Charles Koch Makes a Good Point by Thomas J. DiLorenzo

The word on the street (K Street, that is) is that Charles Koch's lawsuit against the CATO Institute is motivated by his desire to abandon what he once believed was a potentially successful Grand Strategy and replace it with a different institutional strategy. The Grand Strategy was explained to me back in the early 1980s by Richard Fink, the longtime head of the Koch Foundation, when we were both young assistant professors of economics at George Mason University (and before Richie was with the Koch Foundation). The strategy was to use institutions such as George Mason to educate undergraduate and graduate students in free-market economics who would then work for various arms of the Kochtopus, for members of congress or the executive branch, or become journalists or elected officials themselves. In other words, the strategy was all about influencing or taking over the Washington Establishment. 

 
Well, this strategy has had a 35-year run and is obviously a colossal failure. There has never been any single law or regulation that is known as the "CATO Rule," or the "CATO law to deregulate industry X," etc. The welfare/warfare state has exploded beyond the control of anyone over the past several administrations despite all those CATO conferences, all those rubber chicken lunches and dinners, and all of the juvenile sniping at and gossiping/lying about the Rothbardians associated with the Mises Institute and LewRockwell.com who have done nothing but pursue an alternative educational strategy.
That strategy was always to educate the general public, especially the young, in Austrian economics and Austrian social theory. This was Murray Rothbard's preferred strategy, and it is a big reason why Charles Koch and Ed Crane kicked him out of the CATO Institute despite the fact that he was one of the original founders, came up with the name, and was an original "shareholder." In other words, Murray's strategy was to devote educational efforts to educating people like the millions of young (and not-so-young) Ron Paul supporters that we now read about on a daily basis (and whose existence reportedly infuriates Charles Koch). It was never to pretend that it was possible to take over the Washington establishment. Murray was never so naive as to believe in such a fool's errand. He believed instead that the opposite was much more likely to occur: that the Washington establishment would force CATO to compromise its principles as the price of being treated "respectfully" by the likes of the company newspaper, the Washington Post. He understood that the Washington establishment would only use an institution like CATO to fool the public into believing that there is actually a public policy debate in Washington, and that it is not just a matter of choosing minor, miniscule variations of the combination of welfare/warfare statism when choosing between the two political parties.
CATO began compromising its principles the moment it moved from San Francisco to Washington, D.C. At the time, I was an adjunct scholar of CATO. Within about a year or so I began sending op-ed articles to Jeff Tucker at the Mises Institute, and giving presentations at Mises Institute conferences organized by Murray Rothbard and Lew Rockwell, because everything I sent to CATO was all-of-a-sudden watered down so much that it sounded more like something coming out of the liberal Brookings Institution. CATO's publications editor at the time seemed embarrassed that the op-eds I was sending him, at his request, were constantly being returned to me with such heavy editing by an anonymous person (to me) who seemed to be on the same ideological wave length as a leftist like Ted Kennedy or a neocon like Newt Gingrich. I was apparently too much of a Misesian and not enough of an intellectual prostitute for CATO, so they dropped me as an adjunct scholar the same week that they dropped Professor Ralph Raico for the same reason.
Murray Rothbard was right, and Charles Koch's lawsuit against the CATO Institute inadvertently admits it.

March 6, 2012

Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You’re Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton’s Curse: How Jefferson’s Archenemy Betrayed the American Revolution – And What It Means for America Today.