On Following the Money

Thomas Frank writes in the Wall Street Journal,

Consider the poor Washington libertarian. Everywhere else in America his type is an exotic species, a coffee-shop heretic who quotes from “Atlas Shrugged” and steers every conversation toward Ron Paul or gold. Take him or leave him, he doesn’t care. He is his own master.

Not so the Beltway variety. Here, in the very home of the taxing, regulating leviathan, the libertarian is such a commonplace and unremarkable bird that no one gives him a second glance. Here he is a factotum of the establishment, a tiny voice in a vast choir assembled by business and its tax-exempt front groups to sing the virtues of the entrepreneur.

And therein lies his dilemma. Almost by definition, our young libertarian’s job is to celebrate the profit motive from the offices of a not-for-profit organization. He is subsidized, in other words, to hymn the unsubsidized way of life. Rugged individualism may be his creed, but a rugged individual he ain’t.

This is more than just an abstract problem, as I discovered last week at a panel discussion hosted by America’s Future Foundation, one of the lesser libertarian nonprofits in the city. The questions that night were whether nonprofit work constitutes a “real job” and if moving to the private sector was “selling out” — ideas well known to any liberal do-gooder.

No, let’s not consider the beltway libertarian. Or at least, let’s not consider him all alone. Instead, let’s look at a couple of money trails. Here’s the first one:

1. Consumers buy products because they want or need them.

2. An entrepreneur, who has supplied these products, collects the money, which the consumer has given of his own free will.

3. The entrepreneur gives some of this money to his investors, some to his employees, and some he keeps for himself as a just reward.

4. The entrepreneur, his investors, or his employees give a portion of that money to a libertarian think tank like the Cato Institute. (Nearly all of Cato’s money comes from individual donors, not corporations or foundations.)

5. I work for the Cato Institute, and it pays me a salary.

There’s something remarkable about this money trail: every step is voluntary. Every step is the product of a private, individual decision. None of them are coerced.

Maybe I don’t live on the shores of Walden Pond. But it’s still hard to see how my individualism has been compromised. I might easily change my career direction; my boss might decide he doesn’t need my services; the donors might get fed up with Cato and stop giving; the entrepreneur might liquidate his business; the consumers might stop buying the products. At every point in the chain, the individual is in charge, and the same would be true if my own place in the chain were at position #3 rather than position #5. Either way, it’s all voluntary, and my libertarian conscience is clean.

Yes, yes, I might make more money elsewhere. But money is just one dimension of personal satisfaction. Although money is important, other values are worthwhile too. There’s nothing wrong about wanting a job that is personally satisfying, or that is intellectually stimulating, or that furthers your vision of the good. A libertarian appreciates the value and purpose of money (possibly more than most), but he’s allowed to have other values, too. It’s only cartoon plutocrats who refuse to care about anything else.

Now let’s look at another money trail. I have a hard time thinking it’s the better one:

1. The government takes your money in taxes. If you don’t pay, you’ll find an unscheduled appointment on your agenda, possibly involving men with guns.

2. The government turns this money over to “nonprofits.” Or perhaps to plain old profit-seeking corporations.

Bit of a difference there, isn’t it?

Cato does not accept any government money, and if it ever does, I suspect that many of us will exercise our voluntary choice and leave the organization. This is the money trail that libertarians should — and do — reject. Once again, my conscience is clean. This is also why Frank gets it wrong when he writes,

Private-sector Washington is one of the wealthiest places in America. Public-service Washington lags considerably behind. The chance of ditching the one for the other is what accounts for everything from the power of K Street to the infamous “revolving door,” by which a public servant takes a cushy corporate job after engineering some extravagant government favor for the corporation in question — or its clients.

The libertarian nonprofits that line the city’s streets often serve merely to rationalize this operation after the fact, giving a pious shine to the policies that are made in this unholy manner.

I don’t deny that it happens. But I do deny that these people are libertarians, whatever they happen to call themselves. One thing that separates the Cato Institute from many other public policy shops is that it has been perhaps the loudest in denouncing exactly these sorts of abuses. Here’s hoping we keep at it.