What Should (Knightian) Economists Do? James M. Buchanan's 1980 Visit to Chile

Although Milton Friedman and Arnold Harberger became involved with Pinochet's Chile in the mid-1970s, an increasingly influential body of scholarship argues that James M. Buchanan was similarly eager to provide Pinochet's dictatorship with advice. Buchanan reportedly had a heavy influence on the development of Chile's 1980 Constitution and similarly helped to design Chile's binomial electoral system. Buchanan's seeming willingness to advise Pinochet's dictatorship provides a stark contrast to his longstanding advocacy of Frank Knight's view that democracy is "government by discussion" and Buchanan's oft-repeated insistence that democratic consensus trumps economic expertise. This article draws upon a wealth of largely ignored archival evidence and Chilean primary source material to engage and evaluate whether Buchanan-a Knightian economist par excellence-abandoned his advocacy of "government by discussion" and provided early 1980s advice that helped Pinochet's regime of "institutionalized terror" (Valdes , p. 30) design a constitution that would chain any subsequent Chilean democracy.