Archive | Libertarianism

Charles Koch’s Recent Statement on the Cato v. Koch Conflict

Co-blogger Jonathan Adler has posted Charles Koch’s recent statement on the Cato vs. Koch confrontation. I think there are some positive elements in the statement, especially this part:

Some have speculated that we would micro-manage the enterprise. Others have suggested we would turn Cato into a partisan Republican organization. These rumors are absolutely false.

My objective is for Cato to continually increase its effectiveness in advancing a truly free society over the long term. This was my objective when, in 1976, I came up with the idea of converting the Charles Koch Foundation to a public policy institute and recruited Ed Crane to run it. My observation was that there was an urgent need for an institute that would flesh out the policy implications of the general principles of a free society. I still believe there is a great need for this work and that Cato can fill that need.

To that end, we would seek to elect board members and officers who will ensure that Cato becomes increasingly effective in advancing liberty while remaining dedicated to its core principles. These officers and board members would act independently from me or any other individual – instead, their role, as should be with any non-profit board, would be to ensure greater accountability and effectiveness. As someone who has created and helped build many organizations in both the profit and non-profit sectors, I know from first-hand experience that sustainable growth can be achieved only through leaders who are committed to core principles. Recognizing all that Cato has accomplished in the past, I envision a Cato that can accomplish even more in the future.

In my last post on this subject, I urged the Kochs to announce that, if they win their lawsuit and get control of Cato, they will “appoint board members [...]

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Koch v. Cato — A Statement from Charles Koch [Updated with link to Levy Response]

Charles G. Koch has issued the following statement about the Koch brothers lawsuit to obtain control of the Cato Institute.  Here it is in its entirety:

Statement by Charles G. Koch
Chairman and CEO, Koch Industries, Inc.
Regarding the Cato Institute
March 8, 2012

In December 1976, when I co-founded and provided the seed money to establish the Cato Institute, which originally was the Charles Koch Foundation, my vision was to build a principled and non-partisan organization that would advance the ideas that enable all people to prosper – by promoting individual liberty, limited government, free markets and peace. This was my intent then, and remains my steadfast intent 35 years later.

With its emphasis on education, Cato has contributed greatly to the marketplace of ideas and is now a respected thought leader. My brother David and I have every intent to ensure Cato continues its work on the full spectrum of libertarian issues for which it has become known.

I am troubled by recent false allegations that our actions to preserve shareholder rights were done in disregard of Cato’s interests. Here are the facts behind what we have done and why.

We did not want to address this shareholder issue at this time. Although our legal filing has accelerated media coverage of this issue, this was not our desire. For months we made every effort to resolve, avoid, or delay this issue. We proposed a standstill agreement to delay for one year or longer any discussion on the shareholders agreement. We asked to delay any shareholders meeting, which would have left the pre-March 1 board of directors in place during this period. We proposed third-party mediation. We proposed alternative corporate structures. We made every effort to avoid this dispute –finally requesting just an additional four days to negotiate a

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Koch v. Cato — The Views of Former Cato Staffers and Ezra Klein

The commentary on the Koch-Cato continues to multiply.  Three recent posts are particularly noteworthy.  The first are two former Cato staffers associated with so-called “liberaltarianism,” Brink Lindsey and Will Wilkinson.  Brink’s views, in particular, are quite close to my own.  In addition, noted progressive blogger Ezra Klein adds his voice to those wondering what the Kochs hope to accomplish by taking over the Cato Institute.  All three posts are excerpted after the jump.

In addition to these three posts, here some additional items of potential interest to those following this libertarian family feud:

  • Jeffrey Toobin profiles Cato Chairman Bob Levy;
  • Slate‘s Explainer explains what goes on at think tanks;
  • Jessica Flanagan addresses charges of libertarian hypocrisy;
  • Cato’s Jonathan Blanks proclaims “Just because we support legalized prostitution doesn’t mean we want to live it.”

Also, FWIW, I think Ilya outlines the sort of initiative that could resolve this conflict.  The question is whether either side is willing to set egos and personal interests aside to embrace such an outcome.

ANOTHER: In a series of posts, Brad Delong demonstrates that he doesn’t understand the concept of rights, or the idea that I may defend your right to do something even as I criticize or lament your choice to do it.

MORE LINKS: Some additional commentary.

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A Few Notes on the Cato-Koch Controversy

I love the Cato Institute.  I admire the Kochs and greatly appreciate their contributions to libertarian causes.   I have ties to both sides too numerous to bore readers with.  So I’m distressed that they are at odds.  Here’s my small contribution to the debate:

(1) In one sense, the Kochs had no choice but to file their lawsuit, given that the two sides couldn’t come to terms on a modification of the shareholder agreement.  The point of that agreement, poorly drafted as it was, was obviously to ensure that Cato remained true to its libertarian mission by vesting personal control in particular stakeholders.  But let’s say that Bill Niskansen’s widow was  a closet socialist, and the Cato board had declined to buy back Niskansen’s shares thinking she was a Cato-style libertarian.  Think about John Kerry coming into Republican Senator Heinz’s fortune via Theresa, and you can see the potential problem.  Apparently, before the lawsuit, negotiations had broken down over whether and how to modify the shareholder agreement.  Without knowing each side’s position in those negotiations, I’m not in a position to judge who was acting unreasonably.

(2) The Kochs made  a huge error in nominating some directors without strong libertarian credentials (Hinderaker, Olson), and others with direct ties to the Kochs (including Olson, who does legal work for them).  This falls short of proof that the Kochs either want to “take over” Cato, or change its direction in any significant way, but it’s a p.r. disaster that clearly strengthens Crane’s hand in the court of public opinion.

(3) Cato claims that David Koch and a couple of directors expressed their dissatisfaction that Cato doesn’t act in a more partisan matter.  That’s not terribly surprising from David, given his funding of Americans for Prosperity.  But it’s brother Charles who strikes me [...]

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A Possible Alternative Solution to the Cato vs. Koch Conflict

Many supporters of the Cato Institute in its conflict with the Kochs claim that the latter are trying to transform Cato into a partisan outfit that is less libertarian than the current Cato, and acts to promote the interests of the Republican Party. They worry that the Kochs will stack the Cato board of directors with conservatives, Koch employees, and GOP operatives. The Kochs, for their part, vehemently deny any intent to change Cato’s mission, arguing that they filed suit against Cato only because the Institute’s current leadership violated the Kochs’ shareholder rights. Personally, I am skeptical of claims that the Kochs want to turn Cato into a shill for the GOP. However, I still think that the Koch lawsuit is ill-advised for both public relations and substantive reasons.

The easiest way to address the critics’ concerns would be for the Kochs to drop their lawsuit. But there is another option as well. The Kochs could announce that if they win the suit, they will appoint board members who are well-known independent libertarian academics, policy experts, and activists and are not Koch employees. These people would need to be clearly libertarian and widely respected in their fields. I have in mind big-name libertarian scholars and commentators such as Tyler Cowen, Richard Epstein, Virginia Postrel, and co-blogger Randy Barnett.

Their commitment to libertarianism and longstanding differences with conservatives would assuage any concern that Cato is about to turn conservative or become a cats-paw for the GOP. Their scholarly orientation would ensure that Cato remains an organization focused on ideas and in-depth policy analysis rather than day-to-day partisan politics. And their independence and strong intellectual and academic reputations would make it difficult for any fair-minded observer to conclude that they are merely tools of the Kochs.

If I understand the [...]

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Koch v. Cato — Woodlief Responds, Frank Comments

Here are two more worthwhile posts on the Koch-Cato kerfuffle: One by Tony Woodlief responding to Jerry Taylor, the other by Ted Frank.  Recognizing that not every reader of the VC is interested in this contretemps, I’ve placed excerpts from both posts below the jump.

[UPDATE: It appears Ted Frank’s comment has been taken down.  If I can locate a cached copy, I will repost it.  Skip Oliva comments here.] [...]

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Cato, the Kochs, and Supposed Libertarian Inconsistency

Some critics of Cato’s stance in the Cato v. Koch dispute claim that it is inconsistent for libertarians to criticize the Koch brothers’ exercise of their rights. After all, libertarians support property rights, so how they can criticize anyone’s use of their property? Such claims are misguided. They are the equivalent of arguing that if you are committed to freedom of speech, it is inconsistent for you to criticize anything anyone says.

In both cases, there is no inconsistency in saying that you have the right to do X, but you nonetheless should not exercise that right. For example, I believe that bloggers have the right to promote racist conspiracy theories. But I also believe that they should not actually do so. I oppose government efforts to censor racist conspiracy-mongering. But that does not mean I can’t criticize it when it occurs. Similarly, if the Kochs are legally entitled to take control of Cato (which is disputable), I would not want the government or anyone else to use force to take away their rights. As far as I know, none of the Kochs’ libertarian critics are advocating any such thing.

But there are many situations where it is unwise or even immoral for us to make use of our rights, whether they be property rights, free speech rights, or others. In this case, the Kochs’ exercise of their rights is ill-advised because it would damage Cato and the cause of libertarianism with little or no offsetting benefit. For that reason, I believe they should drop their lawsuit even if their position on the disputed legal issues is completely correct.

A more subtle version of the inconsistency argument holds that the real problem here is not property rights as such but libertarians’ supposedly unjustified defense of the right of [...]

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Koch v. Cato — The View From Koch

I have spoken with quite a few folks close to the Koch brothers and their organizations, but have not been able to get anyone to speak (let alone answer questions) on the record. I have, however, come across a letter sent to alumni of the Charles G. Koch fellowship program detailing the Kochs’ position. I believe the letter is sincere, but I think most of the arguments are beside the point. Yes, if the Kochs’ interpretation of the shareholders agreement is accurate, they are within their rights to enforce it and Cato’s other shareholder and the Institute are obligated to comply. But so what. The existence of the agreement says nothing about whether it should be enforced by the parties, and that’s the issue — a point the letter concedes when it notes that the Kochs are willing to consider alternative arrangements.

The concern I expressed in my initial post (and elaborated upon here) is that enforcing the agreement so as to establish Koch control of Cato comes at a cost. A Koch takeover of Cato, however well-intentioned, will necessarily diminish the Institute’s credibility and compromise Cato’s ability to advance individual liberty. This is true whether or not the Kochs are within their legal rights to take such actions and whether or not they have better ideas as to how Cato should be run than current Cato President Ed Crane. These have been the dominant concerns expressed about the Kochs’ actions, and yet to such concerns the letter offers no meaningful response. There is a brief mention of an offer to consider alternative corporate structures, but no indication of what alternatives were proposed or how such alternatives would preserve the Institute’s independence — real and perceived — and its reputational capital. A proposal that satisfied such concerns would be [...]

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Libertarianism and the Civil War

Over at Libertarianism.Org, Jonathan Blanks has an interesting series of posts criticizing libertarians who defend the secession of the Southern states that precipitated the civil war (see here and here). Like Blanks, I believe that any possible justification that the Confederates may have had was negated by the fact that they seceded for the purpose of perpetuating slavery – a far greater violation of libertarian rights than anything white southerners could complain of in 1861.

There are, generally speaking, three types of libertarian perspectives on the Civil War. Many libertarians actually support the war, some condemn it without defending the Confederacy, and some are actually pro-Confederate.

I. Libertarian Unionism.

Many libertarians actually agree with the conventional wisdom on the conflict: that, although it caused great harm, it was ultimately beneficial because it led to the abolition of slavery. Although I haven’t seen any survey data, informal discussions with libertarian intellectuals and activists lead me to believe that this view actually very common in the movement, perhaps more so than either of the others. However, few libertarian Unionists have actually written about the conflict, perhaps because libertarian scholars tend to focus on issues where we diverge from the conventional wisdom of non-libertarians rather than endorse it (Tim Sandefur’s article on the subject is an interesting exception). Pro-Union libertarians do, however, differ from many other defenders of the Union cause in so far as most believe that the preservation of the Union was not by itself a sufficient justification for the war, independent of slavery.

II. Condemning the War Without Endorsing the Confederacy.

A second libertarian approach to the Civil War recognizes that the Confederates seceded for the purpose of protecting slavery, and does not defend their actions. But it still holds that the war actually did more harm than [...]

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Koch v. Cato – Monday Morning Roundup

The Koch brothers lawsuit to take control of the Cato Institute has continued to receive commentary, and has even inspired a Facebook page.  Over the weekend, I posted a statement from Jerry Taylor of the Cato Institute.  I will present the the Kochs’ perspective if and when I get a statement or am able to speak with a Koch representative on the record.  In the meantime, here’s some of what’s out there.

The Washington Post reported on the Cato Institute’s “unusual structure,” as it is not common for non-profits to have shareholders, something Matt Yglesias also discussed here.  Relatedly, Frank Pasquale points to this paper on takeovers of non-profit organizations.

GMU’s Don Boudreaux discusses the relationship between ideas and advocacy, noting he believes the Kochs are “most imprudently and unwisely  threatening the long-term health of the liberty movement.”  Economist Arnold Kling believes less is at stake.  Cato’s Jason Kuznicki is quite upset with the Kochs’ actions. Jordan Bloom’s not happy, but notes the irony of these events so close to Murray Rothbard’s birthday.

Gene Healy, who was publicly toasting Charles Koch last fall, has written an open letter to Koch program alumni. Jacob Grier also has a comment worth quoting:

In the past I’ve defended the Koch brothers from charges that their political activities are motivated by narrow self-interest. Funding scholarships for libertarian college students or sending them to week-long academic seminars are hardly profit-maximizing uses of their money. Though they are famously secretive, the only sensible interpretation of their actions over the past few decades is that they sincerely believe in broadly libertarian ideas and want to see them succeed in the long-run. Their investment in think tanks, journalism, and other non-profits are groping attempts to discover how best to bring that about.

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Koch v. Cato — A View from Cato

My friend Jerry Taylor, a senior fellow at the Cato Institute, offered me his perspective on the Koch-Cato dispute.  Jerry’s obviously sympathetic to Cato President Ed Crane, but he also offers a fair amount of detail about recent events, including recent changes to the Cato Institute’s Board of Directors — changes that occurred last Thursday and I have yet to see reported in the press.

I understand that the Kochs have a different perspective on some of the relevant events but have not (as yet) gotten anything on-the-record beyond that which has appeared in various news accounts.  If I do, I will post that as well.

My prior posts on the Koch-v-Cato kerfuffle are here and here.  Ilya added his thoughts here. [...]

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Koch v. Cato Follow Up

Since yesterday’s post, I’ve been hearing from folks on various sides of the conflict and hope to be able to report some additional details shortly, including news on recent changes to Cato’s Board of Directors — changes that relate to the current conflict.  In the meantime, Laurie Bennett has more coverage at Forbes (including a graphic showing Cato’s Board of Directors up until this past week) and Skip Oliva has a series of posts, including several that dig into the details of the legal dispute over the late Bill Niskanen’s shares.  Here’s another analysis of the legal issues and a comment by Steve Chapman of the Chicago Tribune.

In response to comments, I also wanted to elaborate briefly on a few points from yesterday’s post.  Given some readers may not care about this intra-libertarian movement stuff, I’ve placed the discussion below the fold. [...]

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The Cato Institute and the Kochs

For what it is worth, I completely agree with co-blogger Jonathan Adler’s comments on the Koch brothers’ lawsuit against the Cato Institute. I don’t know whether the Kochs’ legal rights have been violated or not. If they have, I can understand their frustration. But, for the reasons Jonathan explains, this lawsuit – even if meritorious – can only do damage to the Cato Institute and the broader libertarian cause which the Kochs have supported for many years.

Cato is the nation’s most prominent libertarian think tank. For both public relations and substantive reasons, it is unwise for it to be controlled by members of one family, whether the Kochs or any other. The public relations problem is obvious. The substantive problem is that such a setup increases the chance that the organization will develop blindspots that might have been avoided with more diverse leadership.

As I explained here, much of the litany of charges against the Kochs is unfounded, based on a combination of distortions and outright factual errors. In this case, however, they have made a mistake. Most likely, the Kochs genuinely believe they have been wronged and that they could run the Institute better than its current leaders. But not every well-intentioned action is wise, and this one isn’t.

CONFLICT OF INTEREST WATCH: I am a Cato adjunct scholar, which is an unpaid position. Back in the summer of 1992, I was a college student intern at Cato, a job that paid a small salary. I have published several articles and op eds in Cato publications or with Cato’s assistance, sometimes for free, and sometimes for small honoraria. Cato was also my client on a pro bono amicus brief I wrote on their behalf (along with several other organizations). Cato has expressed interest in co-publishing a book [...]

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Koch v. Cato

Yesterday the Washington Post‘s “ThinkTanked” blog reported that Charles and David Koch have filed a lawsuit to take control of the Cato Institute, the nation’s most prominent libertarian think tank.  Although it is a non-profit, as initially incorporated, Cato is effectively owned  by a board of shareholders.  Until recently, this board consisted of Cato President and founder Ed Crane, Charles Koch, David Koch, and the late William Niskanen, each holding equal shares in the corporation.  According to the Kochs’ complaint, when Niskanen died his shares should have been returned to the corporation, giving the Kochs majority control on the board of shareholders.   Instead, the shares were transferred to Niskanen’s widow, Kathryn Washburn.

The lawsuit has already generated substantial commentary.  Here is a fuller Washington Post story, background from David Weigel (drawing on Brian Doherty’s history of the libertarian movement, and commentary by Jane Mayer of the New Yorker (who has a thing about the Kochs).   The Kochs maintain their suit is simply about enforcing the shareholder agreement.  The Post quotes Charles Koch saying ““We support Cato and its work.  We want to ensure that Cato stays true to its fundamental principles of individual liberty, free markets, and peace into the future, and that it not be subject to the personal preferences of individual officers or directors.”  Cato’s Crane and Cato Chairman Bob Levy charge the suit is about transforming Cato into a less independent and more political (if not also more partisan) institution.  Others speculate the suit could have its roots in a longstanding feud between Crane and one or both of the Koch brothers.

Whatever the merits of the Kochs’ claim, I cannot understand how their actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums [...]

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What Milton Friedman Means to Me

Co-blogger Eugene Volokh links to the Free to Choose Foundation’s “What Milton Friedman Means to Me” video competition. The contest marks the occasion of the 100th anniversary of Friedman’s birth. I’m not very good at making videos, but Friedman did mean a great deal to me, as I explained in this 2006 post on the occasion of his passing:

Milton Friedman, who just passed away, was probably one of the two most influential economists of the last century, along with Keynes. Along with F.A. Hayek, Friedman also played a key role in rescuing libertarian and classical liberal political thought from the intellectual oblivion that threatened to engulf it in the period from roughly 1932 to the late 60s. Without Friedman and the scholars he influenced, it is possible that big government conservatism would have become the only intellectually respectable alternative to the left in the wake of the Great Depression and World War II.

In addition to his more technical scholarship in economics, Friedman also invented an impressive range of public policy proposals, many of which remain relevant today. For example, his 1955 essay “The Role of Government in Education” introduced the idea of school vouchers, which recent studies show provide far greater benefits to poor and minority students than any other potential education policy reforms. Friedman was also a longtime proponent of the volunteer military on both economic and individual rights grounds. The abolition of the draft in 1971 was partially a result of his advocacy and its influence on political conservatives (most of whom previously were inclined to support conscription). Other influential Friedman policy ideas include the negative income tax (on which today’s earned income tax credit is partly based), and – of course -the monetary rule…..

On a more personal note, reading Friedman’s book Capitalism and Freedom

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