The Master Class on the Make

How the white backlash found its academic bona fides


In December 1992, an obscure academic journal published an article by economists Alexander Tabarrok and Tyler Cowen, titled “The Public Choice Theory of John C. Calhoun.” Tabarrok and Cowen, who teach in the notoriously libertarian economics department at George Mason University, argued that the fire-breathing South Carolinian defender of slaveholders’ rights had anticipated “public choice theory,” the sine qua non of modern libertarian political thought.

How had the two ambitious libertarian theorists stumbled into Calhoun’s embrace? It’s a tangled saga, one that has come in for a great deal of controversy with the recent publication of a critical study of the libertarian movement’s modern rise to prominence. During the Cold War, the American liberal state was forced to confront the hypocrisies of American-bred racial apartheid from a new vantage, as Communist critics assailed the backward state of race relations at the heart of the self-styled Free World. It thus became urgent for conservative thinkers seeking to reaffirm traditional prerogatives of white majority rule to recast their commitments on a new intellectual footing. And this is where Tabarrok and Cowen’s beloved mentor, James M. Buchanan—a longtime fixture in the Mason economics program—came in. Buchanan had revolutionized American political thought with a simple thesis aimed at discrediting the legitimacy of the liberal state at its source: the notion that it could, and did, effectively represent the interests of a greater public good. Buchanan argued instead for what he called public choice theory—the idea that politicians have always acted out of self-interest in ways that discriminated against some citizens.

Astutely picking up on the implications of Buchanan’s doctrine, Tabarrok and Cowen enumerated the affinities public choice shared with Calhoun’s fiercely anti-democratic political thought. Calhoun, like Buchanan a century and a half later, had theorized that majority rule tended to repress a select few. Both Buchanan and Calhoun put forward ideas meant to protect an aggrieved if privileged minority. And just as Calhoun argued that laws should only be approved by a “concurrent majority,” which would grant veto power to a region such as the South, Buchanan posited that laws should only be made by unanimous consent. As Tabarrok and Cowen put it, these two theories had “the same purpose and effect”: they oblige people with different interests to unite—and should these interested parties fail to achieve unanimity, government is paralyzed.

In marking Calhoun’s political philosophy as the crucial antecedent of public choice theory, Tabarrok and Cowen unwittingly confirmed what critics have long maintained: libertarianism is a political philosophy shot through with white supremacy. Public choice theory, a technical language nominally about human behavior and incentives, helps ensure that blacks remain shackled.

Chains of Fools

In her 2017 book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America, historian Nancy MacLean argues that Buchanan developed his ideas in service of a Virginia elite hell-bent on preserving Jim Crow. In response to MacLean’s blunt criticism, several libertarian attack dogs have churned out dozens of essays and critiques—many prominently featured in the Washington Post’s online policy vertical The Volokh Conspiracy—howling that MacLean is not only wrong, but perhaps even guilty of intellectual fraud, ideological bad faith, and other trespasses against proper academic inquiry.

Libertarianism is a political philosophy shot through with white supremacy.

The sheer volume and intensity of these protests suggest that MacLean’s observations have hit a nerve. And by historicizing the putatively neutral and scientific character of Buchanan’s research, MacLean has apparently shaken the pediment supporting the altar of this libertarian saint. Buchanan’s many ardent defenders seem unwilling or unable to imagine that their hero’s ideas have unsavory historical underpinnings—or to focus forthrightly on the key continuity that Cowen and Tabarrok underlined, however inadvertently, at the heart of the libertarian project. Just as Calhoun developed his novel political philosophy in response to the growing fear among his class of southern slaveholders that a Northern majority might seek to abolish slavery, Buchanan’s public choice theory was an innovative approach to resisting federal enforcement of civil rights in the South.

MacLean provides a few pieces of evidence upon which she rests her case establishing the racist mainsprings of Buchanan’s work. In 1957, for example, Buchanan sent a private letter to his former professor Frank Knight at the University of Chicago, where Buchanan earned his PhD in economics. In this letter, Buchanan expressed regret that President Eisenhower sent federal troops to protect the nine black students then seeking to desegregate Little Rock Central High School. In contrast, he believed desegregation should be a gradual, voluntary process, according to MacLean. Pointing out that “going slow” in matters of racial justice was then a common refrain for postwar liberals and conservatives alike, Buchanan’s defenders have further sought to refute MacLean’s claims about Buchanan’s intentions by pointing to other public statements from Buchanan that favor the advancement of racial justice.

But intention is beside the point. More important is effect. And in this regard, MacLean’s argument is rock solid. Public choice theory, which grew in stature across the late twentieth century and is now a bedrock conservative doctrine marketed to right-wing policymakers by the billionaire Koch brothers, has indeed tilted the scales of justice in favor of the white, rich, and powerful.

Choice at all costs

Buchanan’s own intellectual biography underscored these core commitments. He had converted to neoliberalism—the notion that markets better serve people than the state—while studying with Chicago school economists like Knight and Milton Friedman. But his unique spin on free market dogma was spawned in the Petri dish of 1950s Virginia politics. For instance, as an economics professor at the University of Virginia, where Buchanan established a cadre of likeminded economists, he developed ideas in support of state legislators seeking to hamstring school desegregation efforts in the wake of Brown v. Board of Education.

Buchanan proposed that Virginia could finesse the question of full compliance with Brown and avoid leaving the impression that the state wished to revert to crude Jim Crow standards of race privilege. Buchanan’s innovative solution was the introduction of school vouchers, which would empower parents to send children to schools of their choice on the public dime, while also working to buttress the prerogatives of white and affluent populations in restricting broader cross-racial access to the public good of state-financed education. He contended that a voucher system was the best allocation of educational resources because it would compel schools to compete for students and resources, which would lead to educational improvement. On paper, at least, Buchanan was advocating a market-based, seemingly race-neutral policy solution. In effect, however, it allowed for the continued perpetuation of segregation. For example, Virginia’s Prince Edwards County shuttered its public schools in 1959 while doling out vouchers to students who attended private schools that only accepted white children. As a result, black children in Prince Edwards County went without formal education for more than five years.

In enlisting in the policy frontlines of Virginia’s massive resistance to civil rights, Buchanan was launching what would be a long and productive career of tailoring economic ideas to serve reactionary forces. He would later codify all this work in the 1962 book that kick-started public choice theory, The Calculus of Consent, co-authored with Gordon Tullock, another University of Virginia economist. Buchanan and Tullock’s study remains a central touchstone in libertarian thought.

The Calculus of Consent took the neoliberal economic theory of the Chicago school and applied it to the function of government. Chicago economists had long posited that economic exchange exists because people are different: people trade with one another because they have different needs and interests. Buchanan and Tullock wondered why such a common-sense theory of individual difference—better known as rational choice theory, which explained almost everything they thought anyone needed to know about economic behavior—had not yet been applied to political behavior. The Calculus of Consent attempted to remedy this gap.

In applying rational choice theory to politics, Buchanan and Tullock discovered an ironic incongruence: whereas self-interest played out beautifully in the market, self-interest in government, although unavoidable, had disastrous consequences. For neoliberal apostles of market sovereignty, the key to unraveling this seeming paradox was to deconstruct the logic of state coercion. The market was the fairest allocator of resources because individuals were always in the best position to make decisions for themselves about what to buy and sell and for how much; Adam Smith was right to hymn the mysteries, and the majesty, of the “invisible hand.” In contrast, politicians distorted the natural rhythm of the market, also out of self-interest: legislators who needed votes for reelection enacted policies that won over majorities. But the latter had the perverse market-distorting effect of overproducing public goods like education or health care, goods that public choice theorists and their conservative patrons believed were better left to market forces to supply even if democratic majorities thought otherwise.

Rental Agents

Buchanan and his libertarian acolytes began referring to such forms of government-produced advantage as “rents.” Within the confines of libertarian orthodoxy, the idea of rents could take on a distinctly smash-the-state underdog connotation. After all, Buchanan and his followers reasoned, government advantage was by definition unfair to those not protected by the state. Most often, such theorizing targeted social welfare. Government health care subsidies to the poor and elderly were rents—i.e., illegitimate fees imposed on the market by state actors—that distorted the true market for health care. State funds to public universities were rents that distorted the market for higher education. And so on.

Public choice theory is the Marxism of the master class.

In the backlash against taxation and social programs that bubbled up to the surface of American political culture in the 1970s and after, this critique of publicly subsidized rent-seeking countervailed the demagogic rhetoric that targeted an undeserving poor: i.e., politicians promised poor blacks welfare benefits in exchange for votes. It’s no wonder that conservative politicians since Ronald Reagan have adopted public choice theory as a rationale for wrecking the New Deal, or that centrist liberal politicians like Bill Clinton have enacted policies like welfare reform that operate by the very same logic.

It’s also no wonder that critics of public choice theory like MacLean have pounced on its implicit racism. At the same time, though, MacLean’s criticisms and the ensuing firestorm over Democracy in Chains have curiously produced a market-distorting effect of their own. As powerful as white backlash is, in the forums of libertarian debate and American political culture generally, the broader appeal of public choice resides—much as the modern liberal state’s pursuit of administrative racial justice itself did—in the foundational intellectual directives of the Cold War.

Marxism for the Makers

The historian S. M. Amadae argues in her book, Rationalizing Capitalist Democracy: The Cold War Origins of Rational Choice Liberalism, that libertarian thought grew influential in the second half of the twentieth century primarily because of the Cold War. More to the point, public choice theory among other libertarian philosophies developed as an ideological weapon to win the war against Marxism. It sought to match Marxism in its revolutionary claims about freedom while also refuting Marxism’s ability to carry through on its promises.

In a 1993 lecture titled, “Socialism Is Dead,” Buchanan proclaimed that “public choice theory” had unmasked the “normative delusion” that “the state was, somehow, a benevolent entity and those who made decisions on behalf of the state were guided by consideration of the general or public interest.” Here, once more, was the old Calhounian refrain: since politicians acted out of self-interest, the state was incapable of governing on behalf of the public interest. In fact, Buchanan maintained, there was no such thing as a public interest, or if such a thing could be spoken of, it was at bottom, a vague, even meaningless term precisely because it papered over an ineluctable will to power on the part of politicians. Investing authority in the state in the name of an abstraction like the public interest represented the slippery slope leading to totalitarianism.

Even worse than vague progressive concepts like the public interest were Marxist abstractions like class. In The Calculus of Consent, Buchanan and Tullock articulated their opposition to “any theory or conception of the collectivity which embodies the exploitation of a ruled by a ruling class.” Buchanan thought class was an especially wrongheaded way to think about the organization of power in the United States, where market exchange, backed by contract law, distributed power in such a way that people remained free agents unencumbered by false solidarities like class. Such, at any rate, was the libertarian ideal. And the great ideological premise of public choice theory was to highlight this ideal in opposition to the Marxist dystopia and other allied forms of creeping collectivism.

Corporate Liberalism and its Captives

During the Cold War, Marxism was caricatured as a theory of collectivism—a caricature lent considerable credence by the Soviet Union, the first nation to proclaim itself Marxist, while vesting all power in an authoritarian state. In contrast, public choice was a theory of freedom that portrayed the state as the embodiment of repression. What gets lost in this formulation is Marxism’s actual role as a theory of freedom that actually saw the state as an engine of repression. As Marx and Engels famously asserted, “the executive of the modern state is but a committee for the affairs of the bourgeoisie.” Or as Buchanan and Tullock recognized, Marxism “incorporates the polity as one means through which the economically dominant group imposes its will on the downtrodden.” For Marxists, socialist revolution not only entailed liberation from capitalism but also liberation from the state.

Marxism was steeped in anti-statist sensibilities from the beginning. When Marx died in 1883, one of his New York City eulogists decreed that “now it is the duty of true lovers of liberty to honor the name of Karl Marx.” The logic of the Cold War’s mutually assured ideological destruction rendered such statements unintelligible. But as political theorist William Clare Roberts demonstrates in Marx’s Inferno: The Political Theory of Capital, Marx believed that “only the defeat of this servile and violent state can establish the conditions of emancipation.” This was especially true in the later sections of Capital, where Marx discussed “primitive accumulation”—his term for slavery, colonialism, and other forms of brute capitalist exploitation made possible by direct state intervention.

Marxist anti-statism persisted into the twentieth century in the works of Antonio Gramsci, who posited that the ruling class used the state and other cultural institutions to establish ideological power over the working class. This form of repressive power, which Gramsci termed hegemony, was especially insidious because it allowed the working class to identify with the state even though it represented the interests of capitalists. The people gave the state their consent to oppress them.

Nicos Poulantzas, a New Leftist who specialized in thinking about the role of the capitalist state in an era of social democracy, speculated that the modern state did not necessarily work for individual capitalists, whose interests were varied and often in conflict. Rather, the state worked more broadly to buttress capitalism’s long-term sustainability. In its efforts to tame an explosive economic system, the state was often forced to make hard decisions that some individual capitalists found unappealing. For instance, in the face of mass unemployment during the 1930s, the modern capitalist state was compelled to expand entitlements to the working class, which it could only do by taxing the wealthy. The purpose of the state, in other words, was pacification.

An American version of anti-statist Marxism emerged among New Left thinkers preoccupied with the morally disastrous Vietnam War, which these young intellectuals blamed on the close collusion between capitalists and the liberal state. The historian Martin Sklar coined the term “corporate liberalism” in 1960 to explain this phenomenon. In Sklar’s view, twentieth-century liberalism did not emerge to tame corporate power, as many wrongly believed. Rather, corporate power captured the American state in a class-conscious effort to restore order to a system that otherwise seemed chaotic and unpredictable. Capitalists and the political elite thus conspired to keep power out of the hands of most Americans, not to mention the Vietnamese. That many Americans unwittingly consented to this arrangement did not make corporate liberalism any less repressive.

Free and Uneasy

In sum, public choice theory and Marxism rhyme. Buchanan and Tullock recognized as much even as they bent over backwards to explain such resonances away. “The class-dominance approach to political activity,” they wrote, “is acutely related to our own in an unfortunate terminological sense. By historical accident, the class-dominance conception, in its Marxian variant, has come to be known as the ‘economic’ conception or interpretation of State activity.” This Marxist approach, Buchanan and Tullock fretted, “has caused the perfectly good word ‘economic’ to be used in a wholly misleading manner.”

But there was nothing accidental about this acute relation. Both Marxism and public choice theory separated economy from polity and both pointed to the economy, or in the case of Marxism, the realm of human activity beyond the state—civil society—as the place where freedom is nurtured.

Put another way, public choice theory turned the Marxist theory of the state on its head. As opposed to wishing to free the masses from a state controlled by the capitalist elite, Buchanan wished to free the capitalist elite from a state controlled by the unruly masses. And this returns us, suitably enough, to John C. Calhoun.

In addition to civil rights protections, the state is also Vietnam. It is drones, bank bailouts, tax cuts for the wealthy, prisons. The state is Trump.

Richard Hofstadter’s 1948 book, The American Political Tradition: And the Men Who Made It included an essay titled “John C. Calhoun: The Marx of the Master Class.” Hofstadter wrote that Calhoun foreshadowed Marx in that he “had a keen sense for social structure and class forces.” Calhoun “placed the central ideas of ‘scientific’ socialism in an inverted framework of moral values and produced an arresting defense of reaction . . .” In Calhoun’s words:

There is and always has been in an advanced stage of wealth and civilization, a conflict between capital and labor. The condition of society in the South exempts us from the disorders and dangers resulting from this conflict, and which explains why it is that the political conditions of the slaveholding states has been so much more stable and quiet than that of the North.

Marx made a similar argument in his writings about the Civil War—except that he reversed the basic terms of Calhoun’s appraisal of the South as a paternal model of quasi-feudal social peace. Marx welcomed the Civil War and the destruction of slavery because he believed such forces would create conditions more favorable to organizing the working class, since a free labor system would no longer need to compete with slavery. In other words, the disorder that Calhoun feared, which would bring power to people of the lower order, was precisely the disorder that Marx welcomed.

Calhoun is an analog to Marx, in other words, in the same way that public choice theory is an analog to the Marxist theory of the state. In the name of freedom, public choice theory would shackle the ninety-nine percent of us who exist in the lower orders of neoliberalism. Public choice theory is the Marxism of the master class.

In order to reclaim the mantle of freedom, we must reclaim the anti-statism of Marxism, the liberty embedded in a theory of freedom for all. It is perfectly understandable why liberals and leftists embraced elements of statism in the twentieth century. The state not only tamed the chaos of a market-based economy that left most people deeply insecure, it also protected the rights of people in dire need of such protection, namely black Americans.

But this is only half the story. If we only focus on this half, we will remain mystified as to why so many people are enthralled with libertarianism. For in addition to civil rights protections, the state is also Vietnam. It is drones, bank bailouts, tax cuts for the wealthy, prisons. The state is Trump. If we want to reclaim the mantle of liberty from the master class and their court intellectuals, we must also reclaim a theory of the state for the masses. And now that Trump is overseeing what looks to be the final capitalist enclosure of state power, the urgent project of democratic revival must hinge on nothing less than the full repudiation of libertarian fantasy in public life.

Andrew Hartman teaches history at Illinois State University and is the author of A War for the Soul of America: A History of the Culture Wars.

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