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There is a fight going on inside the Cato Institute, which is a very well-funded libertarian think tank that deals with policy issues. That is what think tanks do. They are policy-oriented.

Cato is a non-profit organization that is literally as well as figuratively inside the Washington Beltway, close to the corridors of power. Ed Crane runs it. He is now in a fight for control with board member Charles Koch.

This has happened before. It was co-founded by Murray Rothbard, Ed Crane, and Charles Koch in 1974, but Rothbard was removed in 1981 by the board. The board wanted to move Cato into political policy-making. Rothbard thought it should be devoted to scholarship.

Cato’s official mission today is “to increase the understanding of public policies based on the principles of limited government, free markets, individual liberty, and peace. The Institute will use the most effective means to originate, advocate, promote, and disseminate applicable policy proposals that create free, open, and civil societies in the United States and throughout the world.”

There is always a conflict between pure theory and practical application. This is true in every field, in all locations, and in every time period. Timeless principles must be translated into policies. Policies are under the influence of time. Time brings changes. It forces compromises with timeless principles. The defenders of timeless principles face the criticism of “irrelevance!” from activists. The defenders of timeless principles respond with “sellouts!” Such is life.

So, I do not want to give the appearance that I think that an organization devoted to practical applications of general principles is a bad idea. There has to be some translation of general principles into action. The problem is this: When an organization moves into policy-making, it moves into the area of political compromise. Compromise is what politics is all about. You have to give a little to get something. Or, as former Speaker of the House Sam Rayburn put it over 60 years ago, you have to go along to get along. Politics is all about vote-trading.

We need intellectual organizations that deal with theory, history, and fundamentals. An example of such an organization is the Mises Institute. It was founded in 1982 by Rothbard and Lew Rockwell. It is devoted to producing theoretical materials, historical materials, and commentary on what is wrong with contemporary politics and economics. It is tied to a specific worldview, that of Austrian School economics. Because Murray Rothbard was also a revisionist historian, better known as a conspiracy theorist, the Mises Institute also promotes revisionist history. This is necessary, because history books are written by the victors of political battles, and the victors of political battles in the United States after the presidency of Grover Cleveland have been statists.

The problem comes when these principles are applied to politics. There are productive ways to do this. There are also unproductive ways. Think tanks devoted to public policy in general are the wrong way. The crisis at Cato is an illustration of what is wrong with this approach.


The self-imposed problem that the Cato Institute had after Rothbard was expelled was to maintain its commitment to libertarian theory and also achieve some degree of influence inside the Washington Beltway.

Three decades ago, I would read the Cato Institute’s scholarly journal, and I got a lot out of it. There were good articles in it on the failures of specific government regulation. We need ammunition of this kind to fight the good fight against the extension of the federal government.

The problem comes when the organization attempts to move from general criticism to specific political action. An organization on the fringe of the Establishment has to deal with the day-to-day activities of Congress. It is one thing to criticize some preposterous decision by some obscure bureaucrat in some powerful federal bureaucracy. Such nonsense deserves public exposure. The master of this is James Bovard. He is so good at it that I have never been able to read more than 20 pages in a Bovard book. I get too angry. He lists case after outrageous case of attacks on liberty. How he assembled these, pre-Internet, remains a mystery.

In attempting to work with politicians on ways to make the federal government less oppressive, there has to be a compromise with the federal government. What we find is that think tanks get into resistance more. They abandon reversal mode. They see that reversal is impossible, so they try to slow down the juggernaut. They recommend surrender by degree. It is like adding an amendment to a bill to place everyone in chains. The amendment calls for rubber insulation on each link.

Libertarians and conservatives attempt to block horrific pieces of legislation, but they do not have the votes to register effectively in Congress. Only activist lobbying organizations get anything stopped. Non-profit think tanks don’t.

So, the temptation is always there to work deals behind the scenes. The deals always involve trade-offs. You give a little to get a little. What we have found for the past hundred years is that conservatives surrender their principles of limited government whenever they go to Washington and attempt to roll back the federal government.

Ron Paul is the most conspicuous exception in our generation. In the late 1940s and early 1950s, Howard Buffett was the exception. But neither of them was successful in blocking any significant piece of legislation, and neither of them ever got a piece of legislation passed into law. Their sole purpose was to serve as sounding boards within the government against the government.

Howard Buffett was not able to persuade the nation’s voters. He was not even able to persuade his son. But Ron Paul has persuaded millions of voters, and this has been significant in the development of American resistance politics. It is a turning point. It is a turning point, not because he was ever able to work with an organization like Cato Institute to block something that was being planned by the government, but because he spoke out for 35 years.

Nothing that the Cato Institute has ever done has blocked anything significant that the federal government has planned. In too many cases, Cato has served as a cheerleader inside the Washington Beltway for terrible things that Republican presidents have done to extend the power of the federal government. A recent article in the liberal magazine, The Nation, gives concrete examples of the degree to which the Cato Institute was in bed with the Bush administration.


I experienced this firsthand in the early months of the Reagan administration. Conservatives thought they might have some influence in at least getting a few people placed inside the federal bureaucracies. When the dust settled, the only conservative running anything in Reagan’s administration was C. Everett Koop. Koop became the Surgeon General – a minor position.

He was immediately shut out by the Left on the issue of AIDS. He had no real power. Only after he went along to get along was he allowed to go public on the issue. Under his authority, a 1986 pamphlet by him was issued promoting safe sex. He did not come out staunchly in favor of celibacy until marriage. He promoted the use of condoms. The government printed over 100 million copies of it and mailed them out. Yet he had been a colleague of the Christian activist author Francis Schaeffer. They had produced an anti-abortion film, and that was the basis of his appointment by Reagan to the position. Conservative Christians were appalled. They saw that they had been sold out. Too late.

Early in the Clinton administration, Koop came out strongly in favor of Hillary Clinton’s proposal to promote government healthcare insurance. He went along to get along, and he never stopped going along, even after he was long gone from the Washington Beltway.


The lust for power in Washington is greater even than the lust for adultery and booze. Combined.

There are conservative activists who are desperate to have influence. They want to be players. They want to be known as players. They want to get inside those formerly smoke-filled back rooms where the deals are made. So, they head for Washington. That is where power is concentrated.

If you really believe that the direction of the country is suicidal, you have to make a decision. You have to decide whether to put your time, money, energy, and hopes in a program of local resistance, or whether to put your time, money, energy and hopes in a program that will somehow reverse the accelerating federal train as it heads for the collapsed trestle. You have to decide either to get off the train, by jumping if necessary, or else you have to try to persuade the engineer to put on the brakes.

The conservative movement has never been successful in putting on brakes from inside the Washington Beltway. This has been true ever since the election of Franklin Roosevelt. The one major case of victory was the defeat of the Equal Rights Amendment, and that was engineered from Alton, Illinois, by the Eagle Forum. The defeat was imposed on the Beltway by statewide activists, mostly conservative women, who convinced state legislatures not to ratify the monstrosity. That battle was lost inside the Beltway. Congress voted overwhelmingly for the amendment, and then submitted it to the states for ratification.

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April 24, 2012

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

Copyright © 2012 Gary North