The Cato Institute is committed to being a libertarian think tank: individual liberty, limited government, free markets, and peace. But one thing that’s often misunderstood is that Cato as such does not take institutional positions on particular policy questions. Cato scholars speak for themselves and have the freedom to reach their own conclusions, particularly on things that are contested among libertarians.
Recently there was an example of this as two Cato scholars appeared in major media to articulate their differing views on vaccines and how to apply libertarian principles in the context of the COVID-19 pandemic. One of our senior fellows, Todd Zywicki, wrote in the Wall Street Journal on August 6 to explain why he is suing George Mason University, where he is a law professor, over their policy requiring COVID-19 vaccination. In particular, he objects to the application of the policy to people like him who have already had and recovered from COVID, and thus already have some degree of natural immunity.
Another Cato adjunct scholar, also a George Mason law professor, Ilya Somin, appeared on MSNBC on August 11 to discuss why he sees vaccine requirements as potentially justified and preferable to other policy options. Drawing on libertarian principles, he made the case that a disease like COVID involves the potential of harm to other people. Somin pointed out that mask mandates, lockdowns, and restrictions on international travel are all much more intrusive than the relatively slight imposition of a safe and effective vaccine. There is a particularly strong libertarian case that private institutions, and even the government when acting as employer, can set policies attached to what are voluntary relationships: employees, customers, students, and the like. Florida’s recent attempt to ban private businesses such as cruise lines from adopting vaccine requirements has already suffered defeat in court and is one example of an affront to libertarian sensibilities.
In this case as on other issues, we don’t require uniformity or suppress differing views among our scholars. And any one scholar’s individual view is not necessarily “Cato’s position” on a matter. That diversity of viewpoints and intellectual freedom is part of why Cato has been able to provide an effective voice for classical liberal and libertarian ideas across the entire range of public policy issues. The standards we uphold are for intellectual rigor and solid grounding in good data, especially for work Cato publishes. Our scholars also frequently write, publish, and engage in advocacy outside of Cato, which we happily encourage. It’s that reputation for intellectual honesty and serious engagement with opposing points of view which has helped put Cato routinely near the top of rankings of America’s most influential think tanks, making a difference for freedom in state capitals, on Capitol Hill, and at the Supreme Court, where Cato’s renowned amicus program is tied with the ACLU at the top of the rankings for filing on the winning side of major policy cases.
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The Nixon Shock and the Libertarians
On August 15, 1971, President Richard Nixon went on television and announced a three-part New Economic Policy supposedly intended to stop inflation and increase economic growth. By executive order he would “close the gold window,” thus preventing foreign nations from exchanging U.S. dollars for U.S. gold; impose a 10 percent surcharge on imports; and order a freeze on wages and prices. Public reaction was good, and the Dow Jones Average rose the next day. The New York Times editorialized that “we unhesitatingly applaud the boldness with which the President has moved on all economic fronts.”
The few libertarians at the time had a different reaction. Milton Friedman wrote in his Newsweek column that the price controls “will end as all previous attempts to freeze prices and wages have ended, from the time of the Roman emperor Diocletian to the present, in utter failure.” Ayn Rand gave a lecture about the program titled “The Moratorium on Brains” and denounced it in her newsletter. Alan Reynolds, now a Cato senior fellow, wrote in National Review that wage and price controls were “tyranny … necessarily selective and discriminatory” and unworkable. Murray Rothbard declared in the New York Times that on August 15 “fascism came to America” and that the promise to control prices was “a fraud and a hoax” given that it was accompanied by a tariff increase.
Some libertarians who were gathered that night at the Denver home of David and Sue Nolan decided that Nixon’s announcement was the last straw: it was time to form a new political party. In meetings over the next 10 months they created the Libertarian Party and nominated a presidential ticket. One of the attendees at the first convention, in June 1972, was Ed Clark, a free-market, antiwar lawyer who had decided to leave the Republican Party after Nixon’s speech. He soon became a member of the fledgling Libertarian Party and in 1980 became its most successful presidential candidate to that date.
Much has been said about the economic effects of the Nixon shock. Lew Lehrman wrote in the Wall Street Journal in 2011, “The “Nixon Shock” was followed by a decade of one of the worst inflations of American history and the most stagnant economy since the Great Depression. The price of gold rose to $800 from $35. The purchasing power of a dollar saved in 1971 under Nixon has today fallen to 18 pennies. Nixon’s new economic policy sowed chaos for a decade.” There were intermittent gasoline shortages and lines until Ronald Reagan removed the price controls on oil. David Stockman told me in 1979, when I was new to the policy world, that closing the gold window had been the worst policy decision since he came to Washington. We’re still paying the price for the unleashing of inflation.
But I suppose there were a couple of positive outcomes from Nixon’s very bad decision: the creation of a stronger libertarian movement, and the fact that nobody has seriously proposed wage and price controls since.
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Yes, We Should Focus on Peace in Education
Over just the last 24 hours, I have seen several videos of rage and recrimination at school board meetings, including a mob screaming at and threatening people who had just testified for mask mandates in Williamson County, Tennessee (video below) and this meltdown in North Penn, Pennsylvania. These painful videos join this June brouhaha in Loudoun County, VA, and many other anger-soaked meetings over the last year or so.
It is hard to watch these often-incensed exchanges and be anything but saddened at neighbor pitted against neighbor.
Recently, Robert Pondiscio at the American Enterprise Institute has been highly critical of something I emphasize about school choice: it offers more peaceful coexistence among diverse people than does public schooling. Instead of forcing one answer on everyone, which is the crux of the wrenching scenes we see playing out across the country, choice enables people to pursue what they think is right – masking or no masking, critical race theory or no critical race theory – without having to impose it on, or deny it to, those who disagree.
In a piece last week, Pondiscio framed this argument as saying “public education sucks,” and even wrote, oddly, that the message seems to be pulled “from a mob movie: ‘You’ve got a nice family. It’d be a shame if anything were to happen to ‘em.’”
Part of Pondiscio’s complaint is that saying people should be able to avoid imposition of ideas they find unacceptable is basically the only argument choice advocates like me make, and that it is an unsatisfying—or maybe just too pacifistic?—retreat from societal debates. Whether Pondiscio is concerned about pacifism is unclear because he both laments people going to their “side of the river,” but also “hoping the other guy stays on his.” Is the problem disengagement itself, or that other people will keep trying to force things on you whether you like it or not, so your only real choice is to stay in the war and vanquish them?
Pondiscio is wrong that choice-as-peacemaker is the only argument people like me make for school choice. He apparently has not read School Choice Myths, edited by me and Corey DeAngelis, which offers all sorts of arguments for choice, including that it creates better citizens, empowers families of children with disabilities, helps taxpayers, and as my own chapter discusses, holds the key to building lasting togetherness. He also might have missed my post from January about the power of choice to provide more progressive schools, not to mention my writing on choice as key to equality under the law.
That said, Cato’s Center for Educational Freedom has long run the Public Schooling Battle Map, to which Pondiscio gives a nice shout-out, and I have certainly emphasized choice-as-peacemaker over the last several months. But the recent emphasis is because our public schooling battles have reached a fever pitch over the last year or so, including over critical race theory, transgender student athletes, and, most recently, mask mandates.
When there is war, it is natural for at least some people to focus on avenues for peace…thankfully.
Of course, nothing about school choice says if you get it you have to be silent about things you do not like. No one requires that you have kids enrolled in public schools to join a protest, write letters to the editor, or just share political opinions with your neighbors. Heck, you can even join Twitter without having public school kids!
What choice does is lower the stakes on intensely personal and controversial issues because, unlike public schooling, it is not winner-take-all. Indeed, the stakes on something like mask mandates, in which schools either require all kids to wear masks or not—they cannot do both—can be seen as nothing less than children’s lives. As a school board member in Norman, Oklahoma, said a few nights ago as she pleaded to implement a mask mandate in violation of state law, “It’s just not okay for kids to commit murder for coming to school without a mask.”
Notably, many countries have implemented choice for peace, allowing people to select schools in order to defuse sometimes centuries of religious, social, and political warfare. And it has frequently worked.
Peace is not the only argument I or anyone else makes for school choice – indeed, peace stems from liberty, which is the ultimate value I argue for – but peace is important, especially now, and I will not stop pushing for it.
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Peace through School Choice: Examining the Evidence
March 22, 2022 • 12 - 1:30 PM EDT
Public schooling, by forcing people with diverse values and needs to fund a single system of government schools, inevitably produces conflict. Such conflict has reached a fever pitch over the last several years, with Americans battling over critical race theory, LGBTQ issues, COVID-19 masking, and more. Logically, school choice would defuse such conflict, enabling diverse people to choose what they think is best rather than having to fight for control of a single system. But is there evidence of that working? If so, where? And how does that not lead to Balkanization?
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No, President Biden, Climate Policy Isn’t a Free Lunch
In an interview with John Kerry—President Biden’s point-man on climate change diplomacy—the New Yorker’s David Remnick asked the following crucial question:
One of the main difficulties, and there are so many, is that the climate demands sacrifice of everyone to avert catastrophe. Yet we are told we can save the planet and grow the economy at the same time. Transitioning to renewables is going to cost trillions of dollars and upend huge industries. We’re likely to have to eat less meat, use more public transportation. All of this is necessary. To what degree are you and Joe Biden and your foreign counterparts really levelling with everybody?
Here, Remnick channels the obvious: Climate change mitigation is hard. Every act of economic production requires an energy input, and energy production everywhere is a function of fossil fuel combustion, which causes global warming. The upshot is that mitigating climate change requires a wholesale overhaul of the global economy. As Remnick rightly observes, “[t]ransitioning to renewables is going to cost trillions of dollars and upend huge industries.”
Kerry, however, rejected the rock-solid reasoning behind Remnick’s question, answering:
We’re being completely direct and totally transparent. I don’t agree with you that this is sacrifice. I do not believe people will have to necessarily eat differently. Agriculture will change. There’s a lot of research and work being done now on the diet of cattle, for instance. There’s a thing called asparagopsis—I believe that’s the right name—which is a seaweed that, apparently, in its early trials, has reduced if not eliminated flatulence from cattle. I’m confident that there will be huge research done that will change some of these things. All of the economic analyses show that there are millions of jobs to be created.
In the United States, we need to build a legitimate [electrical] grid. We can go to the moon, we can direct a Rover on Mars from Earth, we can invent vaccines, but we can’t send a simple electron from California to New York? In building that smart grid, you will put electricians and plumbers and pipefitters and steelworkers and heavy-equipment operators and countless disciplines to work. There’s so many exciting parts of this. Cars will be electric. They won’t have an internal-combustion engine, but you’re still going to have workers, the United Auto Workers, producing those cars. I just think we’re looking at a remarkable transformation. This will be the biggest economic transformation since the Industrial Revolution, literally. (formatting added)
Kerry, therefore, denies that climate policy involves individual sacrifice. To the contrary, he says that climate policy will “create” millions of jobs, by which he implies that government regulation would (somehow) create wealth. His answer supposes that no one has to pay anything to reduce greenhouse gas emissions, because we’ll all be getting rich from our green jobs and free energy (or something).
Rather than parsing Kerry’s non-answer with follow up questions, Remnick immediately dropped this line of inquiry. Still, the exchange is revealing, in that Kerry’s response reflects the official position of the Biden administration—that Americans can have their climate cake and eat it, too. Last Earth Day, the president described climate regulation as both “a moral imperative” and “an economic imperative.” In a speech last week, Biden gushed that “when I hear ‘climate,’ I think ‘jobs’—good-paying union jobs.”
Seen in the most positive light, the Biden administration is engaging in wishful thinking. Seen in the worst light, this is cynical propaganda. Either way, the ramifications are troubling.
For starters, can President Biden lead on climate policy if he buries his head in the sand about the costs? Yesterday, for example, the White House sought for OPEC to ramp up oil production in an effort to ensure “Americans have access to affordable and reliable energy … at the pump” But this call to OPEC doesn’t make any sense from a climate perspective. High gas prices are a global warming “solution” because they reduce consumption, which lowers greenhouse gas emissions. The president’s messaging—that Americans should have cheap gas—stands diametrically opposed to his climate goals. This glaring contradiction cannot be lost on the rest of the world as Biden calls for international action on global warming.
Another worry pertains to executive authority. President Biden has established sweeping climate goals for his regulators, including the decarbonization of the electric grid by 2035 and the electrification of half the auto fleet by 2030. To meet these goals, the Biden administration asserts vast unilateral powers, based on expansive interpretations of laws that are already on the books. Along these lines, it’s a lot easier to justify a gross expansion of presidential power if one simply pretends that costs don’t exist.
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If FDA Won’t Rethink Rules on Off-Label Drug Use, Courts Should
As Cato writers have long pointed out, the law takes a paradoxical stance toward so-called “off-label” use of drugs approved for use by the Food and Drug Administration (FDA). On the one hand, it’s completely lawful for physicians to prescribe approved drugs for other than the FDA-approved uses, and such uses are vital in everyday practice. Indeed, off-label compounds often constitute a “gold standard” of care in chemotherapy cancer treatments and other fields of medicine. On the other hand, the agency strictly prohibits makers of the compounds from promoting such use, even when the result, as Christina Sandefur argued in Regulation in 2017, is to bar manufacturers from uttering information that may be truthful, in no way exaggerated or misleading, and critically important to patient welfare. This latter prohibition is in tension with Supreme Court holdings on the First Amendment’s application to commercial speech. In the 2012 case of U.S. v. Caronia, a Second Circuit panel concluded “that the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” But other circuits have taken a different view, and the FDA itself dodged the ruling’s impact by deciding to treat truthful promotion as evidence of a different statutory offense, “misbranding.”
Now a case before the First Circuit, U.S. v. Facteau, is raising some of the same issues once again. To quote the Washington Legal Foundation, defendant executives Bill Facteau and Patrick Fabian “were convicted of misdemeanor adulteration and misbranding under the FDCA for distributing a medical device for an ‘off-label’ use. At trial, however, the jury found that no defendant made false or misleading statements, nor had any intent to defraud or mislead, and so acquitted on all charges requiring mens rea.” WLF has filed an amicus brief urging the circuit panel to find the agency’s application of the misbranding and adulteration rules to truthful, non-misleading speech a First Amendment violation under strict or even intermediate scrutiny.
An interesting sidelight: in the case under appeal, U.S. District Judge Allison D. Burroughs, while ultimately rejecting the defendants’ arguments for acquittal, raised the question of whether Congress even intended to use the misbranding and adulteration statutes to criminalize truthful statements. “Where a conviction can result in exclusion from healthcare programs, likely a death knell for any company, it is also important for the regulatory and law enforcement regime to clearly spell out what is and is not prohibited conduct.”
Off-label compounds that have been widely reported helpful in treating at least some stages of COVID-19 disease include monoclonal antibodies, dexamethasone, and remdesivir.
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Sex Scandal May Derail AirTrain
In 2004, a sex scandal led the Portland media to reveal to people that the city was run by a light-rail mafia. Since then, I’ve told people in other cities that, if their region builds rail transit, they better hope for a sex scandal so they can find out where their money went.
Artist’s conception of proposed LaGuardia AirTrain provided courtesy of the office of the soon-to-be ex-governor.
New York City residents are lucky: a sex scandal there may derail a wasteful 2‑mile-long “people mover” (automated guideway) project that I critiqued a year ago, noting that it “will cost $2 billion, make traffic congestion worse, dump 87,000 metric tons of greenhouse gases into the atmosphere, and probably isn’t necessary due to the pandemic.” The project was supported by Governor Andrew Cuomo, who this week agreed to resign due to sexual harassment claims.
Cuomo’s imminent departure has made it safe for project opponents within the Port Authority of New York and New Jersey, which would have built the project, to publicly raise their objections to it. Less than six hours after Cuomo’s announcement, dozens of Port Authority staffers signed a letter sent to the agency director asking him to kill the project.
“For too long, Gov. Cuomo and his staff have repeatedly pushed the agency to make non-transparent, politically motivated decisions, including decisions that squander the trust and money of our bondholders, customers, and the general public,” said the letter. The letter suggested that Cuomo had exerted “undue influence” to get Port Authority planners to “manipulate the federally-mandated Environmental Impact Statement [EIS] process” to favor the project over alternatives including bus-rapid transit or extending an existing subway line so passengers wouldn’t be forced to change trains.
Based on the EIS, the Federal Transit Administration agreed to help fund the people mover last month. But the authors of the letter (who asked to remain anonymous until Cuomo has left office) call into question that document’s reliability. For example, the EIS estimated that, if the people mover is built, it would increase transit’s share of travel to the airport from 6 to 10 percent, a number that is especially questionable considering the pandemic’s affect on peoples’ willingness to ride transit.
Even without knowing about possible manipulation of the data, my reading of the environmental impact statement revealed the project was inane. The EIS admitted that, even with the projected increase in transit usage, traffic congestion around the airport would increase if the project is built. Since congestion relief was supposed to be the biggest goal of the project, that should have been enough to kill it.
Thanks to Cuomo’s planned resignation, New York City has a chance to save taxpayers $2 billion or more on a wasteful and irksome project. Too bad taxpayers in Portland and other light-rail cities didn’t have the same opportunity.
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Is Orban Protecting Hungary from Libertarianism?
Tucker Carlson spent a week in Hungary extolling the accomplishments of Viktor Orban, the proud father of “illiberal democracy.” In an earlier edition of his show, Carlson had praised Orban for not “abandoning Hungary’s young people to the hard-edged libertarianism of Soros and the Clinton Foundation.”
Absurd, right? George Soros and the Clinton Foundation libertarian, much less “hard-edged” libertarians? Hardly.
And we might just have a laugh and leave it there. But maybe there’s a deeper sense in which Carlson has a point.
Libertarianism may be regarded as a political philosophy that applies the foundational ideas of liberalism consistently, following liberal arguments to conclusions that would limit the role of government more strictly and protect individual freedom more fully than other classical liberals would. But modern liberals such as Soros and Bill Clinton share a lot of those basic ideas with libertarians.
As Fareed Zakaria wrote about the success of libertarians,
They are heirs to a tradition that has changed the world. Consider what classical liberalism stood for in the beginning of the nineteenth century. It was against the power of the church and for the power of the market; it was against the privileges of kings and aristocracies and for dignity of the middle class; it was against a society dominated by status and land and in favor of one based on markets and merit; it was opposed to religion and custom and in favor of science and secularism; it was for national self-determination and against empires; it was for freedom of speech and against censorship; it was for free trade and against mercantilism. Above all, it was for the rights of the individual and against the power of the church and the state.
In all those ways libertarians and other liberals changed the Western world and increasingly the entire world. Today libertarians, liberals such as Soros and Clinton, and conservatives such as Mitt Romney and Boris Johnson agree on such basic liberal principles as private property, markets, free trade, the rule of law, government by consent of the governed, constitutionalism, free speech, free press, religious freedom, women’s rights, gay rights, peace, and a generally free and open society. Not without plenty of arguments, of course, over the scope of government and the rights of individuals, from taxes and the welfare state to drug prohibition and war. But as Brian Doherty wrote in Radicals for Capitalism, his history of the libertarian movement, we live in a liberal world that “runs on approximately libertarian principles, with a general belief in property rights and the benefits of liberty.”
So one might say that with all the differences libertarians have with Soros—who has been the target of anti-Semitic campaigning by Orban—or with the Clinton Foundation, they are at least more liberal than Orban’s “illiberal state” modeled on the successes of Russia, China, and Turkey, a regime that is shutting down universities, taking over media, suspending parliament, chipping away at democracy, and undermining the rule of law.
And in that sense, while Soros and the Clinton Foundation are hardly libertarian, much less “hard-edged” libertarians, their conflict with the Orban regime does involve issues fundamental to the conflict between libertarianism and authoritarianism.
