Cato Institute

Cato Institute
Cato Institute building in Washington, D.C.
Established	1977
Chairman	William A. Niskanen
President	Edward H. Crane
Faculty	40
Staff	33
Budget	US$19.4 million[1]
Location	Washington, D.C.
Address	1000 Massachusetts Avenue NW
Website	www.cato.org

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The Cato Institute is a libertarian think tank headquartered in Washington, D.C.

The Institute's stated mission is "to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets, and peace" by striving "to achieve greater involvement of the intelligent, lay public in questions of (public) policy and the proper role of government." People for the American Way says Cato "often works in coalitions with right-wing groups" on common issues, although they don't offer any examples.^[2] Cato scholars have been sharply critical of the Bush administration on a wide variety of issues, including the Iraq war, civil liberties, and excessive government spending.

History

The Institute was founded in San Francisco, California in 1977 by Edward H. Crane and initially funded by Charles G. Koch. The Institute is named after Cato's Letters, a series of British essays penned in the early 18th century expounding the political views of philosopher John Locke. The essays were named after Cato the Younger, the defender of republican institutions in Rome.

Murray Rothbard was an important founding member. He was part of Cato's original three-member board and suggested its name. After he came into sharp disagreement with other members, he left in 1981.^[3]

Cato relocated to Washington, D.C. in 1981, settling first in a townhouse on Capitol Hill. The institute moved to its current location on Massachusetts Avenue in 1993.

In November 2002, shortly after Cato's website was named the "Best Advocacy Website" by the Web Marketing Association, the Alexa ratings service issued a report saying that it was "the most popular think tank site over the past three months," receiving a total of 188,901 unique visitors during the previous month of September.^[4]

Publications

The Cato Institute publishes the periodicals Cato's Letter, Cato Journal, Regulation, Cato Supreme Court Review, and Cato Policy Report, as well as policy studies. Cato's books include Social Security: The Inherent Contradiction, In Defense of Global Capitalism, Voucher Wars, You Can't Say That!: The Growing Threat to Civil Liberties from Antidiscrimination Laws, Peace and Freedom: A Foreign Policy for a Constitutional Republic, Restoring the Lost Constitution, and Reclaiming the Mainstream: Individualist Feminism Reconsidered.

Cato published Inquiry Magazine from 1977 to 1982. They also had a monograph series called "Cato Papers".

Principles

The Cato Institute's work is rooted in the classical liberal tradition of John Locke and Adam Smith. Cato scholars base their work on a variety of philosophical and religious perspectives. For example, a 2005 pamphlet by Dan Griswold, Cato's director of trade policy studies, made the case for individual liberty from a Christian perspective. ^[5] Cato policy analyst Will Wilkinson has argued that the case for liberty can best be made by combining key insights of Hayek and John Rawls. ^[6]

Three Nobel Laureates have been particularly influential to the Cato Institute's work. Milton Friedman first proposed the concept of school choice, which is now promoted by Cato's Center for Educational Freedom. He also was an influential advocate for a number of positioned by Cato scholars, including monetarism and the end of the draft and the drug war. F.A. Hayek's ideas about spontaneous order and the importance of the price mechanism have been fundamental to Cato scholars' work on a wide variety of topics. And James Buchannan's work in public choice economics have been fundamental to Cato scholars' critiques of many government programs.

Ayn Rand's philosophy of Objectivism has had a particularly strong influence on the Cato Institute. Objectivists share with other libertarians a respect for individual liberty, free markets, and limited government. In 1997 David Boaz, Cato's exectuve VP, wrote he believed all Objectivists are necessarily libertarians. ^[7]

Strained relationship with conservatism

In the years immediately following the Republican Revolution, the Cato Institute was often seen as a standard-bearer of the U.S. conservative political movement. Barry Goldwater and Ronald Reagan, credited with reshaping and rejuvenating the Republican Party, and key contributors to the late-20th century conservative movement, were heavily influenced by libertarian ideals.

However, the Cato Institute officially resists being lumped in with the conservative movement because "conservative smacks of an unwillingness to change, of a desire to preserve the status quo".^[8] Such tensions have become increasingly evident in recent years, as the Institute has become sharply critical of current Republican standard bearers.^[9] The growing division may be attributable to Republican officeholders' growing support of policies promoting government intervention in the economy and society, increased budgetary spending, and neoconservative foreign policies.

Cato scholars have also been strongly critical of the expansion of executive power under President George W. Bush^[10], and his management of the Iraq War.^[11] In 2006 and 2007, Cato published two books critical of the Republican Party's perceived abandonment of the limited-government ideals that swept them into power in 1994. ^[12][13] For their part, only a minority of Republican congressmen supported President George W. Bush’s 2005 proposal to partially privatize Social Security, an idea strongly backed by the Institute. And in the 109th Congress, President Bush's immigration plan—which was based on a proposal by Cato scholar Dan Griswold^[14]—went down to defeat largely due to the eventual opposition of conservative Republican congressmen.^[15]

Tensions with Objectivism

Main article: Libertarianism and Objectivism

Despite their fundamental agreement on political issues, relations between the Cato Institute and Objectivist organizations has not always been cozy. Ayn Rand scorned the nascent libertarian movement during her lifetime^[16], and her intellectual heir, Leonard Peikoff, has followed her lead, refusing to associate with libertarian organizations, Cato included. Other Objectivist organizations, notably the Atlas Society have been more friendly. At an October 2007 event sponsored by the Atlas Society to celebrate the fiftieth anniversary of Atlas Shrugged's publication Cato President and Founder Ed Crane has stated he and all the senior leadership of the Cato Institute consider themselves Objectivists. ^[17] He emphasized that Objectivists and other libertarians are natural allies, and encouraged Objectivists to become more involved in the broader libertarian movement. Cato Institute leaders have worked for years to improve relations between Objectivists and libertarians.^[18]

On the Issues

According to its motto, the Cato Institute advocates policies that advance "individual liberty, limited government, free markets, and peace.” Cato scholars are libertarian in their policy positions, typically advocating diminished government intervention in domestic, social, and economic policies and decreased military and political intervention worldwide. Specific policy proposals advanced by Cato scholars include such measures as abolishing the minimum wage,^[19] reforming illegal-drug policies,^[20] eliminating corporate welfare and trade barriers,^[21] diminishing federal government involvement in the marketplace^[22] and in local and state issues,^[23] enhanced school choice,^[24] and abolishing government-enforced discrimination along with restrictions on discrimination by private parties.^[25]

On Social Security

The Cato Institute established its Project on Social Security Privatization in 1995, renaming it the Project on Social Security Choice in 2002. The change sought to emphasize that its proposals would allow Americans to opt in or out of the program. Like other organizations supporting the "personal healthcare savings accounts" concept, Cato scholars now avoid using the word privatization in describing such policies, due to the presently unpopular sentiments that the public associates with it.^[26]

Cato's Social Security proposal involves giving workers the option of investing half of their contributions (6.2 per cent) into individual accounts, in return for forgoing the accrual of any future Social Security entitlement benefits. For workers selecting this option, future claims on already-accrued Social Security benefits could be sold as bonds, allowing the workers to re-invest those funds in higher-yielding securities, if desired. However, for these workers, past and future payroll tax contributions to Social Security, nominally made on behalf of the employer, would go to funding the Social Security benefits of people remaining in the traditional system.

Cato scholars have emphasized that the present Social Security system is unsustainable, and will necessitate future tax hikes and benefit cuts to make ends meet. Because of the "pay as you go" nature of the system, present workers are taxed to support past ones (i.e., current retirees). As the ratio of workers-to-retirees drops, workers will bear an increasing payroll-tax burden. Cato scholars also emphasize the benefits of inheritability. Unlike the status quo, Cato's plan would allow a worker who dies before reaching their (variable) retirement age to leave the assets in his/her personal account to legal heirs.

Critics^{[attribution needed]} have charged that Cato's plan relies on a pivotal assumption: that the projected returns from the stock market — which is where some of the account funds would be invested — will outweigh the increased risk of possibly losing those funds, if stock market performance is worse than expected. Some^{[attribution needed]} warn that Cato's projected rate-of-return will not be high enough to provide a sufficient risk premium.

On foreign policy and civil liberties

In recent years, Cato's non-interventionist foreign policy views, and strong support for civil liberties, have frequently led Cato scholars to criticize those in power, Republican and Democrat. Cato scholars opposed President George H. W. Bush's 1991 Gulf War operations, President Bill Clinton's interventions in Haiti and Kosovo, and President George W. Bush's 2003 invasion of Iraq. On the other hand, Cato scholars supported the 2001 invasion of Afghanistan as a response to the terrorist attacks of September 11, 2001.^[27]

Cato policy experts have been similarly critical of recent perceived infringements upon American's civil liberties. They sharply criticized then-Attorney General Janet Reno's 1993 raid of the Branch Davidians in Waco, Texas. More recently, they have opposed the USA Patriot Act, the imprisonment of so-called unlawful enemy combatants like José Padilla, and the second Bush Administration's aggressive assertions of unilateral executive authority.

On other domestic issues

Cato has published strong criticisms of the 1998 settlement that many U.S. states signed with the tobacco industry.^[28] Among other laissez-faire policies, Cato scholars have argued for allowing immigrants to work in the U.S.^[29]

The Cato Institute argued in favor of a Balanced Budget Veto Amendment to the United States Constitution.^[30] This would, according to the Institute, act as a self-enforcing mechanism to reduce deficit spending by the U.S. government.

In 2003 Cato filed an amicus brief in support of the Supreme Court’s decision in Lawrence v. Texas, which struck down the few remaining state laws that made private, non-commercial homosexual relations between consenting adults illegal. Cato cited the 14th Amendment, among other things, as the source of their support for the ruling.

Domestically, Cato scholars have been sharp critics of current U.S. drug policy,^[20] and the perceived growing militarization of U.S. law enforcement.^[31]

On environmental policy

The Cato Institute holds regular briefings on global warming with global warming skeptics as panelists. In December 2003, panelists included Patrick Michaels, Robert Balling and John Christy. Balling and Christy have since made statements indicating that global warming is, in fact, related at least some degree to anthropogenic activity:

No known mechanism can stop global warming in the near term. International agreements, such as the Kyoto Protocol to the United Nations Framework Convention on Climate Change, would have no detectable effect on average temperature within any reasonable policy time frame (i.e., 50 years or so), even with full compliance.^[32]

In response to the World Watch Report in May 2003 that linked climate change and severe weather events, Jerry Taylor said:

It's false. There is absolutely no evidence that extreme weather events are on the increase. None. The argument that more and more dollar damages accrue is a reflection of the greater amount of wealth we've created.^[33]

Cato's relationship with the mainstream scientific community has at times been strained. For example, while experts such as Sarah Darby (Oxford), Jon Samet (Johns Hopkins) and Bill Field (University of Iowa) have demonstrated that residential radon exposure is a major public health risk, then-Cato adjunct fellow Steven Milloy re-published articles by Michael Fumento dismissing this research and mounting personal attacks on the scientists. Neither Milloy nor Fumento are scientists.^[34]

Funding

The Cato Institute is classified as a 501(c)(3) organization under the U.S. Internal Revenue Code. The institute performs no contract research and does not accept government funding. For revenue, the institute is largely dependent on private contributions.

According to its annual report, the Cato Institute had fiscal year 2007 expenses of $19.4 million and revenue of $20.4 million. The report notes that 74% of Cato's income that year came from individual contributions, 15% from foundations, 3% from corporations, and 8% from "program and other income" (e.g., publication sales, program fees).^[1]

Foundation support

The Cato Institute has been supported by:

• Castle Rock Foundation (formerly known as The Coors Foundation)
• Charles G. Koch Charitable Foundation
• Earhart Foundation
• JM Foundation
• John M. Olin Foundation, Inc.
• Claude R. Lambe Charitable Foundation
• Lynde and Harry Bradley Foundation
• Scaife Foundations (Sarah Mellon Scaife, Carthage)

Corporate support

Like most think tanks, Cato receives support from a variety of corporations, but corporations are a relatively minor source of support for the Institute. In fiscal year 2007, for example, corporate donations accounted for only three percent of its budget.^[1]

According to Cato supporters, the relative paucity of corporate funding has allowed the Institute to strike an independent stance in its policy research. In 2004, the Institute angered the U.S. pharmaceutical industry by publishing a paper arguing in favor of "drug re-importation."^[35] A 2006 study attacked the Digital Millennium Copyright Act.^[36] Cato has published numerous studies criticizing what it calls "corporate welfare", the practice of public officials funneling taxpayer money, usually via targeted budgetary spending, to politically-connected corporate interests.^{[37][38][39][40]} For example, in 2002, Cato president Ed Crane and Sierra Club executive director Carl Pope co-wrote an op-ed piece in the Washington Post calling for the abandonment of the Republican energy bill, arguing that it had become little more than a gravy train for Washington, D.C. lobbyists.^[41] Again in 2005, Cato scholar Jerry Taylor teamed up with Daniel Becker of the Sierra Club to attack the Republican Energy Bill as a give-away to corporate interests.^[42]

Still, some critics have accused Cato of being too tied to corporate funders, especially in the 1990s. Critical sources report that Cato received funding from Phillip Morris and other tobacco companies in the 1990s, and that at one point Rupert Murdoch served on the boards of directors of both Cato and Phillip Morris.^[43] The Knight Ridder newspapers reported that in the late 1990s Cato received financial contributions from the American International Group, "an insurance and financial services company whose business includes managing U.S. retirement plans" as Social Security reform emerged as a more prominent issue. Between 1998 and 2004 the Cato Institute received $90,000 of its funding from ExxonMobil — about a tenth of a percent of the organization's budget over that period.^[44]

Associates in the news

• Several Cato Institute-affiliated scholars have achieved academic distinction, including Nobel laureates F. A. Hayek, James M. Buchanan, and Vernon L. Smith.
• Cato senior fellow Randy Barnett argued the Gonzales v. Raich case in front of the Supreme Court in 2004.
• Mencken Fellow P. J. O'Rourke is the bestselling author of Parliament of Whores, All the Trouble in the World, and other books.
• Cato policy analyst Radley Balko was cited by Justice Breyer's dissent to the Supreme Court's 2006 Hudson v. Michigan decision, concerning "no knock" raids.^[45]
• In December 2005, Doug Bandow, a Cato fellow, admitted taking money from lobbyist Jack Abramoff in exchange for writing columns for the Copley News Service favorable to Abramoff clients. The columns did not, however, deviate from Bandow's own views. Copley suspended his column. Bandow resigned from Cato on December 15.
• In 1999, David Platt Rall, a prominent environmental scientist, died in a car accident. Steven Milloy, at the time a Cato adjunct scholar, celebrated Rall's death on his site junkscience.com, writing: "Scratch one junk scientist who promoted the bankrupt idea that poisoning rats with a chemical predicts cancer in humans exposed to much lower levels of the chemical — a notion that, at the very least, has wasted billions and billions of public and private dollars." Cato Institute President Edward Crane called Milloy's attack an "inexcusable lapse in judgement and civility," but Milloy refused to apologize. He retained his position with Cato until the end of 2005. Following renewed controversy over the financial support Milloy received from tobacco and oil companies while writing editorial pieces favorable to them, Milloy's name was removed from the list of Cato adjunct scholars.^[46]
• Adjunct scholar Robert L. Bradley, Jr. was a speech writer for former Enron CEO Kenneth Lay.

Milton Friedman Prize

Since 2002, the Cato Institute has awarded the Milton Friedman Prize for Advancing Liberty every two years to "an individual who has made a significant contribution to advancing human freedom." The prize comes with a cash award of $500,000.

Past prize winners

• Peter Thomas Bauer (2002)
• Hernando de Soto (2004)
• Mart Laar (2006)

Notable associates

Cato president Ed Crane (left) and board member Jeff Yass (center) talk with guest speaker Walter E. Williams (right) at the 15th Annual Benefactor Summit (2003)

Policy scholars

• David Boaz, Executive Vice President
• Edward H. Crane, President and CEO
• Jagadeesh Gokhale, Senior Fellow
• Daniel T. Griswold, Director, Center for Trade Policy Studies
• Andrey Illarionov
• Brink Lindsey, Vice President for Research
• William A. Niskanen, Chairman
• Tom G. Palmer, Senior Fellow, Director of Cato University
• Roger Pilon, Vice President for Legal Affairs
• José Piñera, Co-chairman, Project on Social Security Choice
• Alan Reynolds, Senior Fellow
• John Samples, Director, Center for Representative Government
• Jerry Taylor. Senior Fellow
• Ian Vásquez, Director of the Center for Global Liberty and Prosperity
• Will Wilkinson, Policy Analyst
• Sigrid Fry-Revere, Director of Bioethics Studies

Adjunct scholars

• Donald J. Boudreaux
• Robert L. Bradley, Jr
• Tyler Cowen
• Michael Cox (Academic)
• Richard Epstein
• Michael Gough
• Tibor Machan
• Randal O'Toole
• Vernon L. Smith
• Thomas Szasz
• Robert Corn-Revere

Fellows

• Randy E. Barnett
• James Bovard
• James M. Buchanan
• Steve H. Hanke
• F. A. Hayek
• Andrei Illarionov
• Penn Jillette
• David Kopel
• Johan Norberg
• P. J. O'Rourke
• Jim Powell
• Teller

Board of directors

As of January 2007:

• K. Tucker Andersen, Senior consultant, Cumberland Associates LLC
• Frank Bond, Chairman, The Foundation Group
• Edward H. Crane, President, Cato Institute
• Richard Dennis, President, Dennis Trading Group
• Ethelmae C. Humphreys, Chair, Tamko Roofing Products, Inc.
• David H. Koch, Executive vice-president, Koch Industries, Inc.
• John C. Malone, Chairman, Liberty Media Corporation
• William A. Niskanen, Chairman, Cato Institute
• David H. Padden, President, Padden and Company
• Lewis E. Randall, Board member, E*TRADE Financial Corporation
• Howard Rich, President, U.S. Term Limits
• Frederick W. Smith, Chairman and CEO, FedEx Corporation
• Donald G. Smith, President, Donald Smith & Co.
• Jeffrey S. Yass, Managing Director, Susquehana International Group, LLP
• Fred Young, former owner, Young Radiator Company

Former staff and faculty

• Radley Balko, former Policy Analyst
• Doug Bandow, former Senior Fellow
• Clyde Wayne Crews, Jr. (Director of Technology Policy), currently Vice President for Policy at the Competitive Enterprise Institute
• Dan Greenberg (Director of Communications), currently an Arkansas state legislator and thus a member of the Arkansas General Assembly
• Terry Kibbe (Director of Development), currently Vice President for Development at the Competitive Enterprise Institute
• Thomas P. Miller (Director of Health Policy Studies), currently a healthcare policy scholar for the American Enterprise Institute
• Steven Milloy (adjunct scholar), columnist for Fox News
• Solveig Singleton (Director of Information Studies), currently Senior Adjunct Fellow at the Progress and Freedom Foundation [4]
• R.J. Smith (Director of Environmental Policy), currently Senior Fellow at the National Center for Public Policy Research
• Julian Sanchez, former staff writer, currently contributing editor to Reason magazine.

References

External links

• Cato Institute's official website
• Center for Trade Policy Studies
• Project on Social Security Choice
• Cato Unbound, Cato's online monthly magazine
• Milton Friedman Prize for Advancing Liberty
• Cato@Liberty blog
• Center for Global Liberty and Prosperity

Critiques

• Mike Huben, "Criticisms of the CATO Institute," in "Critiques Of Libertarianism."
• Lew Rockwel's Editorial on the Bandow/Abramoff controversy
• John Fonte, "Dogmatic Libertarians: Over the edge", National Review Online, May 9, 2002
• "The Cato Institute or Anarchism seen through the Multinationals’ Eyes", Voltaire Network
• Dana Milbank, "At Conservative Forum on Bush, Everybody's a Critic", Washington Post, March 8, 2006, p. A02
• "The Promise of Freedom: Is America on Course?" a debate with the Cato Instiute's Executive Vice President David Boaz
• ExxonSecrets.org Fact Sheet on Cato.
• Cato Institute profile at Sourcewatch.org

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