From the early 1970s though 2005, I was a loyal member of the Republican Party and the libertarian wing of the conservative movement. When I signed on in the ’70s, the movement was very small; it was possible to know everyone in Washington who was a significant player. And I knew almost all of them, some even from college.
One of my college mates was Richard Fink. We were both undergraduates at Rutgers, I in New Brunswick and Rich at the Newark campus. We bonded over our mutual interest in Austrian economics, the extremely doctrinaire and influential school of thought that claimed Friedrich Hayek and Ludwig von Mises among its best-known thinkers. Like those figures, Rich and I shared a near-missionary zeal for pure laissez-faire capitalism.
Back then, there were almost no adherents of the Austrian school teaching at American universities, but one was Walter Grinder, an economics professor at Rutgers-Newark, where he had assembled a small group of like-minded students, including Rich. Somehow I heard about Walter, made contact with him, and became connected with his students.
After Rutgers, Rich went off to UCLA to study economics, while I moved to Washington to study history at Georgetown. Eventually, Rich settled in the Washington area at George Mason University in the Virginia suburbs, where he was attracted to the administrative side of academic life. He was particularly adept at fund-raising, and helped build George Mason’s economics department into one of the top free-market-oriented programs in the United States.
My first real job out of Georgetown was working for Ron Paul in 1976. He was a newly elected congressman from Texas who was also an enthusiast of the Austrian school. I remember meeting the billionaire Charles Koch that year at a Libertarian Party event in Washington. I was pleased that he was familiar with my work. A few years later, I met his brother David when he was the Libertarian Party’s vice-presidential nominee. Although still a Republican, I helped the Libertarian Party with speechwriting and other minor chores.
At one point, I was recruited into the Koch operation. Charles had an idea for a libertarian businessmen’s organization tentatively called Business Leaders Against Subsidies and Tariffs (BLAST), and I was supposed to run it. Its true purpose was to identify rich businessmen who could then be tapped for other libertarian projects. I decided to stay on Capitol Hill, however, and from that vantage, I saw the organization develop into something called the Competitive Enterprise Institute—a “think tank,” in the loosest sense of the term, best known today for its opposition to the idea of global warming and for advancing the agenda of corporate America. The Club for Growth, another Koch-funded operation, was founded by the economist Stephen Moore in 1999 to identify and recruit rich businessmen to back other libertarian initiatives—as well as to mount primary challenges to incumbent Republicans who bucked laissez-faire orthodoxy. (Among other things, the Club for Growth has given us the purist coinage RINO—“Republican in Name Only”—which has been known to strike terror into the hearts of GOP lawmakers seeking reelection.)
I mention all this because I remember being at a George Mason conference in 1984 with Rich. He confided to me that he was leaving the university to start a new organization—he didn’t say what the group would be, but I suspected that it was Koch-related. I advised him not to do it, because my experiences with the Kochs suggested that they couldn’t be depended on for long-term support. They would provide seed money, and that’s all. I remember him giving me a very strange look when I said this. Soon thereafter, I heard that Rich was the first head of Citizens for a Sound Economy (CSE), which was indeed a Koch operation. The chairman was my old boss Ron Paul.
Like me, Jeff Nesbit is a former foot soldier in the libertarian Koch army who has since moved away from it. We are rare. Once people are installed inside the “Kochtopus”—an unflattering term that has been around for at least thirty-five years—they tend not to leave. The Kochs pay very well, are obsessed with personal loyalty, and will take action against those they view as enemies, such as the journalist Jane Mayer, who found private detectives digging up dirt on her after she wrote an unflattering portrait of them in the New Yorker.
Nesbit, the executive director of Climate Nexus, a communications organization in the energy-and-environment field, has also seen this process close up, in the heart of the conservative movement. In Poison Tea, he recounts the experience. He became CSE’s director of public affairs in the ’90s, when the group was mobilizing full-throttle to defeat the Clinton administration’s decidedly modest stabs at economic intervention, such as deficit-taming increases in marginal tax rates. To do battle with liberal politicians and weak-kneed conservatives, CSE was set up to be a mass-membership organization that would bring grassroots pressure to bear on Washington for libertarian policies.
But as Nesbit notes, the group quickly developed a close relationship with big tobacco companies that were desperately fighting new taxes and regulations on cigarettes, as the negative impact of smoking on health had become too obvious to deny.
There was nothing especially shocking about this alliance, and it certainly didn’t prompt any soul-searching on the libertarian Right. Since libertarians are opposed to all taxes and government regulations, it took no unseemly double-talk or ideological difference-trimming to find common cause with the tobacco industry. If Philip Morris or R. J. Reynolds wanted to give CSE millions of dollars to fight taxes and regulations on tobacco, that was simply good for business, all interested parties could agree.
In short order, then, CSE became a high-profile advocate for the tobacco industry’s legislative wish list. An organization launched with a vague mandate to advance free-market economic policy was now the go-to group for Big Tobacco in its fight against the Food and Drug Administration and federal efforts to stop smoking. The tobacco companies paid for much of what later morphed into the Tea Party in 2009, Nesbit writes; while the Tea Party arose spontaneously, its subsequent development was carefully guided by the CSE/Koch/Big Tobacco infrastructure. As Nesbit puts it, the Tea Party “is not a true grassroots movement but was strategically built to deflect anger away from corporations and redirect it at the government. A network had already been developed, funded by Koch and tobacco industry money, and only awaited a suitable opponent, which they found in Barack Obama. The willing public face was a brash-speaking CNBC editor [Rick Santelli] known for his public railings against government spending.”
The Tea Party was “not a sudden emergence due to reactionary movements against big government but rather the behind-the-scenes, secret strategy of wealthy corporations and individuals that began in the early 1990s to control the GOP.” There is academic research supporting this point, in particular a 2014 article in the journal Tobacco Control by Amanda Fallin, Rachel Grana, and Stanton Glantz of the University of California, San Francisco. Harvard sociologist Theda Skocpol has also recently posted research on this topic at the Scholars Strategy Network.
It’s important to understand that before the Tea Party uprising in 2009, CSE was what is called an “Astroturf” organization, with lobbyists, organizers, and a big Washington office, but very few real activists. Year after year, CSE claimed 250,000 members—no more and no less—with no evidence that it had anywhere near such numbers. As Nesbit explains, “CSE and other like-minded Libertarian organizations had no real political grassroots reach to them and a permanent seat at only a handful of important Republican Party tables in Washington.”
The lack of genuine popular appeal in the antigovernment Koch worldview explains why the Kochs and other insiders were taken by surprise by the ascent of Donald Trump, a true populist with no love for government but no government-hating libertarian either. While praised by libertarians for his proposed big tax cut and attacks on the Bush-Obama wars in the Middle East, Trump also supports a protectionist trade policy, more public works, and a crackdown on legal and illegal immigration, and he opposes cuts to Social Security and Medicare—big no-no’s to libertarians. Not surprisingly, the Kochs and their network are very cool to the Trump campaign, according to press reports.
The clear overlap between Trump supporters and the Tea Party suggests that the latter was never as libertarian as the Kochs and their Washington retainers thought. If one envisages a political matrix with “liberal” and “conservative” on one axis and “economic” and “social” issues on the other, there are four boxes. Liberals are liberal on both issue axes and conservatives are conservative on both. Libertarians inhabit the liberal-social/conservative-economic box. But there is a remaining box, which tends to be ignored, of people who are socially conservative and economically liberal. Such people, usually called populists, are the Trump base.
In the midst of all these convulsions on the right, my old college pal Rich Fink has been a central figure, along with a coterie of apparatchiks who move seamlessly from Koch Industries to Koch-funded groups and back again. The pieces of the Koch machine are interchangeable: People like Wayne Gable, who has run CSE and other Koch-controlled groups and now works for Koch Industries, and Nancy Pfotenhauer, who has worked for Koch Industries as well as various politicians, move around from one tentacle of the Kochtopus to another. “Throughout its steady evolution at every critical juncture, the network has been directed by Rich Fink—described by those who have worked inside the network as Charles Koch’s political brain and policy enforcer,” Nesbit writes.
Poison Tea is essential reading for those interested in the inner workings of a key element of the conservative insurgencey. What’s more, leftist foes of the libertarian worldview could learn much from it in terms of the mechanics of controlling and directing popular movements and public opinion. It still amazes me that activists on the left abandoned and essentially destroyed the Occupy Wall Street movement, which arose contemporaneously with the Tea Party. Instead of trying to harness its energy and use it to advance their agenda, Democrats ran as far away from Occupy and its associated activists as possible, primarily out of the fear that their anti–Wall Street message would jeopardize campaign contributions from big banks. (Much the same dynamic is clearly in play as Hillary Clinton, the first choice of the Democratic fund-raising establishment, seeks to downplay the seriousness of her insurgent primary challenger Bernie Sanders, who has tapped into residual Occupy-style sentiments among a younger Left electorate.) By contrast, Republicans embraced the Tea Party and were rewarded with control of the House of Representatives and the Senate.
Certainly, one can view what the Kochs, CSE, and the other players in Poison Tea did as nefarious. But one can also look at it as an instruction manual for how to bring about political change. As far as I can tell, the Kochs and their allies have not broken any laws or even behaved unethically; electioneering laws and ethics are now so nebulous and porous that there was never any need to push the boundaries of permissible behavior.
Whereas the right side of the political spectrum, fueled by vast sums of money from conservative and libertarian billionaires, has been extremely aggressive in pushing its policies and agenda, the Left has been much more reserved in promoting a positive vision for government. It was the Democrat Bill Clinton, not a Republican, who famously declared in his 1996 State of the Union address that “the era of big government is over.”
Political scientists Jacob S. Hacker of Yale and Paul Pierson of the University of California, Berkeley, outline a good starting point for the still-hypothetical liberal defense of government in their new book, American Amnesia. The most persistent casualty of the republic’s forgetfulness is the central role that government has played in promoting both political equality and a broadly distributed brand of middle-class prosperity. In the face of relentless Tea Party attacks on the government’s very legitimacy, Hacker and Pierson summon a persuasive case for the world we have lost as we’ve uncritically endorsed the dogmas of the small-government Right.
Of course, some on the center-left, such as the former Labor secretary Robert Reich and the New York Times columnist Paul Krugman, frequently respond to right-wing attacks and promote a positive role for government. But they can too easily come across as partisans preaching to a liberal choir. What Hacker and Pierson have done is make a dispassionate case for the mixed economy, one in which both government and the private sector are constrained, engaged in a “mutually beneficial tension,” as they put it.
There is a satisfying depth to American Amnesia, befitting the work of two accomplished scholars who have explored the issues raised in this book in academic journals for years. They bring to bear much intellectual ammunition historically found in conservative attacks on government. For example, many on the right believe that the Founding Fathers were extreme libertarians seeking only to tie the hands of government. In fact, as Hacker and Pierson document, it was the failure of government to do its basic job that led to the Constitutional Convention. Its purpose was as much to invigorate government as to restrict its scope. As James Madison explained to the convention on June 16, 1788, “What is the meaning of government? An institution to make people do their duty. A government leaving it to a man to do his duty or not, as he pleases, would be a new species of government, or rather no government at all.”
Hacker and Pierson also note that the economist Adam Smith, long beloved by libertarians for his defense of the free market, was primarily concerned with limiting the ability of private interests to use government for their own purposes. Today we call such behavior “rent-seeking”—i.e., the opportunistic appropriation of formerly public goods for short-term private profit. Although libertarians pay lip service to reducing it, they are far more interested in lavishing additional tax benefits on big corporations and the ultrawealthy than in promoting increased competition in the economy. All libertarians, for example, oppose antitrust laws in principle, despite the fact that oligopolies now dominate many markets, limiting competition and consumer choice and raising prices. As the Wall Street Journal recently reported, “A growing number of industries in the U.S. are dominated by a shrinking number of companies.”
Tech-sector moguls—who, via “disruptive” enterprises such as Uber and Airbnb, have helped turn rent-seeking into a whole new economic sector—also incline strongly toward Ayn Rand–style libertarianism, believing that they became billionaires solely through their own initiative, and often by heroically resisting the dark forces of government interference. But as Hacker and Pierson note—drawing on the brilliant 2013 book The Entrepreneurial State: Debunking Public vs. Private Sector Myths, by University of Sussex economist Mariana Mazzucato—the entire tech sector rests on an unacknowledged foundation of government research. In their words, “Nearly every one of the gee-whiz innovations that we shower with prizes and profits—indeed, virtually the entire range of computing technologies that so define our present era—owe their origins to the ‘military-industrial-academic complex’ . . . that America’s political and economic leaders built in the twentieth century.”
Today’s brand of antigovernment radicals often fetishize American exceptionalism—Trump’s hybrid Tea Party–billionaire candidacy captures this sentiment in its ingenious slogan: “Make America Great Again.” But the many ways in which the United States differs from other major countries are not wholly positive. Virtually all other developed countries offer much greater support to those at the lower end of the economic spectrum than we do and provide a much more substantial safety net for those in the middle class, such as national health insurance. Although other developed countries pay about half as much as Americans do for health and mostly have superior health outcomes, Republicans continue to vote every few weeks to repeal the Affordable Care Act, an extremely modest effort to expand health insurance far removed from, and far more expensive than, the comprehensive national health systems in other countries.
The irony, as Hacker and Pierson note, is that the United States actually pioneered many mixed-economy measures that are the foundation for European welfare states. Our higher-education system, for example, received vital promotion from the Morrill Acts in 1862 and 1890, which vastly expanded state universities. The GI Bill after World War II made higher education a ticket out of the working class for millions of Americans.
It isn’t only government that was different during the era of robust and inclusive growth in the 1950s and ’60s; corporations had much more concern for “stakeholders”—workers, citizens in communities where businesses operated, local governments that provided necessary educational facilities and infrastructure, and even shareholders, who were more willing to provide patient capital for investments that might take years to pay off. Of course, that is all gone now. Corporations are stateless, showing no regard for stakeholders. Even shareholders are treated as nuisances to be bought off with occasional share buybacks while corporate executives essentially loot a company’s underlying assets for their own enrichment.
It would be nice to believe in the libertarian fantasy that somehow or other the problems in our society and economy, from rising inequality to crumbling infrastructure to the outsourcing of middle-class jobs, could be solved without government spending, taxation, and regulation. But they cannot. Government is the only institution with the power to bring about institutional change. Rejecting its use in the name of a misguided idea of liberty simply allows rich people and big corporations to continue to write the rules for their own benefit.
Bruce Bartlett worked in the White House for Ronald Reagan and at the Treasury Department under George H. W. Bush. He left the Republican Party ten years ago and now considers himself an independent.
