The Review of Austrian Economics

, Volume 32, Issue 1, pp 1–20 | Cite as

James M. Buchanan’s 1981 visit to Chile: Knightian democrat or defender of the ‘Devil’s fix’?

  • Andrew FarrantEmail author
  • Vlad Tarko


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).


Buchanan Chile Democracy Dictatorship Development 

JEL classification

B20 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We thank Jo Ann Burgess for permission to quote from James M. Buchanan’s published and unpublished writings.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.


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of EconomicsDickinson CollegeCarlisleUSA

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