Gucci Little Piggy

The libertarians are going to the mattresses.

A quick and dirty synopsis of what’s going on:

Charles Koch founded the leading libertarian think tank Cato Institute way back in 1977 (or 1974 depending on how you look at it).  “Ownership” of the organization was divided up among shareholders including one, William Niskanen, who died late last year.  Besides Charles Koch and his brother David, current Cato president Ed Crane holds the other shares.  In total, there are 64 shares (16 per holder) with 16 of those at the center of this dispute.  The pro-Cato contingent – led by Crane – wants to prevent the Kochs from thrusting one of their infinite cadre of tentacles into the organization as most of the libertarian group feels that Koch wants to use Cato’s carcass as a pod for pushing the GOP’s political agenda.

Upon Niskanen’s death, his shares apparently went into guardianship with his widow.  The Kochs claim that per an old contract, those shares must now either be given back to Cato or be offered to sharedholders, a scenario that would benefit Koch the Flush.

So two arguments are being made.  One current Cato scholar, Julian Sanchez, has tendered a pre-resignation in the event that the Kochs win the case.  That is the argument – one shared by most on the Cato-Crane train – for institutional integrity.  That group enjoys the intellectual freedom of a libertarian-minded institution that is not used as a vehicle for the GOP.  On the other hand, the Kochs seem to be making the case that contractual integrity supercedes institutional integrity – a point of view they suggest embodies a purer libertarian argument.  But discussions of integrity are strange given the history of Cato.

David Weigel’s piece at Slate seems to be the most widely cited document on the matter so I’ll reference it.  His Genesis and Exodus story plays out thusly:

In the beginning, there was Charles Koch. Ed Crane, fed up with the nascent Libertarian Party, was approached by Koch for ideas about where to take the movement. Crane’s idea: A new think tank, based in San Francisco, named after Cato’s Letters. (This, according to the great libertarian historian Brian Doherty, was Murray Rothbard’s idea.) The Cato Institute was founded in 1977. Eight years later, as it relocated to Washington, a new agreement was drawn up that split the ownership of the think tank four ways: Crane, Koch, George Pearson, and William Niskanen. Each had 16 shares of the Cato Institute, $1 per share. But in 1991, as his brother David joined Cato and grabbed his own 16 shares, Charles Koch walked away.

The gap in this timeline is as onerous as Nixon’s 18-minute Watergate erasure.  Weigel basically yadda, yaddas the double penetration that ol’ Murray Rothbard suffered at the…hands of Charles Koch and Ed Crane.  And just a minor point - and not like I know enough about ol’ Murray Rothbard - I believe Rothbard has a face, a soul, and a name that requires one to place ‘ol” in front of his name.  He’s anarchonistic and a jester in his own right.

Murray Rothbard

Weigel mentions the founding of Cato but doesn’t mention that Rothbard was one of the founding members.  He mentions the four shareholders on the books as of 1985 but doesn’t mentioned what happened the 8 years in between.  This is a curious ommission as it seems to undercut the Crane-Cato argument and doesn’t make Charles Koch look good either. Ol’ Murray tells the story:

On Black Friday, March 27, 1981, at 9:00 A.M. in San Francisco, the “libertarian” power elite of the Cato Institute, consisting of President Edward H. Crane III and Other Shareholder Charles G. Koch, revealed its true nature and its cloven hoof. Crane, aided and abetted by Koch, ordered me to leave Cato’s regular quarterly board meeting, even though I am a shareholder and a founding board member of the Cato Institute. The Crane/Koch action was not only iniquitous and high-handed but also illegal, as my attorneys informed them before and during the meeting. They didn’t care. What’s more, as will be explained shortly, in order to accomplish this foul deed to their own satisfaction, Crane/Koch literally appropriated and confiscated the shares which I had naively left in the Cato Wichita office for “safekeeping,” an act clearly in violation of our agreement as well as contrary to every tenet of libertarian principle.

Julian Sanchez, the Cato scholar, wrote a piece on the entire affair stating that it is not, contrary to what others are writing on the topic, “ironic” that one libertarian tribe is trying to alter the scholarship and message of another libertarian tribe.  But what Sanchez misses on the discussion of irony is that Koch and Crane are now fighting for ownership of 16 shares of stock after they ganged up on ol’ Rothbard and pulled the same stunt.  The behind-the-scenes story is that Rothbard was pushing Ludwig von Mises and Austrian economics and that because his vision wasn’t as politically palatable as a Friedman/Hayek Chicago school libertarianism, he was pushed out and stripped of his stock.  Which is to say, that is the irony in all of this.  They’re fighting over who is right and who is wrong after both men wronged ol’ Murray.  Live by the sword, die by the sword, y’all.