Cato: From fringe to influence in 25 years

By CHRISTIAN BOURGE, UPI Think Tank Correspondent

WASHINGTON, May 8 (UPI) -- As the Cato Institute on Thursday night marks 25 years of advocating its libertarian approach to public policy, the think tank will also be feting the fact that it has managed to move its classical liberal idealism from the fringe of the think tank realm -- and of Washington power circles -- to the center of key policy debates.

"It is certainly true that in moving to Washington and figuring out how to be an effective representative of libertarian ideals, Cato has become quite respected and respectable," Robert W. Poole Jr., told United Press International. Poole is the founder of the California-based libertarian Reason Foundation, parent organization to the Reason Public Policy Institute, another nationally influential libertarian think tank.


"In my view they have managed to do that without giving up their underlying principles, which is what a lot of people who support those ideals feared would happen when they moved to Washington," Poole said.


Thursday's anniversary celebration in some ways shows just how far Cato has come. The think tank that some once thought of as promoting radical policy proposals will be partying in a decidedly mainstream way for the nation's capital, with a black-tie gala at the city's largest ballroom, complete with political dignitaries, speeches from pundits and dancing.

At the party, Cato will also present its first bi-annual $500,000 Milton Friedman Prize for Advancing Liberty, to pioneering British economist Peter Bauer, who died unexpectedly last week at the age of 86.

Edward Crane founded Cato in San Francisco in 1977 with a grant from Texas oil baron Charles Koch. In a recent conversation with UPI, Crane explained how he wanted to create a public policy institution that reflected libertarian ideals, and focused on having an impact on the debate over issues, while avoiding the political pitfalls of well- established think tanks.

"I first became impressed with think tanks when I was here (in Washington, D.C.,) in the 1970s," said Crane. "In those days, Brookings and AEI really were kind of administrations-in-waiting. When the Republicans won, the people who would fill a democratic administration went to Brookings, and vice versa. We have never operated that way. I think we are interested in trying to influence the intellectual climate and get ideas out there."


Arguably the most significant development for Cato over the last quarter-century has been what many consider to be its highly effective effort to bring a libertarian perspective to the traditional left-right dichotomy that dominates Washington policy thinking.

Libertarianism focuses on policy practices that protect individual liberty and limit government influence. For Cato this translates into policies that promote free and open markets as well as the individual rights enumerated in the U.S. Constitution. It also places the tank in a difficult-to-define spot on the political spectrum.

Some of Cato's policy proposals -- such as privatizing social security -- reflect what are traditionally thought of as conservative principles. Other proposals -- such as calls by Cato analysts to end the drug war -- align the think tank with what are, by conventional wisdom, some of the most liberal interests in the nation.

As a result, Cato has attracted the attention of politicians from both major political parties but has not gained the same level of direct influence as other prominent think tanks. And unlike other top Washington think tanks -- such as the conservative American Enterprise Institute and Heritage Foundation, and the liberal Brookings Institution -- Cato also has not proven to be a revolving door for arriving and departing officials from various administrations.


Nevertheless, policy concepts promoted by Cato analysts -- including privatizing social security and ending the war on illicit drugs -- have come to dominate national policy debates as significant ideas that need to be seriously considered.

Crane moved Cato from San Francisco to Washington in 1981, and although to some extent Cato has embraced the politics and insider gamesmanship that is required to be a player in policy circles, Crane believes the think tank has stuck to its founding mission to influence the debate, not just be a player in politics.

"If you are not influencing the quality of ideas out there then I think you are just going to cocktail parties," said Crane.

But some critics believe that Cato's focus on influencing the policy debate -- while making only minimal efforts to have an impact upon concrete policy decisions -- tends to fall prey to the realities of the Washington policy-making apparatus.

"I would say that Cato has been a remarkable success in one way and an abject failure in another," said one think tank analyst.

He praised Cato's efforts to promote daring and thought-provoking policy concepts that other think tanks would not go near for fear of being branded as too extreme or unrealistic, and thus risking damage to their reputations.


Nevertheless, the analyst -- whose criticism as well as praise was echoed by others in the think tank community -- said promoting such original policy ideas is often self-defeating for Cato.

He said few members of Congress or their staffs even understand what Cato represents beyond the individual issues in which they are interested. In addition, he says the think tank's lack of direct impact on policy occurs because the ideas that Cato offers are often less-than-politically-viable answers to policy issues.

This analyst believes that this may account for Cato's strategy of aiming to influence the overall policy debate, rather than trying to achieve specific policy goals: The think tank knows it can have more of an impact upon how policymakers think about issues than it can on which policy decisions they make.

"What they are hoping to do is have some of their ideas move into other (more directly influential) think tanks and come out the other side," said the analyst.

Crane says Cato faced a challenge in overcoming a negative view of the philosophical basis for its policy research. He added that there are some in the think tank world who still look askance at the idea of a think tank being seen as philosophically biased -- even though this is the rule with most think tanks, which have clear political agendas whether they openly declare them or not.


"We are presenting ideas within a philosophical framework, but we are presenting them within a quality model," he said. "You can take it or leave it from that standpoint. The ideal that AEI or Brookings don't have an axe to grind philosophically is just wrong. People can discount us if they want to because they can say, 'Well, they are just libertarians,' but I don't think people do."

David Boaz, Cato executive vice president -- who has been with the organization since it moved to Washington -- believes that Cato plays a vital role in getting ideas into policy debates that otherwise would not be heard much inside the Beltway.

For instance, he cites Cato's opposition to United States involvement in the Israeli-Palestinian conflict. He said despite the combined efforts of politicians from the Republican and Democratic parties, Washington political journalists and pundits, and the Brookings Institution, American Enterprise Institute and Heritage Foundation, recent polls show that American are opposed to U.S. involvement.

"If we were not in Washington, that perspective would almost not be heard," Boaz said. "I think that is a valuable thing."

Cato's effort to promote libertarian ideals has produced some significant policy ideas along with some glaring missteps over the years. Arguably Cato's two biggest policy coups have been its success in influencing the debates over social security reform and national drug policy.


Social Security reform is one of the Cato's oldest and most important policy crusades. For example, while privatization of Social Security is now a prominent topic in the debate over how to reform the program, Cato analyst Carolyn Weaver proposed privatization as a fix to the program's insolvency problem in the first issue of the think tank's newsletter in 1979.

Since then Cato has continued to promote the idea, and President George W. Bush has made retirement savings accounts for investing in the stock market a cornerstone of his plan to keep the program solvent.

Another example of Cato's ahead-of-the-curve policy activism is a 1988 op-ed article in The New York Times, written by Boaz, in which he argued for an end to the futile and destructive drug war. This is now considered a viable argument among those who address the issue, including many conservatives who once heartily supported the War on Drugs. Fourteen years ago, Boaz argued that U.S. drug policy does little to curtail drug-related violence or drug use, and at the same time infringes upon constitutionally protected individual rights.

Cato also has always opposed protectionist government interventions on behalf of corporate America, including import quotas and farm subsidies, a position currently favored by many Washington economists.


In terms of constitutional issues, Cato has long promoted a steadfast allegiance to the 10th Amendment and a strict interpretation of limited governmental power as elaborated in the Constitution. Cato's published research on the issue has been seen as influential in Supreme Court decisions that have revived the application of limits on federal authority.

Boaz says he is particularly proud of this and added that libertarian belief in constitutionally enumerated powers is typified by Cato's opposition to the type of campaign finance restrictions that were recently passed into law.

Cato's less effective proposals include their advocacy of a return to pegging the U.S economy to the gold standard as a means to steady international markets. Their analysts also have continually opposed U.S. military involvement oversees, which in 1990 took the form of outspoken opposition against the 1991 Gulf War to liberate Kuwait from Iraq's invasion. Cato's stand against overseas involvement continues to draw criticism from prominent policy experts at other think tanks.

Cato's success can be measured in part by its economic growth. From its start as a small outfit funded by a single family devoted to libertarian ideals, the group now has its own modern $14 million high-rise office building which houses 100 staffers. The think tank also collected a record $15.8 million in funding contributions in 2001's weak economy.


Boaz said that 80 percent of that funding comes from the group's 14,000 or so individual members, with the top 100 donors providing the vast majority of funds. He reports that membership is maintained at between 12,000 and 14,000 through a small direct mail marketing campaign. The rest of the group's funding is split among support from corporations and foundations, and sales of books and related items.

As to its place in the think tank community, William Gorhan, president emeritus of the Urban Institute, who ran the left-leaning think tank for 32 years, told UPI that Cato's idealism and its refusal to succumb to political expedience to get its message across make it a welcome addition to the policy community.

"I think it is a very good thing to have think thanks that take as close to a pure market position as they do," said Gorhan. "I don't know of any other think tank that serves that purpose. It is a point of departure that should be heard."

Not all senior think tank officers give Cato quite so much credit. According to Reason's Poole, although Cato's efforts have played a major part in its success, the mainstreaming of some of Cato's policy ideas could also be attributed to the natural evolution of political ideals and generational exchanges in power. He says that with more baby boomers taking office, the overall view of libertarian ideas may no longer be seen as so radical.


Lee Edwards, a senior fellow at Heritage Foundation and that think tank's official historian, believes Cato's success can be attributed to its movement over the years toward a more practical application of libertarian theory.

"It has moved from the world of philosophy into the world of public policy," said Edwards. "It used to be utopian and now it has become increasingly pragmatic. Twenty or 25 years ago they said 'Let's eliminate national defense,' but now they are saying 'Let's bring our boys home from Europe.' They would have suggested (in their earlier days) eliminating the welfare state. Now they are saying 'Let's have privatized social security,' 'Lets have medical savings accounts'."

Of the notion that Cato has evolved from what some considered a fringe think tank promoting unrealistic policy, into a source of mainstream political ideas, Boaz says he never felt marginalized.

"I never felt kooky," he says. "The word 'radical' comes from the Latin word for root, meaning you go to the root of the matter, and I hope that we do that. In a lot of ways I think the current establishment has radically departed from the American tradition of individual liberty and constitutionally limited government. And so in that sense we are not the radicals. The radicals are people who think the federal government should extract $2 trillion from American taxpayers every year."


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