The Corner

Koch v. Cato

As some readers may know, I’ve blogged quite extensively on the Koch-Cato conflict.  Here is the post outlining my basic position, which is that a Koch takeover of Cato, however well-intentioned, will necessarily diminish the Institute’s credibility and compromise Cato’s ability to advance individual liberty.  This is true whether or not the Kochs are within their legal rights to take such actions and whether or not they have better ideas as to how Cato should be run than current Cato President Ed Crane.  As I wrote last Friday:


Whatever the merits of the Kochs’ claim, I cannot understand how their actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums and personal efforts over the years.  Even assuming their legal claim has merit, a legal victory will permanently injure the Cato Institute’s reputation.

Many libertarian-leaning organizations receive money from the Kochs and their foundations and are attacked on this basis.  Such attacks can be deflected, as financial support is not the same thing as control.  But if the Koch brothers themselves represent the controlling majority of an organization’s board, that organization is, by definition, a Koch-run enterprise.  Progressive activists and journalists will have a field day with this.  They will forevermore characterize the Cato Institute as “Koch-controlled” — and, as a legal matter, they will be correct.  No efforts to re-establish the Institute’s credibility or independence will overcome this fact.

The Koch brothers may well have legitimate concerns about how the Cato Institute is managed.  I don’t know.  They may have good ideas about how to make the Institute more effective.  Again, I don’t know.  From my perspective, it seems that Cato’s work nicely complements the efforts of more activist organizations the Kochs support, but I may not see the whole picture.  That’s not the point. Even if one assumes that the Kochs have better ideas for how Cato should direct its resources, know more about how to advance individual liberty, and are correct that the Institute is too “ subject to the personal preferences of individual officers or directors,” any benefit from whatever changes they could make will be outweighed to the permanent damage to Cato’s reputation caused by turning it into a de facto Koch subsidiary.  In short, they will have destroyed the Cato Institute to save it.

I elaborate on some of the arguments in this post.  I also posted the perspective of the Cato Institute’s Jerry Taylor and an additional roundup of commentary.

Jonathan H. Adler is the Johan Verhiej Memorial Professor of Law and Director of the Center for Business Law and Regulation at the Case Western Reserve University School of Law.

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