49.Murray N. Rothbard, Left and Right: The Prospects for Liberty, Cato Paper No. 1 (Washington, DC: Cato Institute, 1979), 1, 11, 19, 20.
50.Raimondo, Enemy of the State, 220–23. “Suddenly,” writes Rothbard’s devoted biographer, “with the help of one of the wealthiest families in the United States, if not the world, the number and quality of these practically nonexistent creatures would be increased a hundred-fold.”
51.Rothbard, Betrayal of the American Right, 202; also Raimondo, Enemy of the State, 224–39.
52.Raimondo, Enemy of the State, 224. That usage of “ruling class” is now common on the Koch-backed right, as a fund-raising letter from the Heritage Foundation illustrates, crediting the 2016 election with “saving the republic from the ruling class,” Jim DeMint to mailing list, n.d., but mid-December 2016, copy in author’s possession.
53.Rothbard, Left and Right, 25.
54.Raimondo, Enemy of the State, 224; James Allen Smith, The Idea Brokers: Think Tanks and the Rise of the New Policy Elite (New York: New Press, 1991), 221.
55.Doherty, Radicals for Capitalism, 16, 394, 409–13; Raimondo, Enemy of the State, 218–24.
56.Raimondo, Enemy of the State, 239.
57.James M. Buchanan, “The Samaritan’s Dilemma,” in Altruism, Morality, and Economic Theory, ed. Edmund S. Phelps (New York: Russell Sage Foundation, 1975), 71, 74–76, 84.
58.Buchanan, “Samaritan’s Dilemma,” 71, 74. Without credit to Buchanan, an ally on the libertarian right applied such ideas in a critique of liberal social policy as influential as it was empirically empty and analytically flawed: Charles Murray, Losing Ground: American Social Policy, 1950–1980 (New York: Basic Books, 1984). Cato brought Buchanan’s ethics into policy discussion. See, for example, Doug Brandow, “Right On, Gov. Allen,” Washington Post, January 29, 1995, C8.
59.Buchanan, “Samaritan’s Dilemma,” 74–75, 84.
60.Margalit Fox, “Lanny Friedlander, 63, of Reason Magazine, Dies,” New York Times, May 7, 2011.
61.“Reason Profile” of editor Robert Poole Jr., Reason, October 1972; William Minto and Karen Minto, “Interview with Robert Poole,” Full Context 11 (May/June 1999), www.fullcontext.info/people/poole_intx.htm.
62.Robert W. Poole Jr., Cut Local Taxes—Without Reducing Essential Services (Santa Barbara, CA: Reason Press, 1976); Doherty, Radicals for Capitalism, 376–77; Minto and Minto, “Interview with Robert Poole.”
63.Poole, Cut Local Taxes; Minto and Minto, “Interview with Robert Poole.” Proxmire began giving monthly Golden Fleece Awards in 1975 to embarrass government agencies, in one case being successfully sued by a scientist for defamation, though he, unlike Buchanan, often targeted military spending.
64.Doherty, Radicals for Capitalism, 441–43; Minto and Minto, “Interview with Robert Poole.”
65.Doherty, Radicals for Capitalism, 441–43.
66.Smith, The Idea Brokers, 221–22.
67.Robert W. Poole Jr. to F. A. Hayek, August 3, 1979, box 101, Hayek Papers, Hoover Institution; Reason Press Release, April 20, 1981; Tibor Machan to F. A. Hayek, September 14, 1981, ibid.; Minto and Minto, “Interview with Robert Poole”; Robert W. Poole, Cutting Back City Hall (New York: Universe Books, 1980).
68.The Liberty Fund, kindred to the Institute for Humane Studies, aimed to revive the tradition of the Volker Fund conferences, which had yielded so many hard-core libertarian scholars in the late 1950s, including Buchanan and Nutter. A. Neil McLeod to Buchanan, June 3, 1976, BHA.
69.See, for example, Buchanan to A. Neil McLeod, June 15, 1981, BHA.
70.Buchanan to A. Neil McLeod, July 26, 1976, BHA; the wine listing was in Buchanan’s hand. McLeod had been chairman of the Council of Advisors of the IHS in the 1960s.
71.Schulman, Sons of Wichita, 107.
72.Ed Clark to Charles G. Koch, February 16, 1978, box 1, Ed Clark Papers, Hoover Institution Archives; Schulman, Sons of Wichita, 109.
73.Charles G. Koch to Robert D. Love, March 2, 1978, box 1, Clark Papers. California was indeed promising terrain for an arch-capitalist cause; see Lisa McGirr, Suburban Warriors: The Origins of the New American Right (Princeton, NJ: Princeton University Press, 2001).
74.Doherty, Radicals for Capitalism, 406, 408. On the tax revolt, see Schulman, The Seventies, 205–217, and James M. Buchanan, “The Potential for Taxpayer Revolt in American Democracy,” Social Science Quarterly 59 (March 1979): 691–96.
75.Doherty, Radicals for Capitalism, 414–17, 421; Schulman, Sons of Wichita, 114–15.
76.Doherty, Radicals for Capitalism, 416, 421; Schulman, Sons of Wichita, 116. As it happened, Rothbard was but the first of several loyal players dumped by their patron when they failed to follow his cues; Crane would eventually be shown the door, and others, too, as time went on, usually with enough of a severance to keep them quiet.
77.James M. Buchanan, “Heraclitian Vespers,” American Journal of Economics and Sociology 63 (January 2004): 269; Buchanan, Better than Plowing, 12, 101, 106; James M. Buchanan, The Limits of Liberty: Between Anarchy and Leviathan (1975; repr., with new pagination, Indianapolis: Liberty Fund, 2000), 209, 212.
78.Buchanan, Limits of Liberty, 5, 220.
79.Ibid., 117, 11, 19–20, also 116. On the antidemocratic impact of these “fortuitous circumstances” on national legislation, see Ira Katznelson, Kim Geiger, and Daniel Kryder, “Limiting Liberalism: The Southern Veto in Congress, 1933–1950,” Political Science Quarterly 108 (Summer 1993): 283–306.
80.Buchanan, Limits of Liberty, 223, 186, also 209.
81.James O’Connor, The Fiscal Crisis of the State (New York: St. Martin’s, 1973). On the city as an early laboratory for neoliberal policies, see Alice O’Connor, “The Privatized City: The Manhattan Institute, the Urban Crisis, and the Conservative Counterrevolution in New York,” Journal of Urban History (January 2008); Kimberly K. Phillips-Fein, Fear City: The New York City Fiscal Crisis and the Rise of the Age of Austerity (New York: Metropolitan Books, 2017). Inflation-produced “bracket creep” in tax rates, moreover, led many middle-class taxpayers to see the tax code as unfair.
82.See Holly Sklar, ed., Trilateralism: The Trilateral Commission and Elite Planning for World Management (Boston: South End Press, 1980); and Niall Ferguson, et al., The Shock of the Global: The 1970s in Perspective (Cambridge, MA: Belknap Press of Harvard University Press, 2010).
83.James M. Buchanan and G. Brennan, “Tax Reform Without Tears: Why Must the Rich Be Made to Suffer?” The Economics of Taxation, ed. Henry J. Aaron and Michael Boskin (Washington, DC: Brookings Institution, 1980), 35–54.
84.Buchanan, Limits of Liberty, 56, 108, 187.
85.Ibid., 188, 191, 196, 202, 219. See also another version of his case from this era in James M. Buchanan and Richard G. Wagner, Democracy in Deficit: The Political Legacy of Lord Keynes (New York: Academic Press, 1977).
86.Buchanan, Limits of Liberty, 188, 191, 196, 202, 219. On such coalitions, which many others took to be a sign of progress, see Paul Johnston, Success While Others Fail: Social Movement Unionism and the Public Workplace (Ithaca, NY: ILR Press Books, 1994); Marjorie Murphy, Blackboard Unions: The AFT and the NEA, 1900–1980 (Ithaca, NY: Cornell University Press, 1992), 252–73; and Eileen Boris and Jennifer Klein, Caring for America: Home Health Care Workers in the Shadow of the Welfare State (New York: Oxford University Press, 2012), 94–148.
87.Amadae, Prisoners of Reason, 175–76, 182, 187, and 191. The entire section she devotes to Limits of Liberty deserves close reading (175–92).
88.Buchanan, Limits of Liberty, 205.
89.Ibid., 224–25.
90.Ibid., xvi, 208, 212, 215, 220–21.
91.Warren J. Samuels, “The Myths of Economic Liberty and the Realities of the Corporate State: A Review Article,” Journal of Economic Issues 10 (December 1976), quotes on
937 and 939.
92.“Buchanan Awarded Economic Prize,” VPI News Messenger, January 27, 1977.
93.George J. Stigler, “Why Have the Socialists Been Winning?” presidential address to the Mont Pelerin Society in Hong Kong, 1978, included in Festschrift for Hayek’s eightieth birthday, Ordo, Band 30 (Stuttgart, Germany: Gustav Fisher Verlag, 1979), 66–68. I am grateful to Eduardo Canedo for bringing this speech to my attention. Hayek had come to similar conclusions. “So long as the present form of democracy persists,” he wrote, “decent government cannot exist.” F. A. Hayek, The Political Order of a Free People, vol. 3 of Law, Legislation and Liberty (Chicago: University of Chicago Press, 1979), 135, 150–51.
CHAPTER 10: A CONSTITUTION WITH LOCKS AND BOLTS
1.Orlando Letelier, “Economic ‘Freedom’s’ Awful Toll: The ‘Chicago Boys’ in Chile,” The Nation, August 28, 1976; Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Metropolitan Books, 2007), 98–99. Chile has a complex tradition of naming, with an official second last name not ordinarily used (in Pinochet’s case, Ugarte); for the sake of clarity for non-Chilean readers, I have omitted the less used additional name with each Chilean named in this chapter.
2.Chile’s tortured history in this period has been the subject of a vast and excellent international literature. Among the English-language works I have found most helpful for this chapter are, in order of publication, Pamela Constable and Arturo Valenzuela, A Nation of Enemies: Chile Under Pinochet (New York: W. W. Norton, 1993); Robert Barros, Constitutionalism and Dictatorship: Pinochet, the Junta, and the 1980 Constitution (Chicago: University of Chicago Press, 2002); Steve J. Stern, Battling for Hearts and Minds: Memory Struggles in Pinochet’s Chile (Durham, NC: Duke University Press, 2006); Klein, Shock Doctrine; Lois Hecht Oppenheim, Politics in Chile: Socialism, Authoritarianism and Market Democracy, 3rd ed. (Boulder, CO: Westview, 2007); and Karin Fischer, “The Influence of Neoliberals in Chile Before, During, and After Pinochet,” in The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, ed. Philip Mirowski and Dieter Plehwe (Cambridge, MA: Harvard University Press, 2009).
3.Jeffrey Rubin, Sustaining Activism: A Brazilian Women’s Movement and a Father-Daughter Collaboration (Durham, NC: Duke University Press, 2013), 50, 52–53. I am grateful to Rubin for his extremely helpful reading of an early draft, including his pointing out how the Pinochet regime was also abrogating reforms made under the anti-Communist Christian Democrat Frei. For a brief summary, see Lewis H. Diuguid, “Eduardo Frei Dies,” Washington Post, January 23, 1982.
4.On Friedman’s input, see Constable and Valenzuela, A Nation of Enemies, 166–67; and Klein, Shock Doctrine, 75–128; on Hayek’s visit, too, Fischer, “The Influence of Neoliberals in Chile,” 310, 316, 328, 339n2. On the human rights campaign in the United States, see Van Gosse, “Unpacking the Vietnam Syndrome: The Coup in Chile and the Rise of Popular Anti-Interventionism,” in The World the Sixties Made, ed. Van Gosse and Richard Moser (Philadelphia, PA: Temple University Press, 2003).
5.To my knowledge, the only other scholars who have highlighted Buchanan’s impact are Alfred Stepan, the distinguished comparative political scientist whose footnote on Buchanan deepened my interest in the Virginia school, and Karin Fischer, now head of the Institute of Sociology at the University of Linz: Stepan, “State Power and the Strength of Civil Society in the Southern Cone of Latin America,” in Bringing the State Back In, ed. Peter B. Evans, et al. (New York: Oxford University Press, 1985), 341n13; Fischer, “The Influence of Neoliberals in Chile,” 321–26. While both wrote with keen insight, neither had the primary sources used in this chapter. 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; Buchanan, The Limits of Liberty: Between Anarchy and Leviathan (1975; repr., with new pagination, Indianapolis: Liberty Fund, 2000), 211n1.
6.Later president Michelle Bachelet, quoted in Bruno Sommer Catalan, “Chile’s Journey Towards a Constituent Assembly,” Equal Times, November 17, 2014.
7.Klein, Shock Doctrine, 78, 133–37.
8.Fischer, “Influence of Neoliberals in Chile,” 325–26; Oppenheim, Politics in Chile, 133–37.
9.José Piñera, “Chile,” in The Political Economy of Policy Reform, ed. John Williamson (Washington, DC: Institute for International Economics, 1994), 228–30; Fischer, “Influence of Neoliberals in Chile,” 325–26; Klein, Shock Doctrine, 78; Oppenheim, Politics in Chile, 133–37; Constable and Valenzuela, A Nation of Enemies, 155, 191. On Piñera’s ongoing Cato position, see www.cato.org/people/jose-pinera.
10.Oppenheim, Politics in Chile, 115; Ramon Iván Nuñez Prieto, Las Transformaciones de la Educación Bajo el Régimen Militar, vol. 1 (Santiago, Chile: CIAN, 1984), 50–53. I thank Anthony Abata for translating for me.
11.Carlos Francisco Cáceres to James Buchanan, November 27, 1979, BHA.
12.James M. Buchanan, “From Private Preferences to Public Philosophy: The Development of Public Choice,” in The Economics of Politics, by James Buchanan, et al. (London: Institute of Economic Affairs, 1978), reprinted as “De las Preferencias Privadas a Una Filosofía del Sector Público,” Estudios Públicos 1 (1980). On CEP, see Sergio de Castro to Buchanan, June 25, 1980, BHA.
13.Juan de Onis, “Purge Is Underway in Chile’s Universities,” New York Times, February 5, 1980, 6. Among those terminated was the director of an economic research center at the University of Chile who headed a group of attorneys and former legislators who opposed the dictatorship’s plan to draft a new constitution without involving an “elected constituent assembly.”
14.Juan de Onis, “New Crackdown in Chile Greets Appeals for Changes,” New York Times, July 10, 1980, A2.
15.Vanessa Walker, “At the End of Influence: The Letelier Assassination, Human Rights, and Rethinking Intervention in US-Latin American Relations,” Journal of Contemporary History 46 (2011); Carlos Francisco Cáceres to Buchanan, November 27, 1979, BHA; “Accomplished U.S. Economist in Chile,” El Mercurio, May 6, 1980, C4; “Minister de Castro with Economist James Buchanan,” El Mercurio, May 8, 1980, C3; Constable and Valenzuela, A Nation of Enemies, 171, 186. I am grateful to Eladio Bobadilla for translating all the El Mercurio articles for me.
16.Carlos Francisco Cáceres to Buchanan, February 12, 1980, BHA; Buchanan to Hernan Cortes Douglas, May 5, 1981, BHA; Jorge Cauas to F. A. Hayek, June 5, 1980, box 15, Hayek Papers; list of attendees, Foundation for Research in Economics and Education conference, October 4–5, 1973, BHA. On Cáceres and Pedro Ibáñez, Buchanan’s official hosts, as the most anxious to contain popular power through suffrage restrictions and limits on what elections could control in the new constitution, see Barros, Constitutionalism and Dictatorship, 221–22.
17.“Government Interventionism Is Simply Inefficient,” El Mercurio, May 9, 1980, C1.
18.“Government Interventionism,” C1; “Economic Liberty: The Basis for Political Liberty,” El Mercurio, May 7, 1980, C1.
19.Jorge Cauas to Friedrich Hayek, March 26, 1980, box 15, Hayek Papers.
20.Stern, Battling for Hearts and Minds, 170–71.
21.Ibid., 167–78; “Chile’s New Constitution: Untying the Knot,” The Economist, October 21, 2004; “Chile: Democratic at Last—Cleaning Up the Constitution,” The Economist, September 15, 2005; Carlos Huneeus, “Chile: A System Frozen by Elite Interests,” International Institute for Democracy and Electoral Assistance (2005). Link no longer functional, but hard copy in author’s possession.
22.Oppenheim, Politics in Chile, 118, 137; Constable and Valenzuela, A Nation of Enemies, 137–38.
23.Barros, Constitutionalism and Dictatorship, 172; Stern, Battling for Hearts and Minds, 171–73, 178; Cynthia Gorney, “Pinochet, with Disputed Constitutional Mantle, Moves into P
alace,” Washington Post, March 12, 1981; “Chile’s New Constitution: Untying the Knot,” The Economist, October 21, 2004.
24.Edward Schumacher, “Chile Votes on Charter That Tightens Pinochet’s Rule,” New York Times, September 11, 1980, A2; Heraldo Muñoz, The Dictator’s Shadow: Life Under Augusto Pinochet (New York: Basic Books, 2008), 128–29; Barros, Constitutionalism and Dictatorship, 173n10; Stern, Battling for Hearts and Minds, 171–73, 178; Gorney, “Pinochet, with Disputed Constitutional Mantle”; “Chile’s New Constitution.”
25.Buchanan to Sergio de Castro, May 22, 1980, BHA; similarly, Buchanan to Carlos Francisco Cáceres, May 17, 1980, BHA.
26.Rolf J. Luders, “The Chilean Economic Experiment,” paper presented to the 1980 General Meeting of the Mont Pelerin Society, box 24, Mont Pelerin Society Records, Hoover Institution Archives, Stanford University, Palo Alto, CA.
27.Constable and Valenzuela, A Nation of Enemies, 311, 313.
28.Hayek, too, was pleased. “A dictatorship which is deliberately restricting itself,” he said in defense of the new constitution, “can be more liberal in its policies [presumably, its economic policies] than a democratic society which has no limits”; Fischer, “Influence of Neoliberals in Chile,” 328, also 339n2.
29.Center for Study of Public Choice, Annual Report, 1980, Virginia Polytechnic Institute and State University, 61–62, BHA.
30.Pedro Ibáñez, Mont Pelerin Society, “Announcement,” December 1980, box 88, Hayek Papers; James M. Buchanan, “Democracy: Limited or Unlimited?” paper prepared for 1981 Viña del Mar regional meeting of the Mont Pelerin Society, BHA; Marcus Taylor, From Pinochet to the ‘Third Way’: Neoliberalism and Social Transformation in Chile (London: Pluto Press, 2006), 199–200. On the grave, see Constable and Valenzuela, A Nation of Enemies, 140.
31.Taylor, From Pinochet to the ‘Third Way’, 199–200.
32.Center for Study of Public Choice, Annual Report, 1980, 60–61.
33.William A. Link, Righteous Warrior: Jesse Helms and the Rise of Modern Conservatism (New York: St. Martin’s Press, 2008), 331.
Democracy in Chains Page 39