When Murray Rothbard Blew His Top

From Justin Raimondo's review of Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty:

[T]he economist Murray Rothbard, the intellectual progenitor of modern libertarianism and the ideological polestar of the Ron Paul phenomenon...like Charles [Koch], was not content to sit around theorizing. At a seminal meeting at a ski lodge in Vail, Colorado, in the winter of 1976, the two discussed what course to take—and what came to be known as the “Kochtopus” was born.

Rothbard wrote a lengthy memo outlining an ambitious plan that would come to fruition with the injection of a large amount of Koch funding. There would be a think tank, a magazine, a campus group, seminars and grants for promising libertarian scholars—all of which came to pass in the form of the Cato Institute; Inquiry, a biweekly directed at the left; a movement magazine, Libertarian Review; and a campus group dubbed Students for a Libertarian Society (SLS).

To manage this operation, Charles and Rothbard recruited Edward H. Crane III, a young financial consultant and stockbroker whose tenure as head of the barely four-year-old Libertarian Party had demonstrated rare organizational abilities. A four-story glass-and-steel building at the foot of San Francisco’s Telegraph Hill was secured to house Cato, while across the street the ancillary organizations—SLS, Libertarian Review, and the Libertarian Party—took up residence in a converted warehouse.

From the first months of 1977 to the summer of 1979, Cato was the epicenter of a veritable hive of libertarian activism. When Ed Clark, an oil executive, garnered 5.5 percent of the vote as the Libertarian Party candidate for California governor in 1978, the buzzing got louder. As the 1980 presidential election loomed, with Clark poised to carry the Libertarian banner, expectations were high. Charles kept a close eye on all this, conferring with Crane on a daily basis.

This activity reached a crescendo at the 1979 Libertarian Party convention, held in Los Angeles’s Bonaventure Hotel, where Clark was nominated for president with David Koch as his running mate. The presence of a Koch on the ticket was openly explained as a way to get around campaign-finance laws, which favored the major parties by limiting campaign contributions and thus ensuring that no third party could challenge the duopoly.

What happened next was a tragedy brought about by the failure of Charles to apply his own Market-Based Management (MBM) principles to the task he was undertaking. Far from the decentralized decision-making advocated in The Science of Success, the Clark campaign was run from the top down by Ed Crane. Another principle of MBM is integrity, which Koch defines as an essential element of “principled entrepreneurship.” This too was thrown by the wayside as Crane insisted on watering down the libertarian message. The final straw was Clark’s interview with Ted Koppel on “Nightline,” where he explained that libertarianism is really “low-tax liberalism.”

Rothbard blew his top. From that point on, a factional war erupted within the Kochtopus. It didn’t end until the 1983 national Libertarian Party convention, where “Boss Crane” was narrowly defeated and the “Crane Machine” walked out of the party en masse. Cato, under Crane’s leadership, hightailed it to Washington, D.C., eager to put as much physical and ideological distance as possible between the “respectable radicalism,” as Crane put it, of the Koch-funded wing and the unmanageable libertarian grassroots. At a special meeting of the Cato board, Rothbard was summarily kicked out.

“The proper epitaph for the Clark campaign,” Rothbard pithily summed up, “is this: And they didn’t even get the votes!” Libertarian principle had been traduced, the party platform ignored, and still Clark received less than 1 percent, not even breaking one million votes.

Read the full review here.



(ht Michael Edelstein)