Gordon and Raimondo Slam Ed Crane Take on Murray Rothbard Split With the Cato Institute

The controversy over the Murray Rothbard split with the Cato Institute and Koch brothers has bubbled to the surface once again as a result of an interview given by Ed Crane.

David Gordon writes at LewRockwell.com:

Murray Rothbard was one of the founders of the Cato Institute; but, within a few years, he had come to a bitter parting of the ways with Cato’s president, Ed Crane, and with the Institute’s financial patron, Charles Koch.

How does this split come about? A recent interview gives Crane’s side of the story. (Crane’s comments on Rothbard begin at around 18 minutes into the interview.) Unfortunately, his account is without merit. As he tells the tale, Murray Rothbard was at first a “hero” of his. Rothbard was great company for his friends, but not a good person to have as an enemy; and he did not like Crane.

Why not? The problem, says Crane, was Inquiry magazine, edited by Bill Evers. The magazine aimed to win the political left to libertarianism. Crane thought this a poor strategy, as the left was not interested in moving in a libertarian direction. Evers nevertheless persisted; he wanted to impress his Marxist academic friends at Stanford. In any case, Inquiry was costing Cato a great deal of money. When Crane decided to close Inquiry, Rothbard turned against him and endeavored unsuccessfully to have him fired.

Crane’s remarks misrepresent the facts. A sharp antagonism had developed between Evers and Crane, and Rothbard supported Evers; but Rothbard’s split from Cato was not caused by the closure of Inquiry. Probably the dominant cause was Rothbard vocal criticisms of Ed Clark’s 1980 campaign, managed by Crane, for the presidency. As a result of his criticisms of Crane and Koch, Rothbard was forced off the Cato Board of Directors. I have written about these tumultuous events in more detail here.

The falsity of Crane’s account is readily demonstrable. Rothbard was ousted from the Cato Board early in 1981, but Inquiry was not closed until 1984.

Justin Raimondo responded on Twitter:

1) .@TheCraneReport lies about @CatoInstitute break w/Murray Rothbard: 20 mins. into this http://t.co/t09EzH6bds Truth is complete opposite.

— Justin Raimondo (@JustinRaimondo) May 4, 2015

2) Rothbard broke with Cato over 1980 Clark campaign, which described libertarianism as "low tax liberalism" https://t.co/y7ZKsunSQe

— Justin Raimondo (@JustinRaimondo) May 4, 2015

25 mins in http://t.co/t09EzH6bds @TheCraneReport sez Rothbard purged because he was a leftist/Leninist. The truth: https://t.co/ZXKz0y1yhY

— Justin Raimondo (@JustinRaimondo) May 4, 2015

.@TCBurrus Ed Crane absurdly claims Rothbard purged from Cato because he was a "Leninist" leftist. Here's the truth: https://t.co/ZXKz0y1yhY

— Justin Raimondo (@JustinRaimondo) May 4, 2015

It should also be noted that Crane purged quite a number of important libertarians and top scholars from Cato, including Roger Lea MacBride, board member and shareholder, David Theroux, vice president, Leonard P. Liggio, vice president,Williamson M. Evers, vice president and editor of Inquiry and Ronald Hamowy, editor of Inquiry. Rothabrd was not an isolated case.

MacBride was the first presidential elector in U.S. history to cast a vote for a woman when, in the presidential election of 1972, he voted for the Libertarian Party candidates John Hospers for president and Theodora "Tonie" Nathan for vice president.

Theroux, after his ouster from Cato. went on to found the The Independent Institute a very successful.  libertarian think tank. Liggio, in addition to becoming a law professor became the executive director of the John Templeton Foundation Freedom Project at the Atlas Network. Evers is a research fellow at the Hoover Institution and Hamowy became an important scholar. Gordon notes that his work on Hayek became well known.

It is difficult to think of any of those that Crane has kept around him that have gained the stature in academic and libertarian circles of those he ousted.

But what was it specifically that caused Crane to oust Murray Rothbard, arguably the greatest and most important libertarian of the 20th century? In 1981, just after his ouster, Rothbard provided details on what really went down:

Though my own rift with Crane began in the spring of 1979, no effort was made to remove me from the Cato board until this spring. To me it is clear that the real cause was not the Lib. Forum article [“The Clark Campaign: Never Again”] but the success which I and others had at the November board meeting in beginning to call Crane to account. I had been a one-man needler of Crane’s management at Cato board meetings for a year or more; until last November, I could be ignored as having only nuisance value, since I was just one lone voice tolerated on the board. But last November, suddenly, I had two allies, almost a majority of the Cato board. Over Crane’s initial opposition, I managed to carry the board resolution barring all senior Cato officers from partisan political activity, which helped insure Cato’s continued nonprofit tax-exempt status. Also at the board meeting we managed to set up a Salary Review Committee, to review the salaries of all the top executives — a commonplace for most boards but unheard of at Cato, where Crane prefers to run everything out of his hip pocket. It was because of this success that I had to go, and go quickly.

While all the...failings of Crane certainly played a large cumulative role, my own break with Crane came sharply in the spring of 1979. Typically, it came over matters that involved not only the Cato Institute but also the Libertarian Party and the movement as a whole.

The Sarajevo of the Cato Institute was a seemingly simple act: the hiring by Crane of Dr. David Henderson as his policy analyst and economist. The hiring of Henderson came as a thunderclap at Cato. Why was he hired? The firestorm of opposition to Henderson that broke out among all the Cato executives was based not so much on personal hostility as on the fact that the Cato Institute was supposed to be deeply committed to Austrian economics. Yet Henderson was not only not an Austrian but strongly hostile. So why was he hired? Especially since all those at Cato with economic backgrounds were bitterly opposed to the appointment.

Henderson is long gone, as his appointment turned out to be yet another Crane mistake, this time admitted as such by all concerned. Yet we never did find out precisely why Henderson was hired, apart for being a way from Crane to impose his will against almost unanimous advice.

-RW