• • •
If the nation’s health, schools, and prisons, and the world’s climate, are at a watershed moment, so, too, is the U.S. labor force. A large body of research by economists and political scientists over the past two decades has demonstrated that the surging inequality on display in America today is not an inevitable result of impersonal developments such as globalization and new technology, even as these have contributed. Rather, the extremity of our current situation is in good part due to the outsized power of corporations and wealthy donors over our politics and public policy. A case in point: According to the International Monetary Fund, an organization known for decades of draconian fiscal prescriptions, “the decline in unionization is strongly associated with the rise of income shares at the top.” The IMF concluded that the rights of workers to bargain collectively must be restored to slow the growth of inequality and enable economic growth.47
Yet the cause is pushing hard in the opposite direction: willful destruction of workers’ ability to organize into unions and negotiate for better wages and conditions. At midcentury, the former slave states of the South led the nation in passing antiunion right-to-work laws, with only a smattering of imitators elsewhere, mostly in places of sparse population. Yet between 2012 and 2016, guided by Buchanan’s ideas and pushed by the Koch-funded organizations ALEC, the SPN, and Americans for Prosperity, four former free states passed such laws: Indiana, Michigan, Wisconsin, and West Virginia.48
The new antiunion rules unfurled first by Governor Scott Walker in Wisconsin in 2011 are more devilishly lethal in their cumulative impact than anything the cause had theretofore produced. Their elaborate precision evoked the analogous changes in Chilean labor law instituted in the Pinochet era with Buchanan’s input. In the new Wisconsin, public employees would no longer be allowed to negotiate working conditions and benefits, only wages (with those held to the rate of inflation). Each contract would be only a year in duration, thus draining staff time and energy away from addressing the concerns of existing members and from organizing new members in order to prepare for now back-to-back annual negotiations. Unions would lose the right to have dues deducted from members’ paychecks and instead have to chase down individuals who did not pay. And, in a final slap, with the unions no longer able to do anything of substance for their members, they would face recertification elections each year.49 No wonder Walker boasted that “we dropped the bomb.”50 His approach cut in half, over just five years, the share of public employees who belong to unions.51
The combination of hobbling unions and privatizing public services has taken a particular toll on African Americans, who were able to move into the middle class in significant numbers specifically because of measures preventing discrimination in government jobs. “Public employment,” explained the authors of a large interdisciplinary research study on U.S. inequality, “has been the principal source of black mobility, especially for women, and one of the most important mechanisms reducing black poverty.” One recent headline captures the impact succinctly: “Public Sector Jobs Vanish, Hitting Blacks Hard.” The austerity measures induced by the Great Recession have contributed, but public sector employment’s failure to rebound also results from deliberate choices to cut taxes and services and outsource or privatize what remains.52
The historian of women Ruth Rosen looks at the impact of the spreading attack on government from yet another perspective. “Who will care for America’s children and the elderly,” she asks, now that two-thirds of mothers with children under six are in the workforce, yet “market fundamentalism—the irrational belief that markets solve all problems—has succeeded in dismantling so many federal regulations, services and protections?”53 But the cause would argue that it has answered that question over and over again: You will. And if you can’t, you should have thought of that before you had kids or before you grew old without adequate savings. The solution to every problem—from young people loaded down with student loan debt to the care of infants and toddlers and the sick and the elderly—is for each individual to think, from the time they are sentient, about their possible future needs and prepare for them with their own earnings, or pay the consequences. Indeed, George Mason’s Tyler Cowen and a Mercatus colleague told young Americans a few years ago that they “should not be occupying Wall Street, they should be occupying AARP” (to keep retirees from taking from them).54
But the elderly, too, and those now aging will have plenty of problems of their own. Social Security offers another tragic illustration of the destructive import of privatization and “personal responsibility,” with Chile’s experience again hinting at America’s future. Our nation’s retirement system is “the soft underbelly of the welfare state,” leading cadre member Stephen Moore has said. “Jab your spear through that” and you can kill the whole thing.55 The Koch team, led by Cato, continues to push the Pinochet model of individual investment accounts, a model for which they have won the support of many Republican elected officials. But in reality, that model proved so disastrous that after the dictatorship ended, a nearly universal consensus emerged on bringing back key elements of social insurance. The system of individual accounts proved a huge boon to the financial corporations that received the automatic deductions from workers’ paychecks. The companies exploited that access mercilessly, achieving an average annual profit rate of more than 50 percent over a five-year period, thanks, not least, to their taking between a quarter and a third of workers’ contributions as fees. (One senator decried them as “thieves in jackets and ties” who “rob people of their pensions.”) Even Sebastián Piñera, a conservative billionaire elected president of Chile in 2010 and the brother of the Pinochet labor minister who imposed the system, said it needed “deep reforms, because half of Chileans have no pension coverage, and of those who do, 40 percent are going to find it hard to reach the minimum level” needed for retirement.56
Meanwhile, the United States, distracted by the false fearmongering of the libertarians from the true challenge ahead, faces a retirement shortfall on a scale of more than $6 trillion as wage earners, in particular, have been thrown back on their own resources. Pushed by market pressures and encouraged by Mont Pelerin Society thought, U.S. corporations have nearly all discontinued the defined benefit pensions that a generation ago covered half the labor force. And with wages essentially stagnant for the majority since the 1970s, very few Americans have 401(k) accounts or other savings equivalent to what has been lost. Two authorities offer this stark summary: “The harsh reality is that the majority of today’s workforce—probably the large majority—are heading toward increasingly difficult and, in some cases, financially disastrous retirements.” The researchers also show, however, that this bleak future does not need to be. Social Security “remains the most widespread, effective, secure, and significant source of retirement income” for the vast majority of Americans. To stave off the crisis, the need is precisely the opposite of what the libertarian cadre argues: the nation’s social insurance system should be expanded to compensate for the spread of low-wage work and the shortfall from other sources.57
• • •
The ultimate target of the well-heeled right’s stealth plan, though, as Buchanan for so long urged, is the nation’s most important rule book: the U.S. Constitution itself. To understand where that endgame fits with all that has already unfolded, it may help to take a step backward and review the planning of the whole project that has unfurled since 2008, when the combined impact of the financial crisis that set off the Great Recession and the election of the nation’s first African American president, Barack Obama, gave the cause the opening for which Charles Koch had patiently waited after setting up shop at George Mason in 1997.58
That very year, Tyler Cowen was commissioned to lay the conceptual groundwork for the planned push to transform America with a paper titled “Why Does Freedom Wax and Wane?”59 The paper was a review of research that could guide the Mercatus Center in its quest to e
radicate the “restrictions on liberty” characteristic of twentieth-century democracies.60
What did Cowen discover? One key finding was that by the 1920s, in both Europe and the United States, “the expansion of the voter franchise” beyond “wealthy male landowners” had produced the unfortunate result of enlarged public sectors. Alas, “the elimination of poll taxes and literacy tests leads to higher turnout and higher welfare spending.”61
“The freest countries have not generally been democratic,” Cowen noted, with Chile being “the most successful” in securing freedom (defined not as most of us would, as personal freedom, but as supplying the greatest economic liberty). Cowen pointed to Hong Kong and Singapore as other lasting examples, as well as to two other cases: Peru under Alberto Fujimori and New Zealand from the mid-1980s to the early 1990s, which deregulated financial markets, privatized extensively, slashed taxes on the wealthy to create “a (nearly) flat tax,” and undermined labor unions’ bargaining power.62
The professor identified another commonality in the success stories: “In no case were reforms brought on by popular demand for market-oriented ideas.” The pro-liberty cause faced the same problem it always had: it wanted a radical transformation that “find[s] little or no support” among the people. Cowen delivered the action implication of its minority following without mincing words: “If American political institutions render market-oriented reforms too difficult to achieve, then perhaps those institutions should be changed.”63
The economist was creating, it seems fair to say, a handbook for how to conduct a fifth-column assault on democracy.
“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.” Cowen’s best advice, informed by the Chilean experience, was sudden percussive policy bombing, akin in nature, one could say, to the military doctrine of shock and awe, which uses colossal displays of force and calculated interlinked maneuvers to shock the enemy into submission. When the right opportunity arose, the economist advised, “big-bang style clustered bursts” could dispense with multiple democratic constraints on economic liberty in the same surge (rather like, one could infer, the radical policy changes imposed on multiple fronts in the same sessions in newly Republican-dominated states like mine after 2011, among them education, employment, environment, taxation, and voting rights).64
In the meantime, shaping public opinion was crucial. Efforts should probably focus on men, because they “are more likely to think like economists,” whereas women tend to anticipate the downside of economic liberty and so support government intervention. Research being done at George Mason also suggested a good deal of irrationality in the electorate, which could be turned to advantage. “It might be possible for ‘irrationally held’ views to in fact support good policies,” particularly if the cause were to enlist insights from “cognitive science and perhaps evolutionary biology.” Knowledge of just how vulnerable humans are to hardwired drives that resist reasoned evidence, it seemed, might prove helpful in getting voters to unwittingly enable an “unpopular” agenda.65
Changes under way in the media offered still more promise for the cause. Television’s new fixation on private peccadilloes, as seen in the Clinton era, could leave citizens jaded and suspicious, thus sowing helpful mistrust of government (although some caution was in order, as the “cynicism may undercut some of the values needed to sustain a free society”). The emerging Internet, for its part, “appears especially well suited for rumor, gossip, and talk of conspiracy.”66
Before we turn to how American “political institutions could be changed” to enable “weakening of the checks and balances” as recommended by Cowen, ultimately through altered interpretation among sitting judges followed by constitutional amendment, a little orientation may be helpful, because, in truth, the U.S. Constitution already restrains what we the people can do to a degree not seen in any other democratic nation. Fittingly for a cause whose lineage traces back to John C. Calhoun, the Koch-funded cadre works to exaggerate the most troubling features of what one legal scholar fairly called “slavery’s constitution.”67
Let me explain.
Americans are taught from an early age to revere the checks and balances built into our political system by that document, features designed to act as imposing speed bumps, if not complete roadblocks, to radical change from hotheaded majorities, particularly those who may encroach upon the property rights of the minority. The most obvious among these binding features is our grossly malapportioned Senate, designed to put brakes on the House of Representatives, which was to represent the people directly. A state with comparatively few residents, such as Wyoming, has the same Senate representation as the most populous state, California. That means the vote of a Wyoming resident carries nearly seventy times more weight than the vote of a Californian in Senate elections and deliberations.68 How fair is that? It’s not. It is precisely the kind of malapportionment that the Supreme Court, in the early 1960s, ruled unconstitutional in internal affairs of the states, whose officials were purposely overrepresenting rural residents over urban and suburban residents—indeed, a much more egregious departure from the “one person, one vote” standard. But because the apportionment of Senate seats is written into the Constitution, in the one section that cannot be amended, the remedy cannot be applied nationally.
On the one hand, this constitutional system has helped make the United States the most stable republic in the modern world. On the other hand, it has also made ours by far the least responsive of all the leading democracies to what the people want and need. It takes upheaval of truly historic proportions to achieve significant change in America, even when it is supported by the vast majority—as evidenced by the civil war required to end slavery, the tens of thousands of strikes and other struggles needed to achieve reform during the Great Depression, and the mass disruption and political crisis that civil rights activists had to bring about in order to win for African Americans the same constitutional rights enjoyed by other citizens.69 The existing checks and balances, in short, create an all but insuperable barrier to those seeking to right even gross social injustice.
The problem is systemic. Built into our Constitution, the change-blocking mechanisms prevent us as a polity from addressing our most profound challenges until there is supermajority support for doing so. We can see the toll of these constraints by looking at the problem of economic inequality. As it has swelled in the United States to a degree not seen in any comparable nation, intergenerational mobility—the ability of young people to move up the economic ladder to achieve a social and financial status better than that of their parents, which was once the source of America’s greatest promise and pride—has plummeted below that of all peer nations, with the possible exception of the United Kingdom. Many thinkers seek to explain this divergence by citing a uniquely individualistic culture. We have all heard those claims, perhaps even floated them ourselves.
But two of the country’s most distinguished comparative political scientists, Alfred Stepan and Juan J. Linz, recently approached the puzzle of U.S. singularity in another way: they compared the number of stumbling blocks that advanced industrial democracies put in the way of their citizens’ ability to achieve their collective will through the legislative process. Calling these inbuilt “majority constraining” obstacles “veto players,” the two scholars found a striking correlation: the nations with the fewest veto players have the least inequality, and those with the most veto players have the greatest inequality. Only the United States has four such veto players. All four were specified in the slavery-defending founders’ Constitution: absolute veto power for the Senate, for the House, and for the president (if not outvoted by a two-thirds majority), and a Constitution that cannot be altered without the agreement of two-thirds of the states after Congres
s. Other features of the U.S. system further obstruct majority rule, including a winner-take-all Electoral College that encourages a two-party system; the Tenth Amendment, which steers power toward the states; and a system of representation in the unusually potent Senate that violates the principle of “one person, one vote” to a degree not seen anywhere else. Owing to such mechanisms, Stepan and Linz note, even in the late 1960s, “the heyday of income equality in the United States, no other country in the set [of long-standing democracies] was as unequal as America, and most were substantially more equal.” As arresting, even the most equal U.S. state is less equal than any comparable country. What makes the U.S. system “exceptional,” sadly, is the number of built-in vetoes to constrain the majority.70
To this already singularly restrictive system the cadre seeks to add still more veto points. In the dream vision of the apparatus Charles Koch has funded to carry out Buchanan’s call for constitutional revolution, it would be all but impossible for government to respond to the will of the majority unless the very wealthiest Americans agree fully with every measure.71 The project has multiple prongs.
One is a vast legal shift, also anchored at GMU; it illuminates how quietly executed changes in legal rules can bind citizens as never before. In 2015, the New York Times headlined an investigative report, “Arbitration Everywhere, Stacking the Deck of Justice.” The journalists’ intensive research revealed “a far-reaching power play by American corporations” to include in the extensive fine print of applications for, say, employment, credit cards, cell phone service, medical practices, or long-term care, language to which exhausted and unwitting consumers routinely agree without reading. That language prevents the signers from participating in class action lawsuits over corporate malpractice and compels them to accept mandatory arbitration in a system in which the corporations in question write the rules and choose the decision-makers. That is: the contracts take away citizens’ constitutional right to sue in court, proclaiming their signatures as consent.72
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