with Andrew Farrant
Under contract with Cambridge University Press as two volumes in the Cambridge Elements series.
Draft table of contents
Volume 1: Hayek, Friedman, and Samuelson on the Political Economy of Slippery Slopes
PART 1: Friedrich Hayek
1. The theory of liberal democracy
2. Slippery slopes to socialism and the threat of unlimited democracy
3. Transitional dictatorship and liberal dictators
PART 2: Milton Friedman
4. Misadventures in Chile
5. The relationship between democracy, markets, and civil society
PART 3: Paul Samuelson
6. The theory of capitalist fascism
Volume 2: Buchanan, Ostrom, and the Primacy of Democratic Consent
PART 4: James Buchanan
7. The myth of unlimited democracy
8. Politics by principle: Generality and the escape from domination and discrimination
9. The possibility of principles in politics
PART 5: Vincent Ostrom
10. The Faustian bargain
11. The vulnerabilities of democracy and naivety of the belief in a liberal dictator
Although 19th century classical liberalism combined a defense of both democracy and markets, over the span of the 20th century, the tension between the two has gathered increasingly more attention. Both supporters of markets and of democracy have increasingly come to believe that the two are only partially compatible, and that one must choose.
Such a choice became particularly problematic in cases like Augusto Pinochet’s Chile, and the reputation of prominent “neoliberals” like Friedrich Hayek, Milton Friedman and James Buchanan has been tainted by their perceived support for “liberal dictators” in general and Pinochet in particular. Some authors, like John Meadowcroft, have argued that Hayek’s support of Pinochet followed logically from his abstract theory of liberalism, while others, like Peter Boettke and Bruce Caldwell, see a contradiction between the two. In the case of James Buchanan, the perception of his supposed support for liberal dictators is at odds with his actual actions and writings, and it is almost entirely the result of either the willful misinterpretation of his views, or a misunderstanding of what Buchanan is arguing when he is critical of majoritarian democracy. The case of Milton Friedman is somewhat in the middle. While he did not support Pinochet, some might still find fault with some of his actions, and, interestingly, Friedman himself changed his views about the proper relations between politics, economics, and society over time.
This book will lay out the evidence about Hayek, Friedman and Buchanan, and add to the mix two other important thinkers: Paul Samuelson and Vincent Ostrom. Samuelson is interesting because he is the originator of the theory of “capitalist fascism”, which, in many ways, is a mirror image of Hayek’s argument from Road to Serfdom. Samuelson builds his theory explicitly against the background of Hayek’s 1944 analysis of the possible ‘path’ to serfdom, and his seeming misreading of Hayek’s ‘warning’ about the situational logic of attempts to engage in large-scale efforts to control or ‘plan’ the future development of the economic system. Moreover, Samuelson criticizes Buchanan for his advocacy of balanced budgets, thus placing Buchanan in the same category of “capitalist fascism” as Hayek. This did not sit well with Buchanan. In parallel to Samuelson’s attack, Buchanan is dismayed to witness the support for “liberal dictators” and overtly anti-democratic sentiment that was increasingly prevalent in the Mont Pelerin Society and related circles in the late 1970s and early 1980s.
This prompted Buchanan to further sketch out his vision of democratic self-governance in a way that both responded to Samuelson charge of incipient fascism and provided a renewed justification for democracy per se. Vincent Ostrom, a long-time friend of Buchanan’s, provides the flip-side of Buchanan’s argument, by laying out a detailed analysis of the vulnerabilities of democracies and provides the most sophisticated approach to the questions raised by both Hayek and Samuelson with respect to possible democratic slippery slopes that culminate in authoritarianism. In particular, Ostrom’s analysis of democratic polities as a type “Faustian bargain” in which citizens gain the advantages of large-scale collective action at the risk of empowering what might become a government that is averse to the interests of the citizenry at large provides much illumination as to what the debate over the ’liberal dictator’ is ultimately all about.
Our contribution in this book is to, first, provide an accurate overview of some of the key constitutional political economy theories about the vulnerabilities of democracy, and about the relationships between economics, politics and society. Second, we detail the connections between these different accounts, both in terms of the intellectual content and in terms of the personal relations.