there is a very, very strong commitment that runs through it to this kind of libertarian vision of freedom as the foremost value, and you can see that now at the forefront of almost all the big right-wing think tanks, from Cato to Heritage. You know, there a strong thread of it running through the Federalist Society. So you’re absolutely right, I mean there’s a philosophical system here, and a set of values that we need to understand in order to make sense of what’s happening.
Jeff: And talk a little bit about those values, about the underpinnings of Buchanan’s ideas.
Nancy: So he and the folks in the kind of networks that he was part of sometimes like to talk about themselves as classical liberals, you know, and they would draw a line back to Adam Smith, and John Stuart Mill, and others from the late 18th and 19th century. Oh and James Madison, of course, there’s a lot of mentions of James Madison by this group. But the truth is for historians, and early American historians if you had them on could tell you this too, these folks have really departed in quite significant ways from those traditions. I mean the classical liberals, Adam Smith for example, believed that a free market would benefit everyone, right? That in the long term we’d all be better off. Whereas these guys are very clear in some of their writings that we’re going to see starker inequality than we’ve ever seen before and that the government is going to have to be very harsh in controlling the inevitable response to that. So I think they have gone farther from that tradition than they believe, and also those classical liberals really supported public education. So there are many differences but they would certainly say that that’s what they’re for and their objection to what liberals and moderates and others just want to do is that they would say that it’s coercive. “What right do you have to tax me for a purpose that I don’t support, or to take my hard-earned money and apply it to something else?” They do have a very strong tradition of resisting what they see as illegitimate authority, but it is interesting I think that they only see that little illegitimate authority coming from government, so they don’t recognize power as operating in the market, also the fact that say, you know, Charles Koch, I think he has $46 billion of wealth at this point, but that is not seen as a form of power in their system of political economy. So that leads to some real complications when you apply it to the real world.
Jeff: Ultimately they believe totally in the market, that everything should be market-driven it seems.
Nancy: Yes, but there too you have an interesting difference, and I don’t want to take you too far in the weeds on this but there are many economists, and Milton Friedman was among them that believed that the market was the most efficient way of allocating goods, and that that would lead to better results for everyone. But these folks who come out much more from what’s called Austrian tradition of Friedrich Hayek, Ludwig von Mises, and Buchanan was kind of a fellow traveler of that, these people think that the market is also the best social decision maker, that you know, we shouldn’t be designing things collectively by democratic process and by majority rule, but instead the market where we each operate as isolated individuals and make consumer choices, that somehow that’s a better way of running society. And they called that coordination – is the kind of buzzword that they used. But that that’s a very different prospect.
Jeff: Talk a little bit about the ways in which these ideas have become so ingrained in the Republican Party.
Nancy: Yeah, well one of the things that was so interesting when I got into Buchanan’s papers at George Mason was finding out that for years his centers, going all the way back to his first one in Virginia, had been doing what they called outreach to public policymakers and decision-makers, as well as corporate leaders. So his team, the Virginia School of Political Economy, was developing these ideas and presenting them in academic circles as a kind of science that would help us understand politics in a new way. But at the very same time and in quite different, you could say, cruder terms they were also doing this outreach to very powerful people in the private sector, and in government. And much of that was partisan. In fact, the whole operation almost blew up at George Mason in 1997 because they were bringing in top decision-makers. They had Antonin Scalia for example, the sitting Supreme Court Justice came in at one point, Clarence Thomas, you know, many people from congressional staff were getting trained you could say in these ideas. And they had free lunches, even though normally they say there’s there’s no such thing as a free lunch. Well they would have supplied free lunches on Capitol Hill, the Mercatus Center that’s at George Mason for once a week training of congressional staff, and of course they worked closely with all the major think tanks on the right. So this message has been getting out for a very long time, has been disseminated. But this message comes in a kind of code that outsiders don’t know, so that’s essentially what I’ve tried to do in the book, is decode things so that people will understand when they’re hearing these words that the words don’t mean what they what those who are outside this cause might think. And I could give you a classic one right now. Donald Trump often talked about draining the swamp, and when liberal and moderate voters heard that they thought, “Well, he’s going to end all that corporate lobbying in Washington and get money out of politics and make it so that we silence that noise and we can really hear from the citizenry.” But actually when Trump uses that language, he’s using the language that comes from Buchanan through these networks and really what they’re talking about by the swamp is the influence that organized groups of citizens have on government, you know, whether it’s the labor unions of the AFL-CIO, or the civil rights groups, or the American Association for Retired People, or the women’s movement groups, all the citizens groups that make claims on government that require government to spend money either for a program or for some kind of say environmental protection, those are seen as the swamp by these people on the right.
Jeff: Talk a little bit about how Buchanan and Koch came together.
Nancy: So my first record of their coming together, again, I have the documentary records, so perhaps there’s more that I don’t know, but my sense is that they came together about 1969, 1970, and Buchanan had just written up a major and in some ways popular book about campus unrest and he applied his particular school of economics thought to argue that there was a perverse system of incentives in public higher education that were encouraging protest and that if you transformed the system and change the incentives you could stifle the protest. And actually that’s the kind of a game plan that’s being used now by Tea Party dominated state governments to change public institutions. But in any case, he put that out and got a lot of attention on the right and one of the groups that he got attention from was one that Charles Koch was funding, one of his first philanthropies you could say, was a group called the Center for Independent Education based in Wichita, and they republished Buchanan’s book in a shorter pamphlet form to get it out and to promote their idea of pushing private education. So that was a kind of first contact point that got him into that network. And then Charles Koch joined something called the Mont Pelerin Society in 1970 that Buchanan and Friedman and Hayek and all these folks were involved in, it was very invitation-only, private society, transnational group that in which people developed these ideas and thought about how to apply them. And Dan Buchanan helped Charles Koch with the setting up of what became the Cato Institute and was involved in a number of his programs as a speaker and a kind of advisor. And then, so they would’ve known each other through those decades. And when Charles Koch really got serious about trying to make a world changing bid for political transformation, in 1997 he invested the first $10 million at George Mason in Buchanan Center, and he said then that he wanted to unleash the kind of force that propelled Columbus. So he had a very ambitious, some would say audacious, vision of what he was doing and he very much understood that Buchanan’s ideas were the technology, and he said this, the technology that he’d been looking for for years in funding hundreds of intellectuals, he had finally found them and he wanted at that point to start really pushing for the change that we’d seen coming so rapidly in the years since.
Jeff: You talk about Brown v Board of Education as being the kind of springboard in some ways for Buchanan and a lot of his associates. Talk about the role that race and racism has played in the evolution of these ideas.
Nancy: Yeah, I could maybe simplify it as a bullet by saying that it’s interesting few of these people ever talked frontally about racism, race and racism, and yet they could not have made the headway that they did without building on racism and popular commitments, white supremacy. So that’s kind of where it starts, it’s kind of intriguing in the way that works. But that was clear in the Brown v Board of Education fight of the late 50s where you had these guys, and these people are almost entirely men and almost entirely white, so I call them guys. These guys saw in the southern white reaction to Brown v Board of Education a great opportunity, and it was actually the first opportunity that this Mont Pelerin Society had had since its founding in 1947, ten years later and the schools fight and that’s when they really began to get some popular traction and to be able to reach out beyond their very limited circles and move others and begin to set a public agenda, in this case for school vouchers and attempts to subsidize private schooling with tax dollars. So that happens there and that’s just something that continues to happen throughout this cause. So again, Buchanan very rarely in his published works, very rarely went on about race but he did truck in these stereotypes that came out of the racism of the time, and one is just the way this cause thinks, they divide the population into parasites and prey. Literally, those are the words that Buchanan used and have gone on into this think tank world – parasites and prey. And so the parasites are, you know you could say, senior citizens, people who need public assistance, the unemployed, environmentalists who are seeking government action – those are the parasites. And the prey are the wealthy taxpayers. So again, it’s not racist but it does appeal to these long-standing tropes in American political culture that associated people who were not white and not elite with that kind of ugly language of parasites, when in fact they’re some of the hardest workers in our history, including the enslaved Americans. So that again and again comes up and it’s certainly something, that kind of demonizing large segments of the population, is being practiced by many of these organizations that Koch funds. If you look at their direct mail campaigns, it’s pretty scandalous.
Jeff: Now that language has been transferred to makers and takers in the popular political parlance.
Nancy: Yeah, that’s the kind of cleaner phraseology, but again, it’s preposterous. I mean, you know, low-wage workers are paying taxes, we’re all paying sales tax, we’re all paying local tax, we’re all paying these kinds of taxes and so the notion that you can just write off whole segments of the population as though they’re not contributing is crazy. And also, I have to say this as a woman, this cause does not recognize at all the role that women have historically played in unpaid work, you know the care work, the loving and raising of children, and care of old people and such. I mean that is all incredibly valuable for our society, we couldn’t live without it, and yet this cause would make the women doing that work just appear as takers, or again, as parasites, even worse. So it is a very skewed way of looking at the world even as it is philosophically coherent. Let me say one more there too because one of things that interest me most about this cause is that it’s doing what it’s doing because it understands that most of us would never agree with its values, or with its vision, if we knew what was happening. So they’re operating in these ways, you know, to kind of go around the edges and not be noticed. And I think that’s a clear case where those causes and values, they’re just so out of sync with those of most Americans. You know, I mean we do care… you know, kind of tribal divided mode now, but most of us care about one another, we care about our neighbors, we want to have a fair society, you know, we want to have clean air and water, we don’t want to see people get hurt, we think it’s wrong that if somebody has a terrible cancer or some kind of pre-existing condition that they might not be able to get insurance. We’re decent people. We’re a very good people. And, you know, I think if people know what is happening, I think they will rise to the challenge.
Jeff: It’s interesting you were talking about race before, it’s interesting to see how this further revolved in the late 60s early 70s out of Nixon’s southern strategy at the time and the way those two ideas came together.
Nancy: That’s true, although it’s very interesting, before Nixon had a southern strategy these guys had a northern strategy, and that’s gotten less attention. But in Virginia, in the late 1950s, there was a journalist who later became a famous conservative James Jackson Kilpatrick who was part of this milieu that Buchanan was in, with the Virginia elite, which is the most oligarchic elite in the South, and they were quite clear that they had to find a way to move national politics in their direction so they were doing that from the 50s on, and they were talking about things like the commerce clause of the Constitution which had enabled racial reform but was also interfering with business autonomy, so they pushed on that. They talked about these issues of taxation. They actually, some Virginians, not Buchanan but people he was working with, did outreach to conservative Catholics to try to make an alliance between advocates of parochial education and at Southern white supremacists who wanted to organize their white private schools. So it is true that Nixon definitely reached out to the south but this was happening before him, and Goldwater also who was a true Libertarian. You know, Nixon was not if trusted, I would say, by this cause, you know, most of them were Republicans, but he was not the kind of Republican they were favorable to. Goldwater was much more their guy and Goldwater only won in the deep South and in his home state of Arizona in 1964.
Jeff: Talk a little bit finally about where these ideas stand today. And by that I mean the degree to which Buchanan’s original kind of intellectual construct is still what’s motivating this today or has it just become so ingrained, so accepted in the Republican Party today that these ideas are just taken for granted even without the intellectual underpinnings.
Nancy: I think with that there’s a kind of both-and answer and I have actually read leading Republican journalist and commentators saying at various points, anniversaries of publication of Buchanan’s work and such, or when he died, and they say things like “Wow, I’ve forgotten where I even learned this. It’s like I’ve thought like this for so long, but now I remember that it was from James Buchanan. Or, “I remember now the first time I read his book, The Calculus of Consent,” which was the basis of the Nobel Prize in 1986. So there is a way, I think you’re quite right, that has just become, you know, the water that many people swim in, and they might not even know that the ideas come from Buchanan. But also this way of thought is being self-consciously taught to people and they’re being trained in an almost missionary form in these Koch-funded centers. So George Mason Mercatus Center in the economics department there, the law school that’s now the Scalia School of Law, those are the most important outposts where people… they’re trying to get a talent pipeline, they find young people, they bring them in, they train them in these ideas and then they send them out to staff various parts of the apparatus. But Koch is invested in schools around the country, I think over 200 or more at this point, it’s kind of hard to keep track of all these things, but they’re creating base camps all over the place to try to reach young people in particular and give them fellowships. Buchanan argued that it was essential to create what he called a gravy train, that money talks. So they provided these fellowships that provide various kinds of exposure and then they systematically train people in this way of thinking and then they take the ones that they’re impressed with and hire them, whether it’s in Koch industries or whether it’s in one of these operations that the donor network funds. And actually they like to move them back and forth between different parts of it so they get exposure to different aspects and they can be more effective. So it’s pretty systematically being pumped out even as some people may not even remember where they first encountered these ideas.
Jeff: Nancy MacLean, the book is Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. Nancy, I thank you so much for spending time with us
Nancy: I thank you so much for having me.
Jeff Schechtman: Thank you for listening and joining us here on Radio WhoWhatWhy. I hope you join us next week for another Radio WhoWhatWhy podcast. I’m Jeff Schechtman.
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