From the President of the United States and his chief economic advisors, to the mayors of major cities, policy makers are consulting libertarian scholars--notably those from the Cato Institute and the Reason Foundation, the two most influential libertarian think tanks-- when formulating policy on certain issues and executing economic change. And despite their almost identical philosophical underpinnings, the two think tanks differ in focus and style, and substantially complement each other in the policy arena.
Both Cato and Reason have done a great deal to legitimize libertarianism as a serious political perspective that must be considered when formulating policy, says Charles Murray, senior fellow at the American Enterprise Institute, one of Washington, D.C.'s top conservative think tanks.
"The Cato Institute [in particular] has established itself as a major voice in Washington," agrees E.J. Dionne, senior fellow at the Brookings Institute, Washington, D.C.
Cato scholars played a part in the present administration's scheme to privatize social security, says Cato's Executive Vice President David Boaz. In 1997, Edward H. Crane, co-founder of Cato, and another libertarian scholar met in with then-Governor of Texas, George W. Bush, while he was formulating his presidential political platform. To Boaz's surprise, and the surprise of others in Washington, the younger Bush incorporated some of Cato's libertarian ideas about privatization into his agenda.
Former Presidents Ronald Reagan and George Bush senior came from a generation unwilling to consider privatization of the system, says Boaz. Recently, however, facts and statistics from government studies and other sources have lent support to privatization, an option Cato and Reason promoted during the Reagan era and before, he says.
The Reason Foundation, although more focused on local and state issues, also is not without its influence on the new administration. The President appointed Lynn Scarlett, the Reason Foundation's former CEO, to be U.S. Assistant Secretary of the Department of the Interior. She was confirmed by the Senate in July.
Both the Los Angeles-based Reason Foundation and the Washington-based Cato Institute espouse the libertarian ideals of limited government and laissez-faire economics that reflect the 18th century political philosophy of Thomas Jefferson, described by some analysts as "classical liberalism."
Although both are influential, Reason and Cato differ in size, style, and areas of influence. Cato, which has about 76 policy analysts, focuses on foreign policy and social security. The Reason Foundation's Reason Public Policy Institute has only about 18 policy analysts, but has an influential 25-year-old monthly magazine called Reason.
Reason Foundation focuses on state and local issues including school reform, landfills, recycling, and zoning, says its founder Robert Poole. "These issues are Reason's bread and butter, but not Cato's, although Cato is not silent on these issues," says Poole.
Both think tanks publish policy papers and studies, but Cato hosts several well-attended policy forums in the nation's capital, something the West coast Reason cannot do. The advantage of being in Washington is that more policy makers, agency heads, diplomats, and other politically influential people are paid to participate in policy forums and debates, says Boaz.
These advantages compelled Cato to move from San Francisco, where it spent its first four years, to the nation's capitol in 1981, he says. Cato was founded in 1977 by its current president Ed Crane, who named it for "Cato's Letters," a series of libertarian pamphlets that helped lay the philosophical foundation for the American Revolution.
In comparison, Reason wields more influence via Reason magazine, which was founded in 1968 as a student publication at Boston University. The magazine acts as a sounding board for libertarian thought on current issues. Reason magazine is the libertarian counterpart to the left-leaning Nation magazine and the right-wing National Review, contributing to the pre-policy ideas in fashion, says Poole. Cato publishes a newsletter and a quarterly, but neither have the circulation or influence of Reason.
"Reason [Foundation] is more the pragmatist, the engineer," says Poole. "We work hard with state, local, and national officials [to formulate] how-to plans that can be implemented in a couple of years." For example, the foundation publishes guides for city managers with step-by-step instructions on how to privatize municipal services.
"My perception is that Cato's role is that of the visionary," says Poole.
Yet some think that even Cato is willing to compromise its libertarian ideals in exchange for influence.
"I don't think Cato or Reason is any purer than the other in its libertarianism," observes AEI's Murray, author of "What it Means to Be Libertarian." Cato scholars believe that Americans should not be forced to have any kind of retirement savings, he says. Yet Cato works with government officials anyway on the kind of forced privatized account that is being considered today, he says.
"Reason and Cato work to limit the federal government's power, which is the first line of defense," says Murray. "Libertarians' ideal government, however, would have no rights in certain areas. National security is needed, police are needed, and courts are needed. But, that is about it."
In comparison to the present day reality of a federal government that spends billions each year on services other than national and state security, this libertarian ideal of a truly limited government is far from a reality. And although libertarian influence has grown in recent years, the fact remains that the kind of limited government envisioned by Thomas Jefferson, James Madison, and present-day libertarians seems, at best, to be an intriguing theory, impossible to implement, short of another American Revolution.
The striving toward that goal is what will keep Cato and Reason in business -- and actively influential -- for many years to come.
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