Charlottesville, Virginia, USA has witnessed scenes of violence and death this weekend as what can only be described as fascist groups assembled for rallies that were clearly intended to incite a response, and did.
I condemn all political violence. I offer condolence to the relatives of the person who died. At the same time I applaud those who protested, and came to do so peaceably. They came because Charlottesville has a dark history, as has the state of Virginia as a whole.
It was a Confederate State.
For the first half of the twentieth century Virginia's constitution made it virtually impossible for black people to vote in the state. It also segregated schools.
In 1926 Virginia was the only state in the US to bar public integration of races. It did so under the influence of the white supremacist Anglo-Saxon Club.
When states were ordered to integrate education in the 1950s Virginia resisted, strongly. Schools were privatised rather than integrated, the claim being that the requirement did not extend to private institutions. In Prince Edward County black children were denied an education from 1959 to 1964 as a result, there being no schools made available for their use.
And it was here, at that time, that the far right economics of neoliberalism was deliberately created. As recounted by Nancy MacLean in her new book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America, and as usefully summarised by George Monbiot here, James Buchanan, who created the Virginia School of Political Economy at this time was not just in the process undertaking pure academic study. He was instead, along with fellow Mont Pelerin Society members, seeking to oppose the expansion of government facilitated by what he saw as the tyranny of the majority that meant those with a vote could limit the freedom of those with wealth.
Buchanan, in MacLean's interpretation, explicitly supported the so-called agenda of choice that let Price Edward County close its schools. He saw privatisation as a way of giving power to those with money, which he clearly saw as the means that empowered the decision maker.
The ideas created by Buchanan in Virginia at that time do however resonate now. Eamonn Butler of the Adam Smith Institute wrote in 2012 here in the UK:
As James Buchanan and Gordon Tullock showed in The Calculus of Consent, to impose your will on the public, all you need to do is to win 51% of the votes in 51% of the constituencies. So that's about a quarter of the population. Actually it is less, because only about half the population will probably vote anyway. So if there is just one chamber of Parliament, it is possible for quite small majorities to dominate the agenda. That is why we have such absurdly high tax on businesses and on people who earn a lot by creating jobs and prosperity. There are simply fewer of them than the majority, who enjoy the benefits of the taxation.
As Buchanan and Tullock suggested, and as I recounted in my recent book Public Choice – A Primer, we need strong constitutional arrangements to prevent this kind of exploitation. The US constitution managed to contain it for quite a time, but now it is hardly up to the job. As government has grown, the benefits of controlling the government – the amount you can loot from exploiting the minority – has grown too. So controlling governments has become big business. Ask any lobbyist. We need, in fact, surprisingly strong constitutional arrangements if we are to prevent the tyranny of the majority. (My emphasis added)
Am I in favour of democracy? Of course I am, but like the market economy, democracy only works if it is constrained by a set of rules. You need a fire basket to contain the fire. Without the rules of honesty, contract and private property, the market will soon descent into crony capitalism, with governments dishing out favours to their friends. Without constitutional rules to prevent minorities being exploited by majorities, democracy will turn into mere majoritarian populism, or into rotating elected dictatorships. Some people say this has already happened.
The argument is that democracy oppresses those with wealth, who are a minority. As the Mont Pelerin Society, founded by Hayek in 1947 and which has counted Buchanan and Milton Friedman amongst its Nobel Laureates, says of itself:
The Mont Pelerin Society is composed of persons who continue to see the dangers to civilized society outlined in the statement of aims. They have seen economic and political liberalism in the ascendant for a time since World War II in some countries but also its apparent decline in more recent times.
Though not necessarily sharing a common interpretation, either of causes or consequences, they see danger in the expansion of government, not least in state welfare, in the power of trade unions and business monopoly, and in the continuing threat and reality of inflation.
Again without detailed agreements, the members see the Society as an effort to interpret in modern terms the fundamental principles of economic society as expressed by those classical economists, political scientists, and philosophers who have inspired many in Europe, America and throughout the Western World.
That Society in turn spawned most of the leading right wing think tanks including the Institute for Economic Affairs and Adam Smith Institute in the UK. What they share in common are three things. They are a belief that power should be afforded to wealth; a distaste for anything that restrains that power of wealth (and so of government, welfare, unions and the monopoly of public companies, they having a preference for private ownership) and a belief that pure markets can answer all questions. That includes the supply of education, and so what if it is only available to some, as in Prince Edward County for five years? The consequence of that same logic is now to be seen in UK privatisation, health care reform, outsourcing, and so much else.
But so too is it seen in the desire to limit the number of MPs in the UK and to gerrymander their seats.
What's the link with Charlottesville? Well, that's where much of this economic logic began, and not least as part of the resistance to the process of granting equal rights. And as the right wing have got more powerful, and their think tanks more aggressive it is appropriate to make clear that their aim is to defend fundamental divides in society.
At their core, as Monbiot says, these organisations are fundamentally opposed to democracy based on the right of people to choose. That's how I interpret Eamonn Butler's comment - his piece being entitled 'Democracy must restrain the mob against the minority'. The trouble is the mob that these groups want to restrain want equality, and that's precisely what these think tanks do not want them to get.
Of course Charlottesville was extreme and fascist and I am not saying these think tanks are either. But I am saying that in their more moderate, but still politically extreme way, that they do pose a threat to democracy. And none of us should feel comfortable about that.