The utterly chilling story of the ideological origins of the single most powerful and least understood threat to democracy today: the attempt by the billionaire-backed radical right to undo democratic governance.
In 2010, the brilliant investigative journalist Jane Mayer alerted Americans to the fact that two billionaire brothers, Charles and David Koch, had poured more than a hundred million dollars into a “war against Obama.”
Missing from this exquisitely detailed examination was any clear sense of the master plan; what defined victory, and, most of all, where that victory would leave the rest of us.
In an attempt to find that master plan, to understand whose ideas were guiding this militant new approach, others attempted to link what was happening to the ideas of the celebrity intellectuals of the so-called neoliberal right, especially such avid promoters as Milton Friedman, Ayn Rand, and Friedrich A. Hayek. But such inquiries ran aground, because none of the usual suspects had sired this campaign.
The missing piece of the puzzle was James McGill Buchanan, the man without whom this movement would represent yet another dead-end fantasy of the far right.
Charles Koch first became interested in Buchanan’s work in the early 1970s, called on his help with what became the Cato Institute.
James Buchanan did not start out as a shill for billionaires.
In an age when even kindred economists like Milton Friedman were producing ever more specialized and technical scholarship, Buchanan was a throwback to another time.z
Buchanan wanted to use an economic definition of incentives to examine government behavior, in the hope of returning America to “the free society” it had once been,
By the late 1990s, Charles Koch realized that the thinker he was looking for, the one who understood how government became so powerful in the first place and how to take it down was James Buchanan.
Buchanan would live to see Charles Koch and his inner circle turn the ideas into a revolutionary plan of action with frightening speed and success.
The Koch team’s most important stealth move, and the one that proved most critical to success, was to wrest control over the machinery of the Republican Party, beginning in the late 1990s and with sharply escalating determination after 2008.
Make no mistake about it: the cadre’s loyalty is not to the Grand Old Party or its traditions or standard-bearers. Their loyalty is to their revolutionary cause.
The old Republican Party, the one my own father voted for during most of his life, exists no more.
The Republican Party is now in the control of a group of true believers for whom compromise is a dirty word.
In a nutshell, they aim to hollow out democratic resistance. And by its own lights, the cause is nearing success.
The 2016 election looked likely to bring a big presidential win with across-the-board benefits. The donor network had so much money and power at its disposal as the primary season began that every single Republican presidential front-runner was bowing to its agenda.
But then something unexpected happened. Donald Trump, a real estate mogul and television celebrity who did not need the Koch donor network’s money to run, who seemed to have little grasp of the goals of this movement, entered the race.
And in November, he shocked the world by winning the Electoral College vote.
In writing this book, I have found myself more and more fixated on one gnawing question.
Could it be—and I use these words quite hesitantly and carefully—a fifth-column assault on American democratic governance?
Pushed by relatively small numbers of radical-right billionaires and millionaires who have become profoundly hostile to America’s modern system of government, an apparatus decades in the making, funded by those same billionaires and millionaires, has been working to undermine the normal governance of our democracy.
What this cause really seeks is a return to oligarchy, to a world in which both economic and effective political power are to be concentrated in the hands of a few.
The first step toward understanding what this cause actually wants is to identify the deep lineage of its core ideas.
Their intellectual lodestar is John C. Calhoun. He developed his radical critique of democracy a generation after the nation’s founding, as the brutal economy of chattel slavery became entrenched in the South.
Those who are leading today’s push to upend the political system are heirs to a set of ideas that goes back almost two centuries:
Its earliest coherent expression in America came in the late 1820s and ’30s, from South Carolina’s John C. Calhoun.
Appreciation for John C. Calhoun turns out to be a recurrent theme in the brain trust the Kansas-based billionaire Charles Koch has funded over the years.
To see how Calhoun’s project unfolded in his day is to better understand the stealth plan for transformation under way in our own.
Calhoun had no rival in the sheer wizardry of what one famous political scientist called the “set of constitutional gadgets” that Calhoun engineered to constrict the operations of democratic government.
He wanted one class—his own class of plantation owners—to overpower the others, despite its obvious numerical minority.
Government, for someone like Calhoun, was there to protect property rights, even at the expense of the rights of others to freedom of speech and movement.
What we are seeing today is a new iteration of that very old impulse in America: the quest of some of the propertied to restrict the promise of democracy for the many, acting in the knowledge that the majority would choose other policies if it could
The paralyzing suspicion of government so much on display today, that is to say, came originally not from average people but from elite extremists such as Calhoun who saw federal power as a menace to their system of racial slavery.
Scared of what democracy in the nation’s capital portended for the security of slavery in his region, Calhoun became almost hysterical
He feared, as his successors today do, a government that his band of like-minded property supremacists could not control.
It was uncanny how well young Jim Buchanan’s notions of individual efficacy, group power, and government overreach fit with the teachings of the economics faculty of the University of Chicago.
The school had been founded at the turn of the century by the oil industry magnate John D. Rockefeller
Today, when talk turns to the Chicago school of economics, most people think of Milton Friedman. But when Buchanan arrived, Professor Frank Hyneman Knight was widely viewed as the star
There was a saying among the student vanguard: “There is no God, but Frank Knight is his prophet.”
It was he whom Buchanan credited for his own conversion to a “born-again economist.”
Knight pushed his charges to question every claim, especially those most taken for granted in their day—which happened to be Rooseveltian liberalism and Keynesian economics.
After some six weeks of Knight’s course, Buchanan, by his own telling, “converted into a zealous advocate of the market order.”
Buchanan took from Chicago school economics a conviction that socialism in any form—that is, any group or government meddling with the market—was a sentimental and dangerous error.
The lineaments of a long battle were being drawn: collective security versus individual liberty.
Frank Knight and some other University of Chicago faculty members headed to Switzerland to strategize for the fight. They came home having created what they called the Mont Pelerin Society.
Their concern was how they might, together, shift the tide of history away from what they called “statism,” or what we might call a strong role for government.
The society set out to shift the tide of history—by freeing markets worldwide from the collective action and government planning that its members believed so perilous.
James Buchanan’s mentor Frank Knight was the only U.S.-born scholar among the three named cofounders of the society.
If only one could break down the trust that now existed between governed and governing, even those who supported liberal objectives would lose confidence in government solutions.
Buchanan got the break of his career in 1956: a post at the University of Virginia, as the new chairman of the economics department.
Buchanan would be able to turn a regional libertarian creed into a national counterrevolution.
Put simply, most Americans then trusted their government. In such an era, Buchanan said, “our purpose was indeed subversive.”
For his part, Jim Buchanan learned lessons from this experience that informed his thinking for the rest of his life.
Faced with majority opinion as expressed in votes, politicians could not be counted on to stand by their stated commitments.owing to their self-interest in reelection.
He learned something else, too: constitutions matter. If a constitution enabled what he would call “socialism”
It would be nearly impossible to achieve his vision of radical transformation without changing the constitution.
Over the next few years, James Buchanan began developing the innovative approach to political economy for which he was later awarded the Nobel Prize.
In these final hours of the massive resistance era, then, can be found the seed of the ideas guiding today’s attack on the public sector and robust democracy alike.
With Buchanan as intermediary, the Virginia Plan method would make its way across the Atlantic and eventually into the think tank advice with which Prime Minister Margaret Thatcher revolutionized British policy to achieve kindred ends.
With Volker Fund monies, he brought leading lights of the libertarian cause to Virginia, who in turn helped him to spread the influence of Virginia school thought in Europe.
It was while Buchanan was at Blacksburg that he first got to know Charles Koch, opening a relationship of mutually beneficial exchange, as the economist might say, that reached fruition a quarter century later.
The Law and Economics Center at the University of Miami was run by Professor Henry G. Manne, a leader in the emerging field of “law and economics,”
Manne’s own work of the 1960s had argued, for example, that insider trading was good for the economy and that hostile takeovers offered an ideal way for investors to control managers. Manne had been among the handful of scholars Buchanan first thought of for his Third Century project in 1973—and no wonder,
Like Buchanan, and with his guidance early on, Manne transformed a weakness into a strategic asset.
Manne warned that the “free enterprise” system was “in the greatest danger ever of being destroyed.”
Henry Manne set in motion the transformation he promised his donors he could deliver.
Today it is widely cited as the beginning of the corporate mobilization to transform American law and politics.
The “campaign for the courts,” sought “to mould a new jurisprudence” that would radically change “the way justice is dispensed in our society.” In particular, those waging the campaign sought “to make the protection and enhancement of corporate profits and private wealth the cornerstones of our legal system.”
Among the investors in Henry Manne’s vision was a relative novice: Charles G. Koch.
Charles Koch did not just become a convert to the ultra-capitalist radical right. He is the sole reason why this movement may yet alter the trajectory of the United States in ways that would unquestionably take the “demos” out of American democratic governance.
In the eventual merger of Koch’s money and managerial talent and the Buchanan team’s decades of work monomaniacally identifying how the populace became more powerful than the propertied, a fifth column movement would come into being, the likes of which no nation has ever seen.
He would turn Koch Industries into the second-largest privately held company in America—with yearly revenues of more than $115 billion and some sixty-seven thousand employees in almost sixty nations.
It was around this time—1970, to be exact—that Koch was admitted to the Mount Pelerin Society.
Urging Koch on in his chosen vocation was something else as well: his belief that his own growing financial success as one of the richest men in the world already justified his slowly taking over the libertarian cause and shaping it to his will.
Charles Koch bypassed Milton Friedman to make common cause with the more uncompromising James Buchanan.
Koch referred to Friedman and the rest of the post–Hayek Chicago school of economics he led, as well as to Alan Greenspan, as “sellouts to the system.” Why? Because they sought “to make government work more efficiently when the true libertarian should be tearing it out at the root.”
(Is it any wonder, then, that his allies would now rather bring down the government than improve it?)
You cannot understand the influence of the stealth movement that is transforming America today without understanding this critical turning point.
Why wait for popular opinion to catch up when you could portray as “reform” what was really slow-motion demolition through privatization?
Could a way be found to upend the normal order long enough to rewrite the governing rules of democracy, to separate it from the commitment to majority rule?
“Despotism may be the only organizational alternative to the political structure that we observe.”
Where persuasion failed, the lash might work.
On September 11, 1973, General Augusto Pinochet led a successful coup that overthrew the elected socialist government of President Salvador Allende in Chile.
The solution they came up with was to rewrite the nation’s constitution to forever insulate the interests of the propertied class they represented from the reach of a classic democratic majority.
It was Buchanan who guided Pinochet’s team in how to arrange things so that its capitalist class would be all but permanently entrenched in power.
If Jim Buchanan had qualms about helping to design a constitution for a dictatorship he did not commit them to print.
What’s perplexing is how a man whose life’s mission was the promotion of the free society reconciled himself, with such seeming ease, to what a military junta was doing to the people of Chile.
James Buchanan ended his memoirs with the words “Literally, I have no regrets.”
It is deeply troubling, then, that Chile is held up today as an exemplary “economic miracle” by the Cato Institute, the Heritage Foundation, and others on the U.S. right.
Fairfax County, Virginia, convinced the state to open a two-year college that was given the name George Mason. It opened in 1957.
Twenty-five years later, George Mason, now a university, recruited its first marquee professor: James McGill Buchanan.
“Literally millions of dollars” came to George Mason in the 1980s owing to Buchanan’s “presence,” the university’s then senior vice president later reported. He specifically noted that the incoming economist’s “very strong support from corporations and foundations”
Charles Koch was among those taking an interest in George Mason’s economics program even before Buchanan’s arrival.
Never a backslapper, James Buchanan had sought to tamp down the euphoria that swept the Mont Pelerin Society after the elections of Ronald Reagan, and Margaret Thatcher in the United Kingdom.
Success at the polls, while heartening, must not “distract attention away from the more fundamental issue of imposing new rules for limiting government.”
These libertarians seemed to have determined that what was needed to achieve their ends was to stop being honest with the public.
Instead of advocating for them frontally, they needed to engage in a kind of crab walk, in a manner that cumulatively, yet quietly, could begin to radically alter the power relations of American society.
Now, no doubt inspired by Chile’s conversion to private pensions, Charles Koch’s Cato Institute turned to Buchanan to teach its staff how to crab walk.
Cato made the privatization of Social Security its top priority.
With Buchanan’s tutelage, the cause learned that opposing it candidly meant “political suicide,”
Buchanan devised and taught a more circuitous and sequential—indeed, devious and deceptive—approach.
While step one would soften public support for the system by making it seem unreliable, step two would apply a classic strategy of divide and conquer.
The Cato team translated Buchanan’s ideas into a battle plan.
Privatization “moved from an intellectual fringe to become a centerpiece in contemporary public policy debates.”
Many liberals then and since have tended to miss this strategic use of privatization to enchain democracy
Those driving the train knew otherwise. Privatization was a key element that allowed for using disingenuous claims to take terrain that would make the ultimate project possible.
Confidence grew among the cadre that the very terrain of public life could be altered without their ever having to argue openly for their real goals.
What was needed was a way to amend the Constitution so that public officials would be legally constrained from offering new social programs to the public even when vast constituencies were demanding them.
The project must aim toward the practical “removal of the sacrosanct status assigned to majority rule.”
The cause would be helped along, too, by the fact that popular trust in government was dropping precipitously, due to the conduct of elected officials, from Lyndon Johnson’s lying about the war in Vietnam to Richard Nixon’s Watergate crimes.
For his part, Charles Koch came to see that Buchanan possessed the key that he had been searching for over so many years.
It was time to go from theory to practice in a way that even Koch-supported operatives had never been asked to do before.
By the mid-1990s, a colleague reported, Charles Koch had grown increasingly frustrated with the lack of progress being made in furtherance of the cause.
Koch just kept looking. That search would lead him back to James Buchanan’s front door.
Buchanan and Koch understood that the enduring impediment to the enactment of their political vision was the ability of the American people, through the power of their numbers, to reject the program.
The message Koch delivered in January 1997, along with the $10 million gift he pledged to support a new and enlarged James Buchanan Center, made clear that he believed he had found the missing tool
James Buchanan’s theory and implementation strategies were the right “technology,” to use Koch’s favored phrase.
With a respectable base camp secured, minutes from the capital, Koch would turn to assembling the kind of force that had propelled Columbus—this time, to put democracy in chains.
In the shock-and-awe-style coordinated push to implement radical change in record time, without customary transparency or deliberative process, is it any wonder that no one noticed how many of the leading operatives in this vast project had been trained in economics at Virginia institutions, especially at Buchanan’s last home, George Mason University?
The acclaimed jurist Louis Brandeis, once warned the American people that as a nation, “we must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”
I suspect, however, that even Brandeis never imagined that enough wealth could be concentrated in the hands of a few to launch such an audacious stealth attack on the foundational notion of government being of, by, and for the people.
I will use this conclusion to convey what is in store if we do not take this assault on our governance and our way of life seriously and respond effectively to it.
For all its horror, this portrait can be painted in good part with the words of the people who seek to create it.
David Boaz of the Cato Institute, to choose just one, speaks of the “parasite economy” that divides us into “the predators and the prey.”
Mitt Romney famously remarked that “47 percent” of voters were, in effect, leeches on “productive” Americans.
Charles Koch has always argued that his vision of a good society will bring prosperity to all.
What does that society look like? And what will they have to do to our people and our democracy to secure it?
Tyler Cowen, the man who succeeded Buchanan, has explained that with the “rewriting of the social contract” under way, people will be “expected to fend for themselves much more than they do now.”
The “quality of water” might not be what U.S. citizens are used to, but “partial shantytowns” would satisfy the need for cheaper housing as “wage polarization” grows and government shrinks.
Those who subscribe to the libertarian philosophy believe that the only legitimate role of government is to ensure the rule of law, guarantee social order, and provide for the national defence.
The House budget chairman, Paul Ryan, told one audience that the nation’s school lunch program left poor children with “a full stomach—and an empty soul.”
These zealots do not believe that the government should be involved in trying to promote public health, period. We are talking about things like basic sanitation,.
The Republican majority in Congress has “systematically cut public health budgets that address Zika, Ebola and other ailments,”
Thom Tillis, a North Carolina state senator elevated to the U.S. Senate in 2014 with backing from the Koch apparatus, has said that restaurants should be able “to opt out of” laws requiring employees to wash their hands after using the toilet, “as long as they post a sign that says, ‘We don’t require our employees to wash their hands after leaving the restroom.’ The market will take care of that.”
Amity Shlaes, a libertarian journalist on the Wall Street Journal editorial board, “found that public choice theory explained everything,” including that “health officials’ interest in testing small children’s blood for lead made sense when one considered that finding poisoned children validated their jobs.”
Is it any surprise, then, that those who would put public sanitation and clean water at risk are now the leading proponents of climate change denial?
Or that these economists would insinuate that government-funded researchers would never find a cure for cancer because that “would put many cancer bureaucrats out of work”?
They would rather invite global ecological and social catastrophe than allow regulatory restrictions on economic liberty.
They spread junk pseudoscience to make the public believe that there is still doubt about the peril of climate change, a tactic they learned from the tobacco companies that for years sowed doubt about science to keep the public from connecting smoking and illness.
By 2014, only 8 of 278 Republicans in Congress were willing to acknowledge that man-made climate change is real.
If the Koch-network-funded academics and institutions were not in the conversation, the public would have little doubt that the evidence of science is overwhelming and government action to prevent further global warming is urgent.
A different kind of catastrophe is under way in the nation’s public school system
The Republican-dominated North Carolina General Assembly cut seven thousand teacher assistants, allotted $100 million less than the state budget office said was needed merely to maintain the schools
Students can no longer take home textbooks in some poor communities, for fear they may be lost.
Where is this money going? Into corporate America, to a new “education industry” of private schools.
The new for-profit virtual charter schools, whose CEO personally earned $4 million in 2014, were found, by one Stanford University research study, to have left their enrolled students falling far behind their public school counterparts.
Just as the radical right seeks, ultimately, to turn public education over to corporations, so it pushes for corporate prisons.
The profit motive could lead private prison corporations to push for tougher sentencing to drive up prison populations and to cut costly items such as job training and substance abuse counselling.
In one emblem of the perverse incentives for-profit prisons have created, private detention centrers paid judges $2.8 million in kickbacks for sentencing thousands of children to their facilities.
If the nation’s health, schools, and prisons, and the world’s climate, are at a watershed moment, so, too, is the U.S. labour force.
The surging inequality on display in America today is in good part due to the outsized power of corporations and wealthy donors over our politics and public policy.
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.
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.
The Koch team, led by Cato, continues to push the Pinochet model
“The harsh reality is that the majority of today’s workforce are heading toward increasingly difficult and, in some cases, financially disastrous, retirements.”
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.
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.
The interpretation of the Constitution the cadre seeks to impose would give federal courts vast new powers to strike down measures desired by voters and passed by their duly elected representatives at all levels—and would require greatly expanded police powers to control the resultant popular anger.
That is why the large donors have invested so heavily in judicial races: to elect judges who will allow the revolution to go forward.
It wants our democracy to be curbed as Chile’s was, with locks and bolts on what the majority can do.
If the cadre has its way, the nation that stands at 138th of 172 democracies in the world in voter turnout will have even fewer people participating in the political process
With fewer people voting, everything will be so much easier to achieve.
Daley points out that the GOP is an election away “from achieving an unimaginable goal in a country that sees itself as a beacon of democracy: a veto-proof supermajority operating without majority support.”
To value liberty for the wealthy minority above all else and enshrine it in the nation’s governing rules is to consent to an oligarchy in all but the outer husk of representative form
That extinguishes “the political we”
If we delay much longer, those who are imposing their stark utopia will choose for us. It will be a permanent decision. There will be no going back.
We may take heed of a Koch maxim: “Playing it safe is slow suicide.”