August 9, 2017

Public Choice Theory and the Politics of Good and Evil

So now we finally know. Libertarians aren’t the ditzy bumblers exemplified by 2016 presidential candidate Gary (“What is a leppo?”) Johnson. Nor are they ideological extremists, like the proprietor of the Ayn Rand School for Tots. In reality, the libertarian movement is a cabal of racist plutocrats engaged in “a fifth-column assault on American democratic governance” at the behest of their billionaire paymasters, the Koch brothers.

Or so Nancy MacLean, the William H. Chafe Professor of History and Public Policy at Duke University, tells us in her widely discussed book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. As a long-time critic of both libertarianism and the branch of economics, public-choice theory,[1] on which MacLean focuses most of her attention, I was open to being persuaded by her dark musings. Yet, as a small army of aggrieved libertarian bloggers has pointed out, MacLean presents no evidence for her sensationalistic accusations. Instead what she presents are quotations taken out of context or so mangled by ellipses that they suggest the opposite of the quoted libertarians’ intentions (some examples can be found here, and here, and here, and here, and here, and here, and here, and here). As a work of history, this book is a fiasco.

Nevertheless, it is worth reading. Libertarians can benefit from it if they put aside the author’s conspiracy theorizing and think about how their movement is perceived by those outside it. Non-libertarians can take the occasion to wonder if MacLean’s Manichean view of politics is not uncomfortably similar to their own. Theorists of democracy can think about how close public-choice theory is to one of the most common forms of political criticism in mass democracies: the very form of criticism MacLean directs at libertarians. In short, everyone can profit from the chance to reflect on why MacLean, who in previous work showed herself to be a fine historian, was able to call forth no interpretive charity in attempting to understand libertarians in general and, in particular, her bête noir, James Buchanan, the 1986 Nobel laureate in economics and founder of the public-choice school.

Libertarianism as a Conspiracy of Evil

Consider MacLean’s most explosive claim: that public-choice theory was motivated by Buchanan’s desire to preserve the “way of life” of white Southerners who in the 1950s, early in his career, were being threatened by desegregation (p. xiv). MacLean doesn’t provide a shred of evidence to back up this claim. Seeking to channel Buchanan, who was born in Tennessee but was teaching in Virginia when Brown v. Board of Education was issued, MacLean writes: “Northern liberals were now going to tell his people how to run their society. And to add insult to injury, he and people like him with property were no doubt going to be taxed more to pay for all the improvements that were now deemed necessary and proper for the state to make. What about his rights? . . . . I can fight this, he concluded. I want to fight this.” (p. xiv, italics in original.) One of MacLean’s libertarian critics makes much of the fact that the words she italicizes are not actually quotations from Buchanan: unwary readers might assume otherwise. But MacLean doesn’t even provide evidence that Buchanan held the un-italicized thoughts she puts into his head. She allows back-handedly that “Buchanan was not a member of the Virginia elite. Nor is there any explicit evidence to suggest that for a white southerner of his day, he was uniquely racist or insensitive to the concept of equal treatment.” Yet she doesn’t provide any indirect evidence that he was at all racist or insensitive to the concept of equal treatment.

The source of MacLean’s anti-empirical historiography can be found in the next sentence: “And yet, somehow, all he saw in the Brown decision was coercion” (emphasis added). The “somehow” implies that Buchanan did not really believe what he said he believed (despite the absence of evidence for this). But MacLean fails to recognize that libertarians are positively obsessed by “coercion,” blinding them to just about everything else. It is wrong to accuse them of anything more than the narrowness that marks the thinking of any ideologue.

Breaking: Ideologues Can Be Obtuse

Yet, to be charitable to MacLean, she clearly finds it incredible that libertarianism could make sense to any intelligent person. Therefore, she has little choice but to think that libertarianism must be a mask for something deeper and darker. The tacit premise of the book is that nobody can honestly believe that the opposite of coercion, “freedom,” overrides claims of need and welfare. But having been a libertarian myself, I can testify that that’s exactly what libertarians honestly believe. Or—to be charitable to them—what they honestly think they believe.

Libertarians take the sanctity of “liberty” (or “freedom”) for granted. And they fail to question the legitimacy of private property ownership, so they include property rights among our sacrosanct freedoms. Thus, government incursions on property rights are as impermissible as coercion by private actors—also known, they are eager to point out, as “criminals.” To libertarians, then, taxation is theft. Conscription is slavery. And government, whose every action is backed by “men with guns” (the police), is inherently suspect. All of these beliefs are, to libertarians, simply logical consequences of their commonsensical commitment to liberty.[2]

Political theorists argue that libertarians’ use of terms such as coercion, liberty, and freedom is “moralized.” In other words, libertarians’ definitions of these terms beg the question against those who think that, for example, private property diminishes the freedom of the poor or of workers.[3] In response, libertarians will ferociously argue about the “correct definition” of these terms.[4] Such arguments serve to emphasize how far removed libertarians are from the concerns that have persuaded so many people—the vast, vast majority, across the entire planet—to embrace “government intervention,” even if it violates freedom. These concerns revolve around the concrete social and economic problems suffered by people in modern societies. MacLean makes it abundantly clear that she, too, is absorbed by these concerns. So (apparently) she refuses to accept that libertarians’ obtuse preoccupation with “liberty,” correctly defined, explains their (apparently) cold indifference to the victims of social and economic problems. Thus, she searches for racist, plutocratic explanations of their indifference.

The Epic Libertarian Fail

Yet while it would have been more charitable, and more accurate, for MacLean to interpret libertarians as obtuse, it would not have been entirely fair. On the other side of the equation is the singular entanglement of libertarianism with economics—particularly Austrian and Chicago-school economics.

No other political movement has as one of its bibles a tract entitled Economics in One Lesson.[5] No other movement’s first institution of any significance was called the Foundation for Economic Education. Yet if libertarians really believed, deep down, what they tell themselves they believe about the sanctity of liberty-cum-private property, the teachings of economics would be irrelevant to them: the freedom of property owners would be inviolate regardless of its economic effects. Yet libertarians are even more obsessed with these effects than they are with the linguistics of “liberty.” While they do honestly believe that government is inherently suspect because it is inherently coercive, they also honestly believe that government action to solve social and economic problems is inherently counterproductive. At the heart of libertarianism is not a deliberate, sinister defense of privilege, but a confused acceptance of two potentially contradictory ideas: a philosophical critique of government as inherently coercive and an economic critique of government as inherently counterproductive.

In my experience, libertarians tend to be drawn into their worldview by the economic critique of government, adding the philosophical critique only when they plunge in and read the works of the key libertarian ideologists, Ayn Rand and the lesser known but equally influential Murray N. Rothbard (or the works of their many epigones). Rand and Rothbard were themselves deeply influenced by Austrian economics, and MacLean acknowledges that Buchanan was converted to libertarianism in 1946, while he was a student of Frank Knight in the graduate program in economics at the University of Chicago. (However, she maintains, again on the basis of no evidence, that it is “unclear” whether his conversion was the result of “the cogency of Knight’s teaching or the upheaval on Chicago’s South Side as steel and meatpacking workers downed tools in the most massive strike wave in America’s labor history” [p. 36]. Here she footnotes three different pages of Buchanan’s autobiography, where he repeatedly proclaims Knight’s influence on him but says nothing at all about the strike.)

MacLean’s lack of charity proves especially unfortunate in this connection, for libertarians’ economic preoccupations lead directly to the need, in their ideological system, for public-choice theory. The key doctrine conveyed by free-market economics, in both its Austrian and Chicago variants, is that unintended consequences may frustrate attempts to solve social and economic problems—and that these attempts frequently cause more harm than good. That is, the government’s problem-solving attempts backfire so badly that they hurt the very people they attempt to help. Classic examples are the housing shortages that economists often attribute to rent control, and the unemployment they often attribute to minimum-wage laws.

However, while libertarians have been profoundly affected by the Austrian and Chicago idea that unintended consequences are ubiquitous, neither Austrian nor Chicago economists ever proposed a theory to explain why this should be the case; or why unintended consequences, when they do occur, are more likely to be harmful than beneficial. Such a theory would be about politics as much as economics: it would explain why political decision makers are likelier to do harm than good. Instead of such a theory, libertarians adopted a different theory of politics: Buchanan’s theory of public choice.

Public Choice: Uncharitability as a Political Theory

I well remember the buzz in elite libertarian circles when, in 1983, public choice began to be “discovered” by them. (MacLean does not recognize that public choice was a relatively late addition to the libertarian creed.) Public choice, libertarians exclaimed at the time, was the theory of politics that libertarianism had always lacked. But instead of explaining why the unintended consequences of public policies are (supposedly) rife, and (supposedly) negative, public-choice theory goes in the opposite direction. Buchanan asserted that people are just as self-interested in politics as in other areas of life.[6] So, depending on how much we think people are self-interested in the economic sphere, we should expect an equal amount of selfishness in politics—not benevolence. If political actors are in it for themselves, then it is logical to expect them to do more harm than good—not unintentionally, but deliberately.[7]

MacLean is rightly outraged at this. Buchanan and his followers, as she puts it, projected “unseemly motives onto strangers about whom they knew nothing” (p. 98). In particular, she is offended that public choice “deglorif[ies] the social movements” that have transformed America since the nineteenth century, and “recast[s] the motivations of the government officials who rewrote the laws” (p. 76). Buchanan’s “reductionist analysis turned young Americans with a passion to live up to their nation’s stated ideals into menaces who misrepresented their purposes for personal gain” (p. 107). This reductionism, however, brings Buchanan much closer to MacLean than she recognizes. Public-choice theory rules out interpretive charity in advance. All that is left is the imputation of bad motives to one’s political opponents. Public choice is MacLean’s own method, systematized.

By the same token, however, it is rich to read public-choice libertarians begging MacLean for interpretive charity. Their entire careers have been dedicated to denying interpretive charity to the political actors with whom they disagree. Indeed, one defender of public choice—confessing that he has not read MacLean’s book—notes that MacLean benefited from public funding in writing it. Gotcha, Professor MacLean!

MacLean and public-choice theorists, of course, are not unique in ascribing the worst to their political opponents. Everybody does it. This is an immense problem in modern politics, one we see playing out right now. If one’s political opponents are not just mistaken but evil, one may well feel that anything is justified in combating them. MacLean’s practice, and Buchanan’s theory, can lead to a war of all against all.

The Politics of Good and Evil, and an Alternative

Manicheaism is not only politically dangerous but a barrier to sound scholarship. “Evil” is an accusation, not an explanation. Actions may be objectively evil, but subjectively, everyone is doing what they think is somehow justified. Attributions of (subjectively) evil motives end the process of scholarship before it can begin. In studying politics, we want to know (among other things) why evil results may flow even from good motives—as an unintended consequence.

The Niskanen Center’s Institute for the Study of Politics will ask that question insistently. (Watch this space on Wednesday mornings.) Even in considering the objective evils of our time, such as rampant nationalism, we shall try to understand their proponents as they understand themselves. This means starting with their own explanations of their actions and questioning their motives only if this is warranted by charitably interpreted evidence. 

Interpretive charity is not merely good ethics, or a salve for raw political divisions. It is essential to the scholarly task: the task of understanding each other—a task to which all of us, not just academics but political actors, must attend.

[1] E.g., Jeffrey Friedman, “What’s Wrong with Libertarianism,” Critical Review 11(3): 407-67 (on public choice, see p. 442).

[2] E.g., David Boaz, Libertarianism: A Primer (1997), pp. 87, 110, 149, 171, 225, 276, 300.

[3] E.g., G. A. Cohen, “Capitalism, Freedom, and the Proletariat”; Justin Weinberg, “Freedom, Self-Ownership, and Libertarian Philosophical Diaspora,” Critical Review 11(3) (1997): 323-44.

[4] E.g., Tom G. Palmer, “G. A. Cohen on Self-Ownership, Property, and Equality,” Critical Review 12(3) (1998); and “What’s Not Wrong with Libertarianism: Reply to Friedman,” ibid.

[5] Hazlitt’s Economics in One Lesson is not merely a primer for libertarians who want to brush up on economics for purposes of policy debate. It has been the embarkation point for many a journey into libertarian ideology.

[6] James M. Buchanan and Gordon Tullock, The Calculus of Consent, pp. 19-20.  As Sanford Ikeda later wrote, in contrast to the unintended-consequences view, which posits a “divergence between intended and actual outcomes,” public choice posits a “divergence between announced and actual intentions.”

[7] Buchanan and Tullock supposed a priori that people are “symmetrically” self-interested, in both their economic and political activities—an assumption that makes little sense inasmuch as the norms of economic activity encourage self-interest while the norms of politics do not. Thus, the symmetry assumption did not hold up to empirical testing. For a summary of empirical evidence against it, see Leif Lewin, Self-Interest and Public Interest in Western Democracies (1991). In a twentieth-anniversary symposium on this book, two of the leading proponents of public-choice theory, Dennis Mueller and Michael Munger, essentially conceded that they were unaware of this evidence and had no answer to it. See Dennis C. Mueller, “The Importance of Self-Interest and Public Interest in Politics,” Critical Review 23(3) (2011); and Michael C. Munger, “Self-Interest and Public Interest: The Motivations of Political Actors,” ibid. This is not to say, however, that laws are everywhere and always designed to serve the public interest. See, e.g., Terry Moe’s “Vested Interests and Political Institutions”; or The Captured Economy, by the Niskanen Center’s Brink Lindsey and Steven Teles. On the tendency of public-choice theory to be removed from reality, consider the words of the Niskanen Center’s namesake: “Much of the [public choice] literature is a collection of intellectual games. Our specialty has developed clear models of first and second derivatives but cannot answer such simple questions as ‘Why do people vote?’” (William A. Niskanen, “The Reflections of a Grump,” p. 151).

Jeffrey Friedman, the Director of the Niskanen Center’s Institute for the Study of Politics and the editor of Critical Reviewis a Visiting Scholar in the Charles and Louise Travers Department of Political Science, University of California, Berkeley, and the editor of The Rational Choice Controversy: Economic Models of Politics Reconsidered (Yale University Press).