NEOLIBERALISM IN ACTION
Illustration by Heske van Doornen.
How did a network of libertarian influencers mobilize ideas and resources to restructure American society to reflect their radical “free market” perspectives? In her recent book, Democracy in Chains: The Deep History of The Radical Right’s Stealth Plan for America, historian Nancy MacLean strives to provide an answer to this question.
MacLean views the radical right as a group of “true believers” in freedom, an idea they associate with market freedom, aiming to remove public services and replace them with privatized schools and prisons that respond the market, not voters within a democracy. In doing so, MacLean argues that the radical right will eventually reduce freedom for the majority while privileging the propertied minority. The more power the propertied minority has, the less democratic society becomes. The ultimate target of the radical right, which has gained control of the modern Republican Party, is to change American society to privilege capitalism over democracy even more than it does now.
For libertarian economist James Buchanan, the market mechanism was the most efficient method of allocating resources, which he views as a form of democracy. Educated at the University of Chicago under Frank Knight and Milton Friedman, Buchanan played a significant role in the “stealth plan” of changing the rules of American society, not just people who make the rules. MacLean argues that Buchanan was radicalized at Chicago, where he earned a PhD in economics and learned the “science to support his existing “antigovernment feelings” (p. 36). Buchanan spent most of his teaching and research career in Virginia where he co-authored The Calculus of Consent: The Logical Foundations of Constitutional Democracy with Gordon Tullock.
In extending the market rationality to American politics, Buchanan and Tullock argued that politicians only pursued their own self-interest rather than any broad interests of society. Given that public institutions are led by officials that only pursue their own interests, public governance should be based on the principles of the market. They called this public choice theory, a framework that focused on non-economic decision making and served as a basis for awarding Buchanan the Nobel Prize in Economic Science in 1986. The Cato Institute, a libertarian think tank that was funded by billionaire Charles Koch, viewed The Calculus of Consent as a form of protection for capitalism against government, while MacLean argues that “[i]t might more aptly be depicted as protecting capitalism from democracy” (p. 81).
As a Nobel Laureate, Buchanan created an influential research program at George Mason University, which gained the attention of the Koch Network, which funded and later controlled Buchanan’s program, aiming to leveraged the legitimacy of economic theory to produce a society that was governed by the market, not by democracy. The “stealth plan” of this radical right was to mobilize ideas and resources to change the rules of American society to reflect its free-market perspective, not just who rules. To do so, they had to change the way the rules were rationalized. Buchanan’s public choice theory offered a way to re-conceptualize American law and politics.
On the surface, MacLean’s book offers a critique of libertarianism, although, it could perhaps better be understood as a critique of public choice theory—or neoclassical economics more generally—as a way of thinking and rationalizing society, which became dominant through powerful libertarian social and economic networks. By examining these nuanced power dynamics, MacLean offers a brilliant look at neoliberalism in action. She reveals the real-life experience of neoliberalism by showing us how and why the radical right extended the principles of the market rationality to areas outside conventional limits of the economy.
In her discussion of law and economics, a field of law that draws on the principles of economics, MacLean frames the entire field—rather than elements of it—as an attempt to undermine the broader public interest, while privileging the corporate language of profit, which uses cost-benefit analyses to make decisions. While MacLean makes a very persuasive argument, she overlooks the idea that cost-benefit analyses can be useful, depending on the context and purpose for which they are used.
Beyond this, Democracy in Chains offers an excellent look at the American political process and how seemingly marginal ideas, can become powerful enough to radically alter it.
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