James M. Buchanan’s 1981 visit to Chile: Knightian democrat or defender of the ‘Devil’s fix’?
Nobel Prize winning economist James M. Buchanan has repeatedly argued that the “political economist should not act as if he or she were providing advice to a benevolent despot” (Boettke Constitutional Political Economy, 25, 110–124, 2014: 112), but an increasingly influential body of scholarship argues that Buchanan provided a wealth of early 1980s policy advice to Augusto Pinochet’s military dictatorship in Chile (e.g., Fischer 2009; Maclean 2017). In particular, Buchanan reportedly provided an analytical defense of military rule to a predominantly Chilean audience when he visited the country in late 1981. This paper draws upon largely ignored archival evidence from the Buchanan House Archives and Chilean primary source material to assess whether Buchanan provided a defense of Pinochet’s “capitalist fascism” (Samuelson 1983) or whether he defended democracy when he visited Chile in 1981. Aside from the importance of this for assessing Buchanan’s own legacy, his constitutional political economy arguments presented in Chile also provide an interesting and distinct perspective on the connection between democracy and growth, which remains highly relevant to current debates. Despite a general agreement about the desirability of democracy, the view that authoritarian regimes can spur “growth miracles”, or might even be a necessary stage in political-economic development, still has prominent supporters (e.g. Sachs 2012).
KeywordsBuchanan Chile Democracy Dictatorship Development
JEL classificationB20 B30 B31
We thank Jo Ann Burgess for permission to quote from James M. Buchanan’s published and unpublished writings. Sarah Armstrong provided invaluable assistance in translating all foreign language sources. We also thank Geoffrey Brennan for helpful email correspondence about Buchanan’s views and his visit to Chile. We similarly thank Peter Boettke, Don Boudreaux, Bruce Caldwell, Tyler Cowen, Ali Khan, David M. Levy, John Meadowcroft, Scott Scheall, and Karen Vaughn for helpful comments and discussion. We also particularly thank an anonymous referee for valuable comments and suggestions.
- Acemoglu, D., & Robinson, J. A. (2012). Response to Jeffrey Sachs. Why Nations Fail Website. http://whynationsfail.com/blog/2012/11/21/response-to-jeffrey-sachs.html. Accessed 15 Nov 2017.
- Acemoglu, D., Naidu, S., Restrepo, P., & Robinson, J. A. (2014). Democracy does cause growth. NBER Working Paper No. 20004.Google Scholar
- Barros, R. (2005). Constitutionalism and dictatorship: Pinochet, the junta, and the 1980 constitution. Cambridge: Cambridge University Press.Google Scholar
- Brennan, G., & Buchanan, J. M. (2000). The reason of rules: Constitutional political economy. Indianapolis: Liberty Fund.Google Scholar
- Buchanan, J. M. (1960). Economic policy, free institutions and democratic process. Il Politico, 265–193.Google Scholar
- Buchanan, J. M. (1975). The limits of liberty: Between anarchy and leviathan. Chicago: University of Chicago Press.Google Scholar
- Buchanan, J. M. (1977). Freedom in constitutional contract: Perspectives of a political economist. College Station: Texas A & M University Press.Google Scholar
- Buchanan, J. M. (1981). Democracy: limited or unlimited. Buchanan House ArchivesGoogle Scholar
- Buchanan, J. M. (1984) Can democracy be tamed? Buchanan House ArchivesGoogle Scholar
- Buchanan, J. M. (1986). Liberty, market and state: Political economy in the 1980s (p. 1986). New York: Wheatsheaf books.Google Scholar
- Buchanan, J. M. (1987). Justification of the compound republic: The calculus in retrospect. Cato Journal, 7, 305–312.Google Scholar
- Buchanan, J. M. (1989). Reductionist reflections on the monetary constitution. Cato Journal, 9, 295–299.Google Scholar
- Cáceres, C. (1982). La vía chilena a la economía de mercado. Estudios Públicos, 6, 71–87.Google Scholar
- Chamberlain, J. (1982). The Chilean example. National Review, 34(6), 356–359.Google Scholar
- Easterly, W. (2011). Benevolent autocrats. Development Research Institute Working Paper. New York University. Google Scholar
- Easterly, W. (2014). The tyranny of experts: Economists, dictators, and the forgotten rights of the poor. New York: Basic Books.Google Scholar
- Fischer, K. (2009). In P. Mirowski & D. Plehew (Eds.), The influence of neoliberals in Chile before, during, and after Pinochet (pp. 305–346). Cambridge: Harvard University Press.Google Scholar
- Hayek, F.A. (1978b) The dangers to personal liberty, Letter to The Times, July 11: 15.Google Scholar
- Hayek, F.A. (1978c) Freedom of choice, Letter to The Times, August 3: 15.Google Scholar
- Huneeus, C. (2007). The Pinochet regime. Boulder: Lynne Rienner Publishers.Google Scholar
- Lehmann, D. (1990). Democracy and development in Latin America: Economics, politics and religion in the post-war period. Philadelphia: Temple University Press.Google Scholar
- Levy, D. M., & Peart, S. J. (2016). Escape from democracy: The role of experts and the public in economic policy. Cambridge: Cambridge University Press.Google Scholar
- MacLean, N. (2017). Democracy in chains: The deep history of the radical right's secret plan for America. Viking Press.Google Scholar
- Meadowcroft, J. (2011). James M. Buchanan. USA: Bloomsbury Publishing.Google Scholar
- Plehwe, D. (2009). Introduction. In P. Mirowski & D. Plehew (Eds.), The road from Mont Pèlerin (pp. 1–42). Cambridge: Harvard University Press.Google Scholar
- Sachs, J. D. (2012a). Government, geography, and growth: The true drivers of economic development. Foreign Affairs, 91, 142–150.Google Scholar
- Sachs, J. (2012b). Reply to Acemoglu and Robinson’s Response to My Book Review.” Jeff Sachs Website. http://jeffsachs.org/2012/12/reply-to-acemoglu-and-robinsons-response-to-my-book-review/. Accessed 15 Nov 2017.
- Samuelson, P. A. (1980). Economics. New York: McGraw-Hill.Google Scholar
- Sigmund, P. (1982). Chile: Successful intervention? In R. Wesson (Ed.), U. S. influence in Latin America in the 1980s (pp. 20–39). New York: Praeger.Google Scholar
- Stigler, G. J. (1979). Why have the socialists been winning? ORDO – Jahrbuch Für Die Ordnung Von Wirtschaft Und Gesellschaft, 30, 61–68.Google Scholar
- Valdés, J. G. (1995). Pinochet's economists: The Chicago School of Economics in Chile. Cambridge: Cambridge University Press.Google Scholar
- Wilson, E. (1992). A very British miracle: The failure of Thatcherism. London: Pluto Press.Google Scholar