The Most Dangerous Economist You’ve Never Heard

By: Elizabeth Klein

It’s been almost two years since Donald Trump became president, and since his inauguration, he has made headlines like no other administration has before. With the media devoting much of its time and energy to the president’s daily inflammatory actions, it can be easy to lose sight of what’s going on in the background. But while all eyes are fixed on the president, another problem looms in the near distance, and what’s happening right now in the shadows could be absolutely catastrophic for the nation.


Last year, Nancy MacLean published Democracy in Chains, a nonfiction book that explores the ways that libertarian economics—carefully disguised as conservative—is placing our democracy in jeopardy. MacLean alleges that the increasingly despotic approach to U.S. economic policy being demonstrated behind the scenes right now in the country can be traced back to one man that you’ve probably never heard of: James Buchanan.


No, not James Buchanan, 15th President of the United States. James McGill Buchanan, the little-known economist whose theory of public choice won him the Nobel Memorial Prize in Economic Sciences. Public choice theory is the idea that people have an innate sense of self-interest which drives them to vote for whoever is most likely to give them the greatest access to money. At first, Buchanan believed that ordinary people could look past this greed and come together and agree on government. However, by the mid-1970s, this slightly hopeful Buchanan is unrecognizable. He began to believe that the only people capable of governing society and the economy were the wealthy and property owners. In her book, MacLean makes Buchanan seem so much like something straight out of the Gilded Age—with its robber barons and unrestricted billionaires—that it’s hard to believe that he only wishes he was born in the 19th century and actually died just five years ago.


What Buchanan saw in his vision of America was a market left virtually untouched by the government. Unfettered capitalism, he argued, was the only way that the economy could prosper. By the time he wrote The Limits of Liberty in 1975, he was convinced that capitalists were the victims of an unfair system, and the majority in society (a.k.a. literally everybody else—poor people; feminists; children, probably) had it in for them. Buchanan saw requests for public health, welfare, and social justice as destructive to the free market. The wealthy capitalists, who Buchanan believed were the most important influencers in the economy, could not operate in a way that was conducive to the economy because the majority of people wanted to involve the government. Constitutionally, Buchanan came to believe, something was wrong. But what could he do about it?


He couldn’t just rework the Constitution of the United States of America. But he soon got a chance to test his theories: an emerging dictatorship in Chile known as the Pinochet junta needed a constitution, and Buchanan was more than happy to assist in its drafting. Buchanan helped them design a government where labor unions were banned, social security and health care were privatized, and public choice theory was king. The public had hardly any power to oppose these measures; Buchanan ensured that supermajorities would be needed for “any changes of substance.” It was a government right out of Buchanan’s wildest economic dreams.


It was also a disaster. Not only did the economy fall apart, but the tyrannical Pinochet junta committed atrocities against the people of Chile. This is the essential problem with Buchanan’s way of thinking: he refused to accept the human aspect of capitalism. To him, it didn’t matter how the people suffered (like they did in Chile) as long as the economy was free of restrictions like wage controls and government agencies. However, as Buchanan made sure from the beginning that his efforts in Chile flew under the radar, he didn’t receive much backlash for the failure of the government, both economically and ethically.


But Buchanan didn’t lose hope in his vision. Neither did his adherents, the most influential of which was Charles Koch. We know him today as the 12th-richest person in the entire world, and back in the ‘70s, he and Buchanan were close. Like Buchanan, Koch saw an America where the rich could find freedom from democracy and work within a market free of restrictions. In an interview with Slate, Nancy MacLean explains how the two began a partnership that was mutually beneficial; Buchanan helped with Koch’s Cato Institute, Koch funded Buchanan’s academic school at George Mason University. This relationship allowed the two to connect big corporations with libertarian economists who shared Buchanan—and Koch’s—economic philosophy. And this is where the true problems starts.


Buchanan knew that the majority of society would never be okay with the ideals he was preaching, but that was precisely the group he sought to alienate. If his economic theories were to be implemented in the United States, libertarian politicians and influencers would have to deploy the same discretion Buchanan did in Chile. Koch understood this, and as he and other Buchananites use their money and power today to make subtle, yet important changes to America’s democracy, they do so with a secrecy that borderlines on conspiracy. Discreetly, followers of Buchanan’s economic vision are molding this country to cater to the rich. The Institute for New Economic Thinking cites a number of instances where this has occurred without drawing much attention: the privatization of prisons, the dismantling of retirement services, forcing arbitration agreements—the list goes on. Even the crisis in Flint, Michigan felt the influence of Buchanan-like thinking; Nancy MacLean states that in the city, the Mackinac Center (a Koch-funded think tank) “pushed for legislation that would allow the governor to take control of communities facing emergency and put unelected managers in charge.” When a manager in Flint switched the water supply for the city to a polluted body of water to save money, lobbyists from the Koch-affiliated Mackinac Center “ensured that the law was fortified by protections against lawsuits that poisoned inhabitants might bring.”


This is the future adherents of Buchanan’s philosophy want. They will bypass democracy any way they can to ensure that the wealthy get what they want. This is not to say that the nation is doomed for a dystopian future the likes of which only young adult science fiction has seen before. Unlike James Buchanan, I believe in the inherent goodness of people, and I don’t believe that the majority of people want the wealthiest 1% to govern the country. But we may not have a choice. The problem with Buchanan’s conspiratorial economic policy is that it aims not to promote distance from or even distrust of the federal government, but to fundamentally change the federal government at its source so that the cards are stacked against ordinary Americans.


This isn’t about Democrats versus Republicans. Buchanan’s ideals are only veiled as conservative because that label is easier than the truth, and the truth transcends party lines. Quietly but quickly, libertarian influencers are attempting to bend the rules so that this country serves the wealthy. Buchanan may have died, but his ideas live on and manifest themselves in the subtle changes to policy that are occurring all across the country. Buchananites—big corporations, rich capitalists, the top 1%—want a plutocracy, and they’re getting closer and closer to that goal because our eyes are elsewhere. Every day, the media churns out stories proclaiming the new ways in which the country is falling apart: the President is making a mess of international affairs, race relations are being pushed to the breaking point, bipartisanship no longer seems possible. But ordinary Americans, we who make up the majority of society, must not get distracted from the truth. Unless we want to live in a nation that caters to the top 1%, who now own 38.6% of America’s wealth, we need to focus on the little changes that are amounting to a planned “stealth takeover” by those influenced by James Buchanan. What’s happening here is the erasure of democracy, and we need to pay attention before the America we know is no longer recognizable.



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