David R. Henderson  

Thomas Sowell on the Koch, Cato Controversy

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Why Oswald Rabbit Isn't as Famous as Mickey Mouse

In his book, Knowledge and Decisions, one of my favorite books he has written, Thomas Sowell, in a section on "The Physical Fallacy," writes:

A revealing episode in the early career of Walt Disney may illustrate the physical fallacy on a smaller and more human scale. Back in the 1920s, when Disney first emerged as a cartoonist, his early successes led him to found a studio and to employ other artists to draw the thousands of pictures required for animated cartoon movies. Disney Studios was particularly successful with an early cartoon character called Oswald Rabbit, whose copyright was held by a movie distributor rather than by Disney. This distributor decided to eliminate the need to pay Disney by hiring away his cartoonists and both producing and marketing the product. From the standpoint of the physical fallacy, Disney was superfluous. He neither drew the cartoons nor transported the films to theaters nor showed them to the public. The distributor, with the Disney staff and the copyright on Disney's character, expected to profit from his coup--but without Disney's ideas the previously valuable character suddenly became worthless as a money-maker at the box office. What had really been sold all along were Disney's ideas and fantasies. The physical things--the drawings, the film, and the theaters--were merely vehicles. It. was only a matter of time before another set of vehicles could be arranged and the ideas incorporated in a new character--Mickey Mouse--which Disney copyrighted in his own name.

I thought of this when reading David Friedman's comment on Arnold Kling's post this morning on Cato and the Kochs. David pointed out that what makes Cato what it is is not the building it occupies. If the Koch brothers succeed in their takeover, they will have a building and a number of copyrights. The analogy with the Oswald Rabbit story is not perfect because the movie distributor hired the talent too.

Some talent will probably stay with Cato and other talent could leave to a new organization with the same goals and modus operandi of the current Cato Institute. Of course, the name of the new organization would not be Cato. But in this age when it's so easy to get out the word, many people would see pretty quickly that the new organization is the old Cato that they liked.

Of course, there would be adjustment costs and I don't mean to minimize that problem. Also, just as I hate to see divorces between good people, I hate to see conflict between people I admire.


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COMMENTS (6 to date)
RPLong writes:

The name of the new organization would probably be something along the lines of "The Ludwig von Mises Organization" or something... just guessing...

Rick Hull writes:

It's also disheartening to consider the institutional reputation, which will be completely squandered and not easily rebuilt.

Henry writes:

That reminds me of an episode of The Simpsons where an old bum who created "Itchy and Scratchy" (a Tom and Jerry parody) successfully sued for $800 billion. I always thought that the vast majority of that was value added by the company, and that just compensation would be a tiny fraction of that.

Jim Glass writes:

Oswald Rabbit returned to Disney in one of the more unique trades of the sports world.

"In February 2006, Disney CEO Bob Iger initiated a trade with NBC Universal in which a number of minor assets including the rights to Oswald were acquired by The Walt Disney Company in exchange for sending sportscaster Al Michaels from Disney's ABC and ESPN to NBC Sports."

-- Wikipedia

Tom Lee writes:

The wonderful Disney anecdote reminds me of Bradley Manning, held illegally for over a year for being a whisteblower in the WikiLeaks case. Often stripped naked and held in solitary confinement, Manning suffered mightily without being convicted of anything. When asked about the situation, President Obama said of the Army private, "he broke the law" apparently unaware that the law also applies to him and the government he heads. But the Government is making the physical fallacy, thinking that it can snuff out constitutional rights merely by cruel, lawless behavior. It thinks it can demolish freedom merely by confining and mistreating one person's body. Freedom is much bigger and bolder and invincible than that.

David R. Henderson writes:

@Tom Lee,
But the Government is making the physical fallacy, thinking that it can snuff out constitutional rights merely by cruel, lawless behavior. It thinks it can demolish freedom merely by confining and mistreating one person's body. Freedom is much bigger and bolder and invincible than that.
I don’t agree. I think Obama snuffed out a lot of freedom, as did Bush. I think this is a substantially less free country than it was on September 10, 2001.

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