The
Merchant of Menace
By John Andrews
October 13,
2017 "Information
Clearing House"
- About fifteen years ago I was a normal person. I
had an average job, to help pay my average mortgage
and average living costs. I was of average
intelligence and had received an average education.
I thought I pretty much understood how the world
worked, because I followed the news every day on the
BBC and frequently read The Times newspaper which,
as everyone knew, was the best newspaper in the
whole world. If anyone had suggested otherwise I
would have been slightly offended, as if I’d been
called stupid. But the fact was, like most normal
people I knew next to nothing about how the world
really works.
I was perhaps slightly more cynical than the average
person, because many years previously I read an
excellent book called Bodyguard of Lies, by Anthony
Cave Brown. It suggested a darker side to the
business of government than the average person might
suspect. Although Brown’s book was about World War
Two, and suggested that the lies to which the title
referred were justified because of the extreme
circumstances of war, it probably made me just a
little more suspicious of governments than the
average person.
So when the Bush/Blair partnership frogmarched their
countries into an illegal war in Iraq in 2003, I was
possibly a lot more suspicious of their claims than
the average person.
I actually resigned my comfortable job in protest
against Blair’s terrible decision. I wanted to write
a book. I had an idea for a political novel, but
first I needed to do some research. I knew a bit
about government, but not enough.
I’ve always been an avid reader, seldom without a
book on the go since I was at school. But mostly I
had read fiction. Reading fiction is sometimes
better than not reading at all, but it’s actually a
huge distraction, diverting attention away from the
stuff we should be reading. Fifteen years ago I
started reading non-fiction.
My first forays into the research I wanted to do was
history. I wanted the background story. I had a
vague inkling that somewhere there was a different
type of history to the type I learnt at school – the
history of great kings and queens, emperors and
presidents, admirals and generals. Somewhere,
surely, there would be histories of ordinary people.
There are, of course, and what they reveal began to
pour fuel on a slowly-burning fire.
Next I started reading politics, but like history, I
suspected there might be two types of politics – one
type that’s taught in schools and universities and
which fills countless pages in newspapers and
occupies countless hours of TV and radio time, the
sort people can obtain university degrees in; and
another type of politics which somehow remains just
below the radar: mostly unseen and undiscussed, and
definitely not taught in university courses. My
early guides were the well-known greats – Pilger,
Chomsky, Blum, Monbiot… As my range stretched
slightly further afield, to include writers like
Klein and Palast, and as I started trying to
comprehend the world that the likes of Max Keiser
and Matt Taibbi were describing, from their remote
platforms of Russia Today and Rolling Stone, I
realised that I needed to teach myself economics. At
the heart of it all, somewhere, was money.
I first read a bit into economics many years ago. At
school I’d done maths, physics and chemistry, so I
was partially trained in empirical
evidence-gathering and the importance of
peer-reviewed research. My earliest impression of
economics was that it was the purest bunkum I’d ever
seen – a series of unproven, unprovable assertions
dressed up with mathematical symbols to try to give
it some sort of mystical credibility. Perhaps I was
missing something, I thought back then. Perhaps it
was me. But at the time I wasn’t interested enough
to pursue the thing, so I kicked economics into the
long grass – where it remained until about ten years
ago, and I tried once more.
I spent a bit more time with the school textbooks,
but my early impressions of the subject remained
unchanged. When I read the Australian economist
Steve Keen’s excellent Debunking Economics I almost
jumped for joy: here was confirmation from an expert
in the field that all my early suspicions about
economics were well-founded – a view later
reinforced when I read Balogh’s brilliant The
Irrelevance of Conventional Economics – a book that
preceded Keen’s by a couple of decades. Economics
was indeed pure bunkum.
So I dug a bit deeper, tried the original sources.
How could something that’s so important be based on
so little? I read Adam Smith and Keynes. About that
time I picked up a little book that I thought might
be interesting: Confessions of an Economic Hitman by
John Perkins. Jaw-dropping is perhaps the best way
to describe my reaction to it. I couldn’t believe it
was serious. I thought it was some kind of spoof.
Although Perkins described a shadow-world I
suspected existed, I didn’t know if I could take him
seriously. After all, it was just his story, there
was no other verifiable evidence. But it made me
start digging even deeper.
Since then I’ve read quite a lot of
economics-related books, by well-respected
economists such as Galbraith and Stiglitz, but also
less well-known specialists such as Prins, Rickards,
Das, Baker, and Henry. About this time I also read
Joel Bakan’s superb The Corporation, and another
chink of light helped illuminate the darkness even
more: big business was closely connected to the
heart of the problem. Then I found Thom Hartmann’s
superb Unequal Protection and a bit of the history
of how corporations began to achieve their control
of our political system was revealed.
But still the nagging question remained: how exactly
did such an obviously flawed belief system come to
exert so much real power over our supposedly
fool-proof democracy, with its much-vaunted system
of “checks and balances”?
Nancy MacLean’s recent publication Democracy in
Chains pretty much answers that question. It’s a
superbly researched account of how one man, the
economist James Buchanan, helped the super-rich to
seize control of our system of government. As I was
reading her book, I was continually reminded of
Bakan’s work, in The Corporation, where he showed
that the “personality” of corporations is almost
indistinguishable from that of psychopaths. Much of
Buchanan’s work, too, could be seen as psychopathic
– in my view.
The basic reasons for this, I think, are two-fold.
Firstly he appeared to not only have no concern
about the effects of his theories on the vast
majority of ordinary human beings or the planet in
general, but he appears to have shown contempt and
disdain for anyone other than the super-rich or
those he deemed his intellectual equals. Secondly,
right from the very beginning of his rise to power
and influence, he was obsessed with secrecy. He
clearly knew that his work would be rejected by the
wider world if it became known; he knew that it
wouldn’t withstand the challenge of peer-reviewed
debate. So he insisted on secrecy, living and
working behind closed doors in a world of shadows.
The Beginning
This particular story really begins in the first
years following the end of World War Two. Given that
most of the planet was in post-apocalyptic chaos,
something of an intellectual vacuum existed in
planning how the new world economy would shape up.
There were two powerful competing forces. On the one
hand, the old order of super-rich tyrants were
anxious to resume their control of the new world;
but on the other hand, a brash new force, previously
unknown, was strongly asserting itself. Socialism,
with its new and powerful champion in the Soviet
Union, was presenting a major challenge to the old
world order. Its promises of social justice and
economic equality were strong attractions to
hundreds of millions of people who had never known
either, and all around the world new socialist
movements were sprouting up everywhere. The most
important of these were the fledgling socialists in
the powerful western nations, because those
countries would determine the future course of the
world.
In Britain, home of the recently-demised global
empire, Clement Attlee’s Labour Party won the first
general election after the war, trouncing Winston
Churchill, the iconic hero of wartime Britain. Such
a result was truly seismic. Attlee had promised
total social reform of the decrepit and corrupt
regime, and the people listened; so his new
government proceeded to deliver. Massive public
investment would follow, producing tens of thousands
of new homes, nationalised industries, free
university education, decent state pensions and the
incredible National Health Service.
The United States, not yet familiar with its new
role of global emperor, recognised the shift in wind
direction. Its social reforms were nothing like as
extensive as in Britain – mostly because it had
emerged unscathed from the war and was about the
only country capable of supplying the manufactured
goods necessary to rebuild the world. Its economy
boomed. Nevertheless, significant public spending
flowed into new infrastructure, not least of which
was public education, and affordable university
education suddenly became accessible to countless
young Americans from modest family backgrounds. It
was seen as perfectly normal, by the mid-1950s, for
the state to be active in the economy, and for trade
unions to be active in the workplace. As MacLean
puts it,
Almost all professional economists then accepted the
pump-priming doctrines of Keynes to ensure demand to
keep the economy growing…
[T]his refutation of the late-nineteenth century
ideology of the sanctity of private property rights
and the concomitant embrace of an affirmative role
for organized citizens and their government as the
counterbalance to corporate power, had become the
new stance of virtually every western democracy.1
As an aside, it’s interesting to ponder the opinion
of Bruce Cumings, a Korea specialist, who observes
that a significant element of this “pump-priming”
was down to the creation of what Eisenhower would
call the “military-industrial complex” — something
which had never really existed prior to the Korean
War:
The military was never a significant factor in
peacetime American national life before NSC68
announced the answer to how much “preparedness” the
country needed, thus closing a long American debate:
and in mainstream Washington, it has never returned.
[NSC68 was passed through Congress in 1950, allowing
a quadrupling of American “defence” spending] By
1951 the United States was spending $650 billion on
defense in current dollars, and finally reached that
maximum point again in the early part of this new
century – a sum greater than the combined defense
budgets of the next eighteen ranking military powers
in 2009.2
So given the fact that “pump-priming” of the economy
by the state was widely accepted in the 1950s and
1960s as essential, what happened after that to
reverse that thinking, and produce today’s dogma of
economic austerity in almost every field of
government activity — barring the military and
so-called “security” services?
A major contributory factor was a gradual
coming-together of what at the time was a small
minority of academic opinion – those on the far
right of the political spectrum. In the early 1950s
James Buchanan was a young economics graduate from
Chicago University. He’d been tutored by Frank
Knight, the only American-born economist invited to
establish the Mount Pelerin Society, along with the
likes of Friedrich Hayek and Ludwig von Mises. The
society is an organisation of right-wing economists
and other academics funded by the super-rich.
In 1956 Buchanan approached Colgate Whitehead Darden
Jr., president of the University of Virginia, with a
proposal to create a brand new school of economics.
The two men clearly had similar views of how the
Keynesian world was evolving, and they didn’t like
it. Buchanan’s plan was warmly welcomed. They would
establish the Thomas Jefferson Center for Studies in
Political Economy and Social Philosophy. Buchanan’s
naturally conspiratorial nature was revealed in that
name for his new school: he noted privately in his
précis to the president that the venture “needed an
innocuous name that would not draw attention to its
members’ ‘extreme views… no matter how relevant they
might be to the real purpose of the program”.3
He would later write that in such an era: “Our
purpose was indeed subversive.”4
Buchanan appears to have applied one particularly
constant principle to the way his school operated:
secrecy; for MacLean records several instances of
him saying so.
Years after he had established himself inside the
inner circle of powerful conspirators who had
started to transform the very way academics working
in politics and economics actually thought, he
hosted his own clandestine retreats with specially
invited guests. At one such gathering he recorded
that: “The key thing moving forward”, he stressed,
was that “conspiratorial secrecy is at all times
essential.”5
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MacLean
explains Buchanan’s basic strategy:
[K]ey to his plan was the creation of a small
Founders Group of about ten; these men would
generate what he called the Blue Book to reach
another two hundred people through their own
personal contacts. The centerpiece of the operation
would be a Society of Fellows that would include
political leaders and possible donors, along with
scholars…. Remaining were such strategic questions
as ‘How is respectability to be established and
maintained? How much hypocrisy is necessary? How
much internal criticism is to be allowed?’ The key
thing moving forward was to maintain secrecy, with
outsiders kept in the dark.6
Obtaining funding from a variety of wealthy donors,
such as the Scaife Foundation and Charles Koch,
people who well understood the value of securing
academic validation for their enterprises,
Buchanan’s schools sent hundreds of right wing
economists out into the world for half a century.
Buchanan never saw himself as an economic scientist,
but rather a social philosopher, someone who was
determined to “put right” the perverted thinking
that believed the super-rich should pay their way.
Buchanan’s economists would find work at major
corporations as well as other universities who found
that a good way to attract funding from the
super-rich was to employ these people to ensure the
Buchanan gospel could be spread even further. And so
the cancer spread.
Fixing the scales of justice
James Buchanan was clearly a highly effective
strategist. He understood the vital institutional
changes that needed to happen before his vision of a
world directly ruled by the super-rich could be
securely established. Simply changing politicians
through the electoral process would not be enough,
and “he told his allies that no ‘mere changing of
the political guard will suffice,’ that ‘the
problems of our times require attention to the rules
rather than the rulers.’ The project must aim toward
the practical ‘removal of the sacrosanct status
assigned to majority rule’.”7
To this end he formed an alliance with Henry Manne,
an academic who held a very similar world-view to
that of Buchanan. But Manne was a law professor, and
would school his disciples to use the law to help
bring about the same changes that Buchanan’s secret
army of economists were fighting for. So for
decades, aided and abetted by the same billionaires
that paid for Buchanan’s schools, Manne produced a
steady stream of right wing lawyers to match
Buchanan’s output of right-wing economists. Manne’s
“summer legal programs had provided intensive
training in applying free market economic analyses
to legal decision-making for law professors and for
federal judges, luring them with luminaries and
luxury accommodations. To name just one index of how
successful Manne had been: by 1990, more than two of
every five sitting federal judges had participated
in his program – a stunning 40 percent of the U.S.
federal judiciary had been treated to a Koch-backed
curriculum.”8
The devastating effect of manipulating the legal
system is perhaps best revealed by what happened in
Chile. The story of how Chile’s economy was “made to
scream” by the “Chicago boys” as a means of
overthrowing the progressive government of Salvador
Allende is a fairly well-known and very horrific
tale. What is less well-understood is the demonic
role played by James Buchanan after General
Pinochet’s regime seized power.
Seemingly untroubled by the dictator’s murderous
policies, Buchanan agreed to help Carlos Francisco
Caceres, economic adviser to Pinochet, and who he
knew from the Mount Pelerin Society, to draft a new
constitution for the long-term management of Chile.
This story is so important that I make no apology
for quoting MacLean’s telling of it in some length.
Buchanan gave detailed advice:
[O]ver the course of five formal lectures to top
representatives of a governing elite that melded the
military and corporate world, to say nothing of
counsel he provided in private, unrecorded
conversations… He defined public choice as a
‘science’ (even though he, of all people, knew that
there was no empirical research to back its claims)
that ‘should be adopted’ for matters ranging from
‘the power of a constitution over fiscal policy’ to
‘what the optimum number of lawmakers in a
legislative body should be’. He said of members of
his school of thought, ‘We are formulating
constitutional ways in which we can limit government
intervention in the economy and make sure it keeps
its hands out of the pockets of productive
contributors’…
The net impact of the new constitution’s intricate
rules changes was to give the president
unprecedented powers, hobble the congress, and
enable unelected military officials to serve as a
power brake on the elected members of the congress.
A cunning new electoral system, not in use anywhere
else in the world and clearly the fruits of
Buchanan’s counsel, would permanently overrepresent
the right-wing minority party to ensure ‘a system
frozen by elite interests’….
Pinochet personally reviewed the penultimate
document… then announced that citizens would have to
vote a simple yes or no on whether to adopt the new
constitution, in its entirety, in a plebiscite to be
held within a month of its release. The balloting
would take place during the prolonged ‘state of
emergency’ in which all political parties were
outlawed, no voter rolls existed to prevent fraud
(because the junta had had them burned), and no
scrutiny or counting by foreign observers was to be
allowed…
Chile emerged with a set of rules closer to
[Buchanan’s] ideal than any in existence, built to
repel future popular pressure for change. It was ‘a
virtually unamendable charter,’ in that no
constitutional amendment could be added without
endorsement by supermajorities in two successive
sessions of the National Congress, a body radically
skewed by the overrepresentation of the wealthy, the
military, and the less popular political parties
associated with them. Buchanan had long called for
binding rules to protect economic liberty and
constrain majority power, and Chile’s 1980
Constitution of Liberty [a title directly lifted
from Hayek’s book] guaranteed these as never
before.9
Although the inevitable economic turmoil the
constitution created resulted eight years later in
near revolution, and a rather more representative
congress was formed, the legal constraints of the
constitution meant that:
[T]he skewed electoral system still remains in
place, with its provision effectively granting the
one-third minority of right-wing voters the same
representation as the typical two-thirds majority
attracted by center-left candidates.
It is deeply troubling, then, that Chile is held up
today as an exemplary ‘economic miracle’ by the Cato
Institute, Heritage Foundation, and others on the US
right.”10
Buchanan correctly identified the importance of
constitutional reform for ensuring long-term control
by the super-rich of government, and hence the
economy. His gospel is still being followed today.
An article recently published in the New Yorker
reported:
Article V [of the US Constitution] allows an
alternative method of proposing constitutional
amendments, which cuts Congress out entirely:
two-thirds of the state legislatures can call for a
constitutional convention. To be in a position to do
this, the G.O.P. needs to gain control of just one
more statehouse, which could happen as soon as next
year. (Last year, the Times reported that
twenty-eight states had already adopted resolutions
calling for a constitutional convention on a
balanced-budget amendment, an effort supported by
the American Legislative Exchange Council, which is
funded by the Koch brothers, among others.)11
MacLean’s book is a fine, well-researched overview
of just how the far right bribed and manipulated the
academic world to provide the philosophical
justification for changes to a planet which, at the
dawn of the 1950s had started to make some real
progressive socio-economic advances, transforming it
into today’s world of Permanent War and global
economic austerity. Underpinning it all was, and is
to this day, a devious secretive conspiracy –
acknowledged as such by the evil genius behind it –
which was utterly devoid of any intellectual
substance. Buchanan’s lifelong conviction that the
super-rich should have absolute control of the
economy – a view that’s widely held today – was (and
is) unburdened by any evidence whatsoever to support
it.
Indeed, even a sympathetic economist soon cited as
‘the major deficiency’ of [Buchanan’s] Virginia
School ‘the failure to search for empirical tests of
the new theories’.12
Similarly lacking in any of Buchanan’s work, as it’s
still lacking today in the work of his disciples,
was any sense of morality or responsibility for the
wider welfare of our planet generally and for the
majority of humanity in particular.
The scholars were conducting, in effect, thought
experiments, or hypothetical scenarios with no true
research – no facts – to support them, while the
very terms of their analysis denied such motives as
compassion, fairness, solidarity, generosity,
justice, and sustainability.13
A constitution for the people
Most people are normal people, in the same way as I
was a normal person fifteen years ago. They have no
idea about the depth of cynicism and downright evil
to which their trusted leaders will sink in order to
further enrich themselves (for they are invariably
rich already), and/or seize more power. Most normal
people like to sneer at their politicians and say
they do not trust them, but the fact is that mostly
they do – that’s why they keep on voting in a
basically rigged electoral system. For all their
bluster and affected contempt, they have no real
inkling of just how depraved our political system
is, nor how monstrous the people who control it.
James Buchanan was beneath contempt, as are all of
those who share his views today. He was clearly not
a nice person:
(Even among his comrades, Buchanan’s red-faced rages
were the stuff of legend.) His insistence on having
his own way, other colleagues also reported, wrecked
the give-and-take on which communal life depended… [E]ven
administrators who appreciated Buchanan’s
contributions lost patience with his bullying.14
So it was possibly fitting that,
When he died in 2013, neither Koch nor Fink, nor
Cowen nor Meese [whom Buchanan supported and
possibly considered friends], bothered to attend his
memorial service. Why should they? His days of
usefulness to them had passed.15
If there’s one useful lesson to be learnt from
Buchanan’s story (apart from the obvious evidence it
provides of the evil geniuses who influence those
who rule our lives), it’s the example of the
effectiveness of constitutional reform. Buchanan
understood quite early on the importance to his
mission of laws generally, and constitutional laws
in particular: “The problems of our times require
attention to the rules rather than the rulers.”
Just as he helped to write a constitution for the
super-rich to control the 99%, so too could we have
a constitution for the 99% to control the
super-rich.
John Andrews is a writer and political activist
based in England. Check out John's books: Fiction:
The Road to Emily Bay;
Non Fiction:
The School of Kindness;
The People’s Constitution.
Read other articles by John.
Democracy
in Chains, Nancy MacLean, pp. 46 and 47. [↩]
The Korean War: A History, by Bruce Cumings, p. 217.
[↩]
MacLean, p. 48. [↩]
Ibid, p. 46. [↩]
Ibid, p. 117. [↩]
Ibid, p. 120. [↩]
Ibid, p. 184. [↩]
Ibid, p. 195. [↩]
Ibid, p. 158 – 161. [↩]
Ibid. p. 166. [↩]
Jelani Cobb, Republicans and the Constitution, The
New Yorker, March 13, 2017. [↩]
MacLean, p. 79. [↩]
Ibid, p. 97. [↩]
Ibid, p. 171. [↩]
Ibid, p. 204. [↩]
This
article was originally published by
Dissident Voice
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