34.James M. Buchanan, Politics by Principle, Not Interest: Toward Nondiscriminatory Democracy (New York: Cambridge University Press, 1998).
35.“Pinochet’s Web of Bank Accounts Exposed,” Guardian, March 16, 2005; Eric Dash, “Pinochet Held 125 Accounts in U.S. Banks, Report Says,” New York Times, March 16, 2005; Muñoz, The Dictator’s Shadow, 289, 292; Buchanan, Economics from the Outside In: “Better than Plowing” and Beyond (College Station: Texas A&M Press, 2007), 201. I thank my Brazilianist colleague John French for his incisive reading of this chapter and for alerting me to Pinochet’s self-enrichment.
36.See, for example, the detailed case by the Union of Radical Economics, The Economics of Milton Friedman and the Chilean Junta (New York: URPE, 1997), for distribution at an American Enterprise Institute luncheon to honor his Nobel Prize, copy in box 138, Friedman Papers.
37.Constable and Valenzuela, A Nation of Enemies, 194–96.
38.Ibid., 196–98, also 212, on loss of retirement savings.
39.Jorge Contesse, quoted in Alisa Solomon, “Purging the Legacy of Dictatorship from Chile’s Constitution,” The Nation, January 21, 2014; Alfred Stepan, “The Last Days of Pinochet?” New York Review of Books, June 2, 1988.
40.Constable and Valenzuela, A Nation of Enemies, 310; Barros, Constitutionalism and Dictatorship, 306, 310.
41.Oppenheim, Politics in Chile, 190.
42.Constable and Valenzuela, A Nation of Enemies, 143, 229, 237 (quote), 245; Taylor, From Pinochet to the ‘Third Way,’ 188–89, 237.
43.Ariel Dorfman, “9/11: The Day Everything Changed in Chile,” New York Times, September 8, 2013, 6–7.
44.Constable and Valenzuela, A Nation of Enemies, 312–13; Alfred Stepan, ed., Democracies in Danger (Baltimore: Johns Hopkins University Press, 2009), 62–63; Mark Ensalaco, “In with the New, Out with the Old? The Democratizing Impact of Constitutional Reform in Chile,” Journal of Latin American Studies 26 (May 1994): 418, 420. On the recent push for a constituent assembly to overhaul the constitution, not least by ending the binomial system of representation, see Solomon, “Purging the Legacy.”
45.Daniel J. Mitchell and Julia Morriss, “The Remarkable Story of Chile’s Economic Renaissance,” Daily Caller, July 18, 2012, www.cato.org/publications/commentary/remarkable-story-chiles-economic-renaissance; Jonah Goldberg, “Iraq Needs a Pinochet,” Los Angeles Times, December 14, 2006, cited in Muñoz, The Dictator’s Shadow, 30; “Chile,” 2016 Index of Economic Freedom, Heritage Foundation, www.heritage.org/index/country/chile; Koch, Good Profit, 59. For similar trumpeting by Buchanan allies, see Paul Craig Roberts and Karen LaFollette Araujo, The Capitalist Revolution in Latin America (New York: Oxford University Press, 1997), especially the preface by his close friend Peter Bauer. It is notable that not one of these glowing accounts acknowledges the U.S. role in “making the economy scream,” as Nixon instructed the CIA, under Allende, whom they excoriate for exactly the kinds of problems U.S. policy exacerbated, if it did not wholly cause.
46.Reuters in Santiago, “Chilean Student Leader Camila Vallejo Elected to Congress,” Guardian, November 18, 2013.
47.Miguel Urquiola, “The Effects of Generalized School Choice on Achievement and Stratification: Evidence from Chile’s Voucher Program,” Journal of Public Economics 90 (2006): 1477, 1479; Pamela Sepúlveda, “Student Protests Spread Throughout Region,” Inter Press Service, November 25, 2011; William Moss Wilson, “Just Don’t Call Her Che,” New York Times, January 29, 2012, 5; Francisco Goldman, “They Made Her an Icon, Which Is Impossible to Live Up To,” New York Times Magazine, April 8, 2012, 25.
48.Pascale Bonnefoy, “Executives Are Jailed in Chile Finance Scandal,” New York Times, March 8, 2015, 9: Pascale Bonnefoy, “As Graft Cases in Chile Multiply, a ‘Gag Law’ Angers Journalists,” New York Times, April 7, 2016. On the problems of the private pension accounts, see Silvia Borzutsky, “Cooperation or Confrontation Between the State and the Market? Social Security and Health Policies,” in After Pinochet: The Chilean Road to Democracy and the Market, ed. Silvia Borzutsky and Lois Hecht Oppenheim (Gainesville: University Press of Florida, 2006), 142–66.
49.Linz and Stepan, Problems of Democratic Transition and Consolidation, 200.
50.Reuters, “Chile Election Victor Michelle Bachelet Pledges Major Reforms,” Guardian, December 16, 2013; Muñoz, The Dictator’s Shadow, 128–29; Barros, Constitutionalism and Dictatorship, 298; Bruno Sommer Catalan, “Chile’s Journey Towards a Constituent Assembly,” Equal Times, November 17, 2014.
51.“If the authoritarian features of the Constitution of 1980 are not removed sometime soon, the crisis of representation,” worries one leading Chilean constitutional scholar, “could end in another violent struggle”; Javier Couso, “Trying Democracy in the Shadow of an Authoritarian Legality: Chile’s Transition to Democracy and Pinochet’s Constitution of 1980,” Wisconsin International Law Journal 29 (2011): 415; also Aldo C. Vacs, “Coping with the General’s Long Shadow on Chilean Democracy,” in After Pinochet, ed. Borzutsky and Oppenheim, 167–73. See also Brianna Lee, “Chile’s President Michelle Bachelet Approval Sinks over Economic Malaise, Corruption, and Stalled Reforms,” International Business Times, September 16, 2015.
52.Center for Study of Public Choice, Annual Report, 1980, BHA; James M. Buchanan, “Reform in the Rent-Seeking Society,” from Toward a Theory of the Rent-Seeking Society, ed. James M. Buchanan, et al. (College Station: Texas A&M University, 1980), 361–62, 367.
CHAPTER 11: DEMOCRACY DEFEATS THE DOCTRINE
1.Leslie Maitland Werner, “George Mason U.: 29 and Growing Fast,” New York Times, December 31, 1986.
2.The developers commissioned their own storyteller, on whose account my own depends heavily: Russ Banham, The Fight for Fairfax: A Struggle for a Great American County (Fairfax, VA: GMU Press, 2009), xiii–xv, 30, 94. On the flagship postwar university-linked metropolitan development strategy and its features, see Margaret Pugh O’Mara, Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley (Princeton, NJ: Princeton University Press, 2004).
3.Banham, Fight for Fairfax, 184; see also the discussion of Johnson’s “almost daily” conversations with the developers in Paul E. Ceruzzi, Internet Alley: High Technology in Tysons Corner 1945–2005 (Cambridge, MA: MIT Press, 2008), 125, also 132; notably, federal proximity, defense department contracts, and RAND Corporation connections made it all possible. On Buchanan and RAND, see Amadae, Rationalizing Capitalist Democracy, 76, 78, 145. For early local usage of the term “Beltway bandits,” see “Fairfax County Bandit Gets 30 Years,” Washington Post, August 20, 1968, B3.
4.Buchanan, Better than Plowing and Other Personal Essays (Chicago: University of Chicago Press, 1992), 45.
5.Ruth S. Intress, “Winner of Nobel Seen As Brilliant but Opinionated,” Richmond Times-Dispatch, October 1986, reproduction without date or page numbers in Friedman Papers; Eric Randall, “Philosophical Differences Led Nobel Prize Winner Away from Tech,” October 22, 1986, Richmond Times-Dispatch, clipping in RG 15/8, College of Arts and Sciences Printed Material, Special Collections, Virginia Polytechnic Institute and State University.
6.Intress, “Winner of Nobel”; Randall, “Philosophical Differences.”
7.Intress, “Winner of Nobel.”
8.Ibid.; Randall, “Philosophical Differences.” At Buchanan’s memorial service in 2013, friends made references to these explosive rages. For the corporate analogue, see James M. Buchanan and Roger L. Faith, “Secession and the Limits of Taxation: Toward a Theory of Internal Exit,” American Economic Review 77 (December 1987): 1023–31.
9.Buchanan, Better than Plowing, 16; Buchanan and Faith, “Secession and the Limits of Taxation,” 1023–31.
10.Leah Y. Latimer, “Nobel Seen as Milestone of Mason’s Growing Stature,” Washington Post, October 17, 1986; Karen I. Vaughn to James Buchanan, August 6, 19
78, BHA; Karen I. Vaughn, speech at Buchanan memorial service, September 29, 2013, GMU; D’Vera Cohn, “GMU Raids Faculty Stars from Rivals,” Washington Post, June 30, 1985; Philip Walzer, “Faculty Stars Seldom Shine for Undergraduates,” unidentified AP clipping, n.d., BHA.
11.Vaughn, speech at Buchanan memorial service; Karen I. Vaughn, “How James Buchanan Came to George Mason University,” Journal of Private Enterprise 30 (2015): 103–9; Karen I. Vaughn, “Remembering Jim Buchanan,” Review of Austrian Economics 27 (2014), 160.
12.Buchanan to A. Neil McLeod, June 14, 1983, BHA; Latimer, “Nobel Seen as Milestone”; Cohn, “GMU Raids Faculty Stars”; Walzer, “Faculty Stars Seldom Shine.” For recognition of the “symbiotic relationship” George Mason built with the business community, in which corporations and right-wing foundations supply it with money and it supplies them with “useful theories” such as those produced by Buchanan, see Michael Kinsley, “How to Succeed in Academia by Really Trying: Viewpoint,” Wall Street Journal, October 30, 1986, 33.
13.On the changes in public higher education, see the illuminating ethnographic study by Gaye Tuchman, Wannabe U: Inside the Corporate University (Chicago: University of Chicago Press, 2009), and the engaging first-person political-economic analysis by Nancy Folbre, Saving State U: Why We Must Fix Public Higher Education (New York: New Press, 2010).
14.Wade J. Gilley, “Is GMU Big Enough for Buchanan?” in Methods and Morals in Constitutional Economics: Essays in Honor of James M. Buchanan, ed. Geoffrey Brennan, Hartmut Kliemt, and Robert D. Tollison (New York: Springer, 2002), 565–66. Notably, Gilley also took a swipe at the “liberal arts coterie” whose “misconceived” vision of the university emphasized teaching undergraduates “without having to measure up” (564).
15.Buchanan to George Pearson, October 16, 1980, BHA; Peter J. Boettke, David L. Prychitko, “Introduction: The Present Status of Austrian Economics: Some (Perhaps Biased) Institutional History Behind Market Process Theory,” in The Market Process: Essays in Contemporary Austrian Economics Introduction, ed. Boettke and Prychitko (Northampton, MA: Edward Elgar, 1994), 10; Daniel Schulman, Sons of Wichita, 260–62 (also, on Hayek and von Mises, 55, 93, 105); Doherty, Radicals for Capitalism, 408. The chair of the American Enterprise Institute’s Council of Economic Advisers wrote of Fink’s academically undistinguished edited volume on supply-side economics: “It does move the cause along”; Paul W. McCracken, “Taking Supply-Side Economics Seriously,” Wall Street Journal, January 28, 1983, 30.
16.Brian Doherty, Radicals for Capitalism: A Freewheeling History of the Modern Libertarian Movement (Philadelphia, PA: PublicAffairs, 2007), 407, Malcolm X story on 430; James M. Buchanan to Charles Koch, May 24, 1984, BHA; Vaughn, Remembering Jim Buchanan, 145.
17.Charles Koch, “The Business Community: Resisting Regulation,” Libertarian Review, August 1978; Boettke and Prychitko, “Introduction,” 11; Paul Craig Roberts quoted in David Warsh, Economic Principals: Masters and Mavericks of Modern Economics (New York: New Press), 96.
18.Buchanan to Richard M. Larry, June 14, 1982, BHA (same text sent to Michael S. Joyce, June 14, 1982, BHA); Buchanan to Martin F. Connor, June 15, 1982, BHA; Janet Nelson to Buchanan, September 22, 1983, BHA; Edward H. Crane to Buchanan, September 7, 1983, BHA; James M. Buchanan, “Notes for Heritage Foundation reception,” May 23, 1984, BHA; Vaughn, Remembering Jim Buchanan,” 163.
19.James M. Buchanan, “Notes for Remarks to George Mason Economics Faculty,” October 1, 1982.
20.Lawrence Mone, “Thinkers and Their Tanks Move on Washington,” Wall Street Journal, March 19, 1988, 34.
21.David Shribman, “Academic Climber: University Creates a Niche, Aims to Reach Top Ranks,” Wall Street Journal, September 30, 1985, 1. The Reason Foundation’s head asserted that Buchanan’s ideas had become the new “conventional wisdom” in Washington; Robert W. Poole Jr., “The Iron Law of Public Policy,” Wall Street Journal, August 4, 1986, 13.
22.Miller, known for his advocacy of deregulation on the staff of the American Enterprise Institute, became executive director of the Presidential Task Force on Regulatory Relief, then chair of the Federal Trade Commission and later budget director for Reagan as head of the OMB. Tollison was named director of the Bureau of Economics at the FTC under Miller. Roberts, in the words of a contemporary reporter, “more than any other single player wrote the legislation that brought about the [Reagan-proposed] tax cuts in 1981.” Tollison worked under Miller in the FTC. Jane Seaberry, “‘Public Choice’ Finds Allies in Top Places,” Washington Post, April 6, 1986, F1; Robert D. Tollison, “Graduate Students in Virginia Political Economy, 1957–1991,” occasional paper on Virginia political economy (Fairfax, VA: Center for Study of Public Choice, George Mason University, 1991), 3–4, 21; “Swearing-In Ceremony for Jim Miller,” October 8, 1985, box 232, White House Office of Speechwriting, Reagan Library.
23.James M. Buchanan, “Democracy: Limited or Unlimited?” paper prepared for 1981 Viña del Mar regional meeting of the Mont Pelerin Society, BHA. Buchanan voted for Reagan in 1980 and 1984, yet did not himself identify as a Republican, but rather as “an independent”; Ken Singletary, “Nobel Prize Winner Explains Reasons for Leaving Tech,” unidentified clipping, November 18, 1986, C1, in T. Marshall Hahn Papers, Virginia Polytechnic Institute and State University, Special Collections, Blacksburg, VA.
24.David A. Stockman, The Triumph of Politics: Why the Reagan Revolution Failed (New York: Harper & Row, 1986), quote on 2.
25.See, for example, Thomas Edsall, Chain Reaction: The Impact of Race, Rights, and Taxes on American Politics (New York: W. W. Norton, 1991), especially chapter 10, “Coded Language.”
26.Stockman, Triumph of Politics, 8–9, 11, 92, 125.
27.Ibid., 13, 181, 190–92, 204, 390–92. A recent synthesis by two leading historians bears out Stockman’s case on the durability of popular programmatic liberalism; see Meg Jacobs and Julian E. Zelizer, Conservatives in Power: The Reagan Years, 1981–1989: A Brief History with Documents (Boston: Bedford/St. Martin’s, 2010). For other versions of the same conclusion, see W. Elliot Brownlee and Hugh Davis Graham, eds., The Reagan Presidency: Pragmatic Conservatism and Its Legacies (Lawrence: University Press of Kansas, 2003).
28.Stockman, Triumph of Politics, 14, 393, 391–92, 394. One full statement bears quoting: “We can afford to be the arsenal of the free world and have our modest welfare state, too. The only thing we cannot afford to do is to continue pretending we do not have to finance it out of current taxation” (292).
29.Ibid., 92, 222. For the chilling tale of “the fateful decision to cover up what we knew to be the true budget numbers” in October 1981, see 329–42, 344–45, 357, 362, 373. For the final tally, see James T. Patterson, Restless Giant: The United States from Watergate to Bush v. Gore (New York: Oxford University Press, 2005), 158–59.
30.James M. Buchanan, “Post-Reagan Political Economy,” in Constitutional Economics, ed. James M. Buchanan (Cambridge, MA: Basil Blackwell, 1991), 1–2, 14; James M. Buchanan, Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism (Northampton, MA: Edward Elgar, 2005), 60.
31.Buchanan referred to Social Security as a “Bismarckian transplant onto hitherto alien ground” (in a nasty burst of nativism for someone busy importing onto alien ground the ideas of two Austrians). James M. Buchanan, “The Economic Constitution and the New Deal: Lessons for Late Learners,” in Regulatory Change in an Atmosphere of Crisis: Current Implications of the Roosevelt Years, ed. Gary M. Walton (New York: Academic Press, 1979), 22. On the vast, homegrown, Depression-era struggle for old-age pensions, see Edwin Amenta, When Movements Matter: The Townsend Plan and the Rise of Social Security (Princeton, NJ : Princeton University Press, 2006).
32.Social Security was the centerpiece of James M. Buchanan, “Dismantling the Welfare State,” notes prepared for presentation at 1981 European Regional Meeting, Mont Pelerin Society,
Stockholm, August–September 1981, box 88, Hayek Papers. See also Daniel Orr, “Rent Seeking in an Aging Population,” in Toward a Theory of the Rent-Seeking Society, ed. James M. Buchanan, et al. (College Station: Texas A&M University, 1980), 222–35.
33.Edward H. Crane to Buchanan, May 6, 1983, BHA; James M. Buchanan, “Social Security Survival: A Public-Choice Perspective,” Cato Journal 3, no. 2 (Fall 1983): 339–41, 352–53; Mancur Olson, “‘Social Security Survival’: A Comment,” ibid., 355–56. On Cato’s move to the capital, criticized by Murray Rothbard as an opportunistic move “toward the State and toward Respectability,” see Schulman, Sons of Wichita, 116.
34.Buchanan, “‘Social Security Survival,’” 339–41, 352–53. Earlier that year, Buchanan had joined the board of advisers for the pro-privatization Family Security Foundation; James M. Wootton to Buchanan, February 28, 1983, BHA.
35.Buchanan, “‘Social Security Survival,’” 339–41, 352–53.
36.Ibid.
37.Ibid. For an illuminating discussion of the perceived and enduring differences between social insurance and means-tested programs in America’s two-track welfare system, see Linda Gordon, Pitied but Not Entitled: Single Mothers and the History of Welfare (New York: Free Press, 1994).
38.Buchanan, “‘Social Security Survival.’” On the long campaign that followed, and continues, see Steven M. Teles and Martha Derthick, “Social Security from 1980 to the Present: From Third Rail to Presidential Commitment—and Back?” in Conservatism and American Political Development, ed. Brian J. Glenn and Steven M. Teles (New York: Oxford University Press, 2009), 261–90. For the systematic—yet so far failed—efforts of the corporate right to turn young people against Social Security, see Jill Quadagno, “Generational Equity and the Politics of the Welfare State,” Politics and Society 17 (April 1989): 353–76.
39.Buchanan, “‘Social Security Survival.’”
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