Part 3 – Law and Economics Programs: Conceived in Opposition to Civil Rights and Dedicated to the Proposition that Majorities Should Not Rule

The last post introduced The Calculus of Consent and explained its pivotal role for Henry Manne and for the development of Law and Economics programs at US law schools. (Read more about Law and Economics programs here). What was this book that was so critical for Manne, “the true founder of law and economics,” and under what circumstances was it written?

In his 1963 review, Manne admits that the reading of the book “frequently is very difficult, and few compromises have been made…to make the going easier.”[1] In his 1987 article “The Calculus of Consent and the Constitution of Capitalism,”[2] Dwight R. Lee explains that the essential argumentation of the book included the following:

  • There is no “general interest” or “public interest” as such; there is only the self-interest of each individual;[3]
  • The self-interest of each individual is advanced only through market exchanges of private property under a capitalistic order: “No other economic order comes close to capitalism in fostering social harmony and widespread prosperity, that is, in promoting the general interest;”[4]
  • In a market (or capitalistic) economy, the principal if not only purpose of government is to protect private property rights;[5]
  • The power of the government should be limited, preferably through constitutional amendment, in such a manner that it would be impossible for the government to infringe upon the market process through “predatory behavior,” predatory behavior being defined as the violation of private property rights.[6]

In sum, The Calculus of Consent argues that the democratic notion of majority voting should be rejected in favor of requiring unanimous consent. The problem with majority rule, according to Buchanan and Tullock, is that it results in “overinvestment in the public sector.”[7] This violates the interests of the minority and limits private capital accumulation and investment, and thus limits economic growth. Only measures that are adopted with unanimity can be understood to be in the public interest. Or, as Charles K. Rowley puts it in his Introduction to a 2004 reprint, the book identifies “the principle of unanimity as the ultimate normative benchmark,”[8] in rejection of “politics as a mechanism for conflict resolution and of the principle of majority rule as an absolute doctrine of popular sovereignty.”[9]

Lee describes The Calculus of Consent as offering a means of “protecting capitalism from government.”[10] In her book Democracy in Chains,[11] Nancy MacLean states “it might more aptly be depicted as protecting capitalism from democracy.”[12] MacLean further explains:

[Buchanan and Tullock] made it clear that they preferred the constitutional rules of 1900 rather than 1960 – a kind of dog whistle to those who would catch the reference. It was that of the unique period referred to by legal scholars as the era of Lochner and Plessy, two pivotal Supreme Court decisions that ensured extreme economic liberty for corporations and extreme disempowerment for citizens on matters from limits on working hours to civil rights…[Buchanan argued] that representative government had shown that it would destroy capitalism by fleecing the propertied class—unless constitutional reform ensured economic liberty, no matter what most voters wanted.[13]

In their preface to The Calculus of Consent, Buchanan and Tullock explain that the seeds for the book were planted in 1958-59 at the University of Virginia, where Buchanan was head of the Thomas Jefferson Center for Studies in Political Economy and where Tullock had been awarded a research fellowship.[14]

In Democracy in Chains, MacLean draws a direct line from opposition to the Supreme Court’s 1954 decision in Brown v Board of Education to the creation of the Thomas Jefferson Center.[15] She recounts how in 1956, two years after the Brown decision, Buchanan submitted to Colgate Darden, the President of the University of Virginia, a proposal for the creation of an economics program within the university’s economics department that would be guided by  the traditions of “old fashioned libertarians” and “’Western conservatives’ who feared the ‘revolt of the masses.’”[16] Buchanan argued that the creation of such a center was urgent because of the Brown decision, which accentuated the “problems of equalitarianism,” including “the tax structure,” “income redistribution” and “the welfare state.”[17] Buchanan explained to Darden that the center needed to have an innocuous name so as to “not draw attention to its members’ ‘extreme views…no matter how relevant they might be to the real purpose of the program.’[18]

MacLean’s book recounts in detail how the Thomas Jefferson Center, once created at the University of Virginia, not only fostered the collaboration of Buchanan and Tullock on The Calculus of Consent,[19] but also served as the prototype for the Center for Study of Public Choice that Buchanan and Tullock later created at George Mason University—the same university whose law school Henry Manne came to head in 1986, as a result of Buchanan and Tullock’s orchestrations.[20]

Many warmly welcomed and praised MacLean’s book upon its publication. For example, George Monbiot wrote that the book is “the missing chapter: a key to understanding the politics of the last half century.” And Genevieve Valentine wrote the “sixty year campaign to make libertarianism mainstream and eventually take the government itself” is at the heart of the book.

On the other hand, some also heavily criticized it. Two vocal critics have been Henry Farrell and Steve Teles. Writing in the Boston Review, they refute MacLean’s contention that the school of public choice emerged as a response to the Supreme Court’s decision in Brown. They reject what they describe as MacLean’s argument that “Buchanan discovered a political ‘technology’ or ‘operational strategy’ for undermining liberalism, and this technology, as applied by Charles Koch, explains why the US right has been so successful in the last two decades.” In doing so, they acknowledge the potential importance of the story MacLean tells:

If this were all true, it would be a historical (and political) discovery of the greatest importance. It would radically alter our understanding of the history of the American right, placing a semi-peripheral individual and intellectual movement at the heart of the story. It would also mean that an intellectual movement that has usually been seen as motivated by its general opposition to regulation and the welfare state would instead have its origins in the white backlash against court-enforced desegregation.

Yes, Farrell and Teles concede, if MacLean’s story was an accurate one, it would force us to take a much more careful look at the libertarian movement in the United States—it would force us to recognize that its origins lie in large part not in an ideology of smaller government for its own sake, but in an ideology of smaller government for the sake of racism. That is, smaller government for the sake of continuing—entrenching—the economic and social subjugation of people of color generally and of African Americans in particular.

Yes, Farrell and Teles concede, this would be highly remarkable, if only it were true. The problem is, they assert, it is not true. Why is it not true? Because, they argue, “strong claims require strong evidence,” but “MacLean has scanty support:”

The problem with MacLean’s claims about Buchanan’s underlying motivations…is that they are her own interpolation rather than directly grounded in the source material she provides. MacLean does not back up her contention that the foundation of Buchanan’s entire school of public choice was motivated in his white Southern resentment of Yankee intervention with textual evidence. Instead, the reader has to rely on her belief that “individual liberty” had a coded meaning for Buchanan and the president whom he was writing to. This is a decidedly slender reed to support such a massive claim.

In sum, Farrell and Teles say that given MacLean does not have sufficient proof of her claims regarding Buchanan’s racist motivations, nor of his historical importance in the conservative “intellectual movement,” she should stop making such claims.

Let’s say that Farrell and Teles are right. That is, let’s say that Buchanan’s role in the development of the conservative intellectual movement was too small to be significant (an assertion with which Henry Manne would certainly disagree[21]) and that, even if Buchanan’s role had been significant, there is no proof that he was motivated by racism. In that case, where can we turn to know who did play a significant role and to better understand what were their motivations?

The next post will propose a response to that question.

Related posts on this site:

Chapter 27: Rules for a Flat World (Or Regulatory Dystopia)

Access to Justice vs. Revenue: A Zero-Sum Game?

You Asked For Research? You Got It! Now What Are You Going to Do With It?

Democracy? It’s Messy. Who Needs It?

The Privatization of “Legal Infrastructure,” the End of Net Neutrality, and the Steady Erosion of Constitutional Protections

Law and Economics Programs at US Law Schools

Law and Economics Programs at US Law Schools: Conceived in Opposition to Civil Rights and Dedicated to the Proposition that Majorities Should Not Rule: Part 1, Part 2, and Part 4

[1] Henry Manne, “Book Reviews: The Calculus of Consent: Logical Foundations of Constitutional Democracy by James M. Buchanan and Gordon Tullock,” George Washington Law Review 31 (1963): 1071, 1065-1072.

[2] Dwight R. Lee, “The Calculus of Consent and the Constitution of Capitalism,” Cato Journal 7 (1987): 331-36, http://heinonline.org/HOL/LandingPage?handle=hein.journals/catoj7&div=32&id=&page=.

[3] Ibid., 333.

[4] Ibid.

[5] Ibid., 332.

[6] Ibid.

[7] Buchanan and Tulluck, The Calculus of Consent, 125, 148. See also Charles K. Rowley, Introduction to The Calculus of Consent: Logical Foundations of Constitutional Democracy, The Selected Works of Gordon Tullock, Vol. 2 (Indianapolis: Liberty Fund, 2004), xiv.

[8] Rowley, Introduction to The Calculus of Consent, xv-xvi.

[9] Ibid., xvi.

[10] Lee, “The Calculus of Consent and the Constitution of Capitalism,” 332.

[11] Nancy MacLean, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America (London: Scribe, 2017).

[12] MacLean, Democracy in Chains, 81.

[13] Ibid.

[14] Buchanan and Tulluck, The Calculus of Consent, 15.

[15] MacLean, Democracy in Chains, 45-60.

[16] Ibid., 45.

[17] Ibid., 46.

[18] Ibid., 48.

[19] Ibid., 76-81.

[20] Ibid., 108-111, 115-126, 169-89.

[21] Manne described Buchanan as “one of the great towering figures of intellect in the world in the 20th and early 21st century.” “Dr James Buchanan’s Contributions to Social Philosophy and Political Economy,” Mercatus Center, published November 14, 2014, 2:05, https://www.youtube.com/watch?v=NeDf7Xhk9WY&t=3494s.

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