Arnold Kling  

Another Take on the Soap Opera

PRINT
The Age of Contestability... Serfdom Watch...

Will Wilkinson writes,


this isn't a battle between good and evil, and the stakes are probably lower than you think.

Not unlike my take, although he has more inside knowledge than I do. Read the whole thing.

I have a high regard for the scholars at Cato who are suffering through this soap opera. However, if they had asked me for advice, I would not have taken the approach of making a public attack on the Kochs' motives.

Neither the Kochs nor anyone else in the libertarian movement is as well-funded and powerfully positioned as the apparatus of the state. Neither the Kochs nor anyone else in the libertarian movement is as ruthlessly self-interested and manipulative as the public employee unions or the crony capitalists lined up for their bailouts and green energy subsidies.

Instead, I would have focused on the relationship between funding and control. As I understand it, the Kochs are seeking total control over the Cato board, even though they currently provide a relatively small share of Cato's funding (from what I hear, less than 5 percent). This discrepancy would threaten to alienate the rest of the donor base, regardless of the motives involved.

The appropriate battle is between the Kochs and the non-Koch donors. I don't think that Cato staff should be involved in the fight. If it's anyone's responsibility to keep them out of it, I would say that it's Ed Crane's, regardless of whether you prefer a Crane slate to a Koch slate of board members.

This showdown could have taken place earlier, when the Kochs first began to exert muscle on the Board that was disproportionate to their level of financial support. The non-Koch donors and the highest executives (again, not the staff, this is not their job) could have insisted that the Cato shareholder agreement be reconstituted to create a truly representative board. If the non-Koch donors could use neither persuasion nor legal measures to obtain such a result, then their ultimate resort is to walk and form a new organization.

I generally prefer exit to voice. That goes for this instance as well.


Comments and Sharing





COMMENTS (10 to date)
Becky Hargrove writes:

In any event, new definitions of what it means to be libertarian are on the horizon, as solutions beyond both money and government become utilized.

Jeff writes:
If the non-Koch donors could use neither persuasion nor legal measures to obtain such a result, then their ultimate resort is to walk and form a new organization.

True as far as it goes, but that's a little easier said than done, no? Haven't they been in the midst of a big capital campaign to renovate and expand their building the last year or two? That's a lot of money and energy expended to just walk away from. I'd be a little upset if I was in their position, as well.

steve writes:

"Neither the Kochs nor anyone else in the libertarian movement is as ruthlessly self-interested and manipulative as the public employee unions or the crony capitalists lined up for their bailouts and green energy subsidies."

Bias, or do you have proof of this? Are you implying that self-interest is bad?

Steve

chipotle writes:
I generally prefer exit to voice. That goes for this instance as well.

Dr. Kling's final line above is a concise summation of the upshot of the rest of the post.

However, it is a reductio ad absurdum of his position on many issues, of which this is one of the least important. It reflects Kling's deep distrust of "popularity contests" or, if you prefer, "democratic decision-making."

In a case like this, though, there is a big place for voice: voice gives life to the work that is constitutive of the entity that is being fought over. What kind of place is Cato? What sort of work do they do on a day-to-day basis? The only way to resolve this is voice.

Kling's faulty conclusion rests on the implicit assumption that any significantly large conflict is a sign that there is a less harmful resolution available. I flatly disagree.

What happened here is pretty plain: a pretty bizarre contract led to pretty bizarre structure of control. Successful operating norms arose in spite of a loopy set of printed-on-paper bylaws.

Now, to oversimplify, there seems to be a conflict over the letter of the contract (the Kochs' position) and its "spirit" or, if you prefer, its prior reality for 27 or so years (Crane and Levy's position).

Kling is also mistaken when he says that the staff should not be involved in the fight.

Why in heaven's name not? It is their day-to-day work and not the awesome glass cube or the spiffy-looking letterhead that actually is the Cato Institute. If they go quietly, they implicitly assent to what is going on at the highest levels. This way, they would force Koch Industries to pay a high price for the takeover of Cato. (E.g., the Cato that the Kochs would "win" would be stripped of its non-partisan or bipartisan credibility.) They--the work-a-day scholars, the "human capital"-- hold the cards.

Bottom line: Dr. Kling's conflict aversion is like Bryan Caplan's pacificism--a wise idea stretched beyond the limits of its usefulness.

David Friedman writes:

"If the non-Koch donors could use neither persuasion nor legal measures to obtain such a result, then their ultimate resort is to walk and form a new organization."

That was my reaction to the situation as well. The Kochs are apparently not at this point major donors, and I gather Cato runs on current donations, not on any sizable endowment. If the Kochs take control and use it for bad purposes, the present staff and donors can simply move. They would have to leave behind a fancy new building, but the building isn't what makes Cato important.

I suppose labeling the replacement "Cato Government in Exile" would be a bit extreme.

Becky Hargrove writes:

i'm sure i'm one of many who would start a new place with you any day! Most of us require very little food and upkeep...

Charles H writes:

I do not think exit is a viable option in this case, exit to where? There are limited exit options available. I think that Arnold's view also does not sufficiently account for loyalty; the interplay between limited exit and loyalty lead to the use of voice, the way I see it.

Becky Hargrove writes:

The only reason good exit options don't exist (in all of life's circumstances) is because they have not been created yet. For instance, instead of fighting the inevitable when a city is 'full' (rents too high) make new cities where people can live and start again from more affordable and sustainable settings.

Loyalty is one of the highest values, but think what happens when vital decisions have to be made where someone wins and someone loses. The fact that someone has to 'lose' means they become invisible in a sense. To stay visible, we have to get on with our lives even if it means leaving friends behind in order to continue with our lifes' greatest challenges. The longer we try to remain loyal in the compromised circumstances, the harder it becomes to maintain self respect. The person for whom loyalty is the highest regard might also be the person who would be most inclined to kill a mate should they stray too far from the accepted norm. To be sure this is a matter of honor, even if it is illegal.

James writes:

Even if the entire libertarian essay industry were to collapse starting with Cato, the adverse effect on human freedom would be small compared. Seriously, what is the value of the marginal libertarian whitepaper?*

As a libertarian, I'm far more bothered by the fact that that there are basically no organizations where the members focus their energies on developing cost effective ways that individuals can protect themselves from their governments.

* I enjoy reading libertarian essays as much as anyone, but I suspect most of the folks at Cato would say their goal is to increase human freedom. Less than 1% would say that their primary agenda is to provide a niche genre of nonfiction.

Tom McKendree writes:

Facetiously, you've persuaded me to root for the Koch's to take over Cato, just so the other donors can create a new organization, presumably with a big helping of the original staff, and that new organization can be called Cato the Younger.

Comments for this entry have been closed
Return to top