Monday, December 29, 2014

My Experiences at the Cato Institute by Thomas DiLorenzo

In light of the recent firing of Vaclav Klaus by the Cato Institute (SEE: Vaclav Klaus Fired By Cato), I have contacted others who have also seemingly had unusual departures from the Institute, and offered Target Liberty as a platform through which they can tell their stories. Below Thomas Dilorenzo tells his story-RW

I became an adjunct scholar at Cato in the early 80s when I was a young assistant professor of economics at George Mason University.  They published two of my books with James Bennett --Underground Government: The Off-Budget Public Sector, and Destroying Democracy: How Government Funds Partisan Politics -- and many of my "policy analysis" articles and some Cato Journalarticles.  Both books were very successful. I was also one of the very first Cato scholars to publish a piece in the Wall Street Journal.  I recall Ed Crane, the former president of Cato, quizzing me on my opinion of the Austrian Business Cycle Theory.  The "acceptable" opinion was that it was nonsense.  I also recall Jim Dorn, editor of the Cato Journal, calling me over the phone to try to get me to delete a footnoted reference to Murray Rothbard's book, America's Great Depression, in one of my Cato Journal articles.  I did not comply.  So there was a relatively mild anti-Mises/Rothbard ideology at Cato at the beginning.  Hayek was acceptable, but Mises and Rothbard were apparently an embarrassment to them even though Rothbard was one of the founders of the institution.  

I also recall sitting at dinner at a Liberty Fund conference in Banff, Canada, with Milton Friedman and Ed Crane shortly before Cato built its big glass building in D.C.  Friedman was opposed to it, arguing to Crane that such a permanent presence in D.C. would be corrupting.  My former professor and GMU colleague, the Nobel laureate James M. Buchanan, was of the same opinion.  They were right.  Shortly after that, Sheldon Richman was working at Cato as an editor.  I sent him some op-ed articles and they all came back very watered down and wishy-washy (not by Sheldon but by someone else at Cato, probably Bill Niskanen).  My impression was that they were edited to be "acceptable" to congressional staffers.  That, it turns out, was the Charles Koch model for Cato: to influence the Washington Establishment.  Of course, in retrospect we all know that the opposite has happened -- the Washington Establishment has thoroughly corrupted Cato.

Then, since I had established a bit of a reputation through my publications as a critic of antitrust regulation, I was asked to write the chapter of the Cato Handbook for Congress on antitrust.  It came back so severely edited that I did not recognize it.  I had made a case for the abolition of antitrust, but the edited version recommended only tiny, marginal changes in the kind of regulation -- the kind of thing one would expect from the left-wing Brookings Institution.  

Around that time, a real, genuine, Austrian economics-inspired, free-market institution was established.  I speak of course of the Mises Institute.  I immediately sent Rothbard a small donation, and he sent me a Mises necktie as a thank you.  I wrote him back saying that I would wear it proudly and was sure that it would have a similar effect in the halls of academe to flashing a cross in front of Dracula.  I was told that he laughed his head off at that.  I then began sending my op-eds to the Mises Institute instead, and publishing them in The Free Market.  I got the opposite reaction from the one I got from Cato -- send us more, they said, not "make it acceptable to the Democrats on Capitol Hill."  

I also participated in a few of the early Mises Institute conferences by presenting papers there.  That was apparently the last straw for Cato.  They dumped me around the same time that they dumped the great Professor Ralph Raico, who had also expressed his admiration for the Misesian wing of the Austrian School.  I was a mere "adjunct scholar," of which there were already many, but Ralph had some kind of senior scholar designation and I was very surprised that they unceremoniously dumped him a week or so before they dumped me with a terse letter from Jim Dorn.  

Milton Friedman was right: Washington,D.C. has thoroughly corrupted the Cato Institute. For example, Cato held its annual Fed conference for more than a quarter of a century before it ever invited Ron Paul, the most famous libertarian critic of the Fed, to speak. Meanwhile, hundreds of Fed bureaucrats had spoken at its conferences and published their speeches in the Cato Journal.  It was only after Ron became a presidential candidate and began drawing gigantic audiences that he was invited -- after some people associated with Cato had orchestrated a vicious smear campaign against him.  Ever the crusader for free markets, Ron accepted their invitation anyway despite all of the conniving smears against him by some of the weasely nobodies at Cato.   

Thomas J. DiLorenzo is professor of economics at Loyola College in Maryland and a member of the senior faculty of the Mises Institute.  He is author of The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War and Lincoln Unmasked: What You're Not Supposed to Know About Dishonest Abe.


  1. It's why I've never given a penny to the corrupt Cato maggots and never will.

  2. This is sad. I donated to Cato many many years ago, before it became apparent that they are dedicated to working within the system rather than trying to overthrow it. Once they made that decision, it was inevitable that they'd be corrupted.