Chapter 4: Betting on People
The Olin Foundation’s support for law and economics was part of a larger success in public-policy philanthropy. The foundation wanted to build up an alternative intellectual infrastructure that could compete with entrenched academic and media elites at generating new ideas for the governance of American society. “What we desperately need in America today is a powerful counterintelligentsia,” wrote longtime Olin president William Simon in his 1978 bestselling book, A Time for Truth. He wanted to bolster thinkers dedicated to “individual liberty...meritocracy...and the free market.... Such an intelligentsia exists, and an audience awaits
Just about every aspect of the Olin Foundation’s philanthropy involved meeting that long-term goal. It was a monumental challenge. Though much of the funder’s grantmaking focused on scholars at colleges and universities, today left-wing orthodoxies are even more dominant on campuses than when the foundation first started to address this problem in the 1970s. Can we consider Olin to have succeeded in fostering fresh thinking that translates into altered public policies?
First, it’s important to note that Olin had a few savvy allies in its cause. The earliest efforts in this area were made by the William Volker Fund way back in the 1940s. In 1947, the Volker Fund agreed to help a group of 17 economists fly from the United States to Switzerland for the first meeting of the Mont Pelerin Society, an organization of libertarian economists founded by Friedrich Hayek to promote free markets and refute socialism. Hayek was the author of The Road to Serfdom, published in 1944 and never out of print since. It is an enduringly convincing and popular account of why government control of the economy leads
The University of Chicago professor who helped create the law and economics movement, Aaron Director, helped Hayek secure a contract for publication of The Road to Serfdom by the University of Chicago Press. Then in April 1945 Reader’s Digest ran a condensed version of the work, touting it as “one of the most important books of our generation” and giving it a massive audience. Hayek’s little volume made a deep impression in the United States, especially among business owners like William Volker of Kansas City, Missouri. When Hayek’s efforts to organize the Mont Pelerin Society came to the attention of Volker’s nephew and partner, Harold Luhnow, the Volker Fund offered up a check that allowed figures such as Director, Milton Friedman, Henry Hazlett, Leonard Reed, George Stigler, and Ludwig von Mises to make the trip to Europe.
The Mont Pelerin Society went on to become a hub of free-market ideas. Eight of its members won the Nobel Prize in economics. Others served in government. Many more became professors at colleges and universities around the world.
Under the influence of Luhnow, the Volker Fund played a crucial role in the emergence of free-market ideas after the Second World War. It supported groups that worked to influence economic teaching, such as the Foundation for Economic Education, the Institute for Humane Studies, and the Intercollegiate Studies Institute. In 1956, it sponsored a series of lectures at Wabash College by Milton Friedman, which evolved into Capitalism and Freedom, one of Friedman’s most significant works. (“This series of conferences stands out as among the most stimulating intellectual experiences of my life,” wrote Friedman in the preface.) The Volker Fund also underwrote the fellowship that allowed Hayek to teach at the University of Chicago for many years, and the grants that supported von Mises at New York University. “Ideas do not originate in monuments but in the minds of creative individuals,” said the Volker Fund’s statement of policy, explaining why it chose to underwrite people rather than things like university buildings.
The Volker Fund was active at a time when few other philanthropists showed an interest in supporting the ideas behind free enterprise, so it had an outsized influence. It aided an important platoon of intellectuals as they wrote books and articles, trained graduate students, and otherwise prepared a powerful vision of economics that differed radically from the centrally planned welfare states that swept Europe and much of the rest of the world during the socialist and modernist wave of the 1930s-1960s. Eventually, the market model would emphatically surpass socialism, but that day was in the future.
Many of the individuals supported by Volker saw themselves as a “remnant” (a term coined by Albert Jay Nock in 1936) who kept ancient, time-tested ideas alive. “They are obscure, unorganized...each one rubbing along as best he can,” wrote Nock. “They need to be encouraged and braced up, because when everything has gone completely to the dogs, they are the ones who will come back and build a new society.” In the 1940s and 1950s, the philanthropy of the Volker Fund did much of this encouraging and bracing up. In doing so, the skeleton of a true conservative counterintelligentsia was created, for fleshing out later on.
In time, about a score of foundations of varying size would become involved in funding this movement. The largest contributors were the Lynde and Harry Bradley Foundation, the Sarah Scaife Foundation, the Smith Richardson Foundation, and Olin. Others included Volker, the Carthage, Earhart, W. H. Brady, Charles Koch, David Koch, and Claude Lambe foundations, the Searle Freedom Trust, and the Philip McKenna, JM, Samuel Roberts Noble, Randolph, and Henry Salvatori foundations.
The combined assets of these funders favoring conservative or libertarian public policies did not approach the massive endowments of their liberal counterparts. Left-wing foundations have wildly outspent right-wing foundations for more than a half century. In their book The New Leviathan, David Horowitz and Jacob Laksin calculated that, “as of 2009, the financial assets of the 115 major tax-exempt foundations of the Left identified by our researchers added up to $104.6 billion,” while “the financial assets of the 75 foundations of the Right” cumulated to a collective $10.3 billion. The rightward foundations spent a total of $0.8 billion on conservative causes, while the leftward foundations provided $8.8 billion for liberal causes.
In other words, public-policy philanthropy that aims left gets about eleven times as much foundation money as that which aims right. (Individual donors are more evenly split, though there are still more on the left.) The Washington Post once observed that the Ford Foundation alone has given more to liberal causes in one year than donor Richard Mellon Scaife (sometimes called the Daddy Warbucks of the Right during the 1990s) gave to conservative causes in 40 years.
Despite their size disadvantage, the right-leaning donors have had many successes. The powerful influence of the Olin Foundation was less a matter of its wealth (quite modest in fact) than of the perspicacity and persistence with which it invested. Through the 1950s and into the 1960s, most of Olin’s giving had taken the form of quite traditional charity, like support for Cornell University, his alma mater, and Washington University, in St. Louis, where he lived. In the 1960s, however, as the political and social trends of the day worried the industrialist, his philanthropy turned in the direction of public policy.
In 1969, black militants at Cornell occupied the student union, brandished rifles, threatened certain professors, and issued a list of demands that included full pardons for their vandalism and threats. Olin was appalled when the administration capitulated within a day and a half, allowing the gun-toting radicals to march out in triumph. By 1973 he had decided to reorient his philanthropy. “I would like to use this fortune to help to preserve the system which made its accumulation possible,” he told Frank O’Connell, who managed Olin’s giving. With those words, the John M. Olin Foundation turned into an investment fund for persons and groups defending individual liberty, economic freedom, and Western traditions.
The foundation sustained many of the people and organizations that led the conservative intellectual revival. It became a generous supporter of think tanks, giving more than $9 million to the American Enterprise Institute and over $6 million to the Hoover Institution. Olin was willing to back brand-new institutions as well as established ones. In 1975, it offered $10,000 to the recently formed Heritage Foundation. Another $10 million would follow over the next quarter century.
Olin helped finance Free to Choose, the popular public-television series on free-market economics hosted by Milton Friedman. It financed the creation of journals such as the New Criterion, which focused on arts and culture, and the National Interest, which concentrated on foreign policy. The foundation gave only small grants to the Public Interest, the influential social-issues quarterly edited by Irving Kristol, but it underwrote Kristol’s positions at New York University and the American Enterprise Institute.
For the most part, these were off-campus investments. Yet the Olin Foundation, as we’ve seen, also pursued a special interest in the academy, knowing that if new philosophical paradigms were really going to thrive, proponents would have to find perches at colleges and universities. Its support for campus law and economics centers reflected this belief, and so did a number of other projects.
The National Association of Scholars, which received more than $2 million from the foundation, worked to mobilize professors and graduate students in support of classic education, through conferences and publications. The NAS recruited thousands of members, and a foundation memo once described the group as “one of the best organizations we support.” The California Association of Scholars, a chapter of the national organization, performed the initial work behind Proposition 209, a ballot initiative approved by voters in 1996 to ban the use of racial preferences in the state government, including admissions and hiring at public universities.
The foundation also supported the rise of a network of right-of-center student newspapers, such as the Dartmouth Review, the Michigan Review, the Princeton Sentinel, the Stanford Review, and the Virginia Advocate. These publications launched many successful journalists, like Pulitzer-winner Joseph Rago (Dartmouth Review), ABC News correspondent Jonathan Karl (Vassar Spectator), New York Times columnist Ross Douthat (Harvard Salient), commentator Ann Coulter (Cornell Review), National Review editor Rich Lowry (Virginia Advocate), blogger Michelle Malkin (Oberlin Forum), author and Silicon Valley investor Peter Thiel (Stanford Review), author Dinesh D’Souza and radio host Laura Ingraham (both Dartmouth Review), and many others. “If everything we have done since was stripped away, leaving only the Collegiate Network as our legacy,” said longtime Olin Foundation head James Piereson of these newspapers in 2004, “we would still proudly say our work yielded enormous success.”
Another major initiative was the John M. Olin Faculty Fellowships program. It aimed to help promising young scholars by making it possible for them to take a year off from teaching in order to write a book or journal articles—thus gaining the credentials, in the “publish or perish” world of the academy, to secure a career at a top school. The fellowships started in 1985 and eventually boosted more than a hundred scholars, mostly political scientists, historians, legal scholars, and philosophers. The typical recipient was an assistant professor who had accumulated a bit of experience but remained a couple of years away from a tenure decision. Over the years, the foundation spent more than $8 million on the fellowships. Prominent recipients included Peter Berkowitz, a Hoover Institution fellow and a prominent critic of modern liberalism; John DiIulio, an expert on crime, religion, and public policy at the University of Pennsylvania; Aaron Friedberg, a Princeton University professor and national-security analyst; Caroline Hoxby, Stanford University economist and education authority; Frederick Kagan, an American Enterprise Institute scholar who helped develop warfighting strategy in Iraq; Mark McClellan, the Brookings Institution scholar who served as chief administrator of Medicare and Medicaid and as a commissioner of the Food and Drug Administration; Jennifer Roback Morse of the Ruth Institute, which promotes traditional marriage; Jeremy Rabkin, law professor at George Mason University; Paul Rahe, Hillsdale College classicist; C. Bradley Thompson, Clemson University economist; Eugene Volokh, UCLA law professor and popular blogger on legal issues; and John Yoo, law professor at the University of California at Berkeley and a high official at the Department of Justice early in the war on terror.
Many Olin programs depended heavily on the foundation to meet their budgets, but some managed to migrate to other sources of funding. The James Madison Program in American Ideals and Institutions, created at Princeton University with a mission to promote “teaching and scholarship in constitutional law and political thought,” was one. It aimed to provide the traditional civics education that so many colleges now forego, as well as to balance the left-of-center political orthodoxies at Princeton. The Madison Program offers courses, lectures, and conferences, and sponsors fellowships for visiting professors and post-doctoral students.
The initial backers of the Madison Program were the Olin and Bradley foundations, but contributions from individuals surpassed foundation grants within two years. “Fine museums and hospitals are important,” stated investment banker Peter Flanigan in explaining his support, “but only in a society with sound fundamental principles.” Flanigan and other backers were graduates of Princeton who saw the Madison Program as a way to invest in their alma mater without handing philanthropic dollars to administrators who would very possibly put them to work for objectionable causes. Many Princeton alumni, for instance, were turned off by the school’s decision to have Peter Singer, a philosopher who has defended the practice of infanticide and other extreme causes, run Princeton’s University Center for Human Values.
Donations to the Madison Program go straight to its programs, without any portion being redirected by the university to other purposes. To protect its freedom to determine its own activities, the center foregoes funding from Princeton. And apart from a pair of small gifts that have established a prize for a senior thesis and an annual lecture, the center has refused to create its own endowment, because donors “have fears about what will be done with the money down the line. They would rather give us more money now to do good with, while people they trust are doing the spending.”
Similar programs exist at other schools, such as the Ashbrook Center at Ashland University in Ohio, and the Political Theory Project at Brown University. For many years, prominent philosopher Allan Bloom organized influential lectures and seminars at the University of Chicago under the auspices of the John M. Olin Center for Inquiry into the Theory and Practice of Democracy. In 1987, Bloom stormed onto the national stage with his book The Closing of the American Mind, an indictment of the moral relativism that had become so pervasive at colleges and universities. It became one of the unlikeliest success stories in the history of book publishing, spending ten weeks at No. 1 on the New York Times bestseller list and eventually selling more than a million copies. That accomplishment would have delighted Stephen King or James Patterson; for a book whose chapters have titles like “From Socrates’ Apology to Heidegger’s Rektoratsrede” it was a remarkable achievement. The book drove a national conversation about the purpose of higher education, and for many readers introduced the idea that something was amiss in modern education. Bloom became an important member of the conservative counterintelligentsia.
The book had a modest beginning: it started out as an essay for National Review in 1982. A grant of $50,000 from the Olin Foundation allowed Bloom to devote time to expanding that germ into a fuller argument. Five years later, Olin’s vote of confidence had yielded the runaway bestseller. By 2001, when Bloom’s center in Chicago received its final grant, the John M. Olin Foundation had committed more than $9 million in backing to his efforts.
If conservative philanthropists thought they were going to transform the political climate on campus, they failed. American colleges and universities are more left-wing now than they were a generation ago. Voter registration records and survey results show that nine out of ten professors at elite schools place themselves on the Left. (See “The Shame of America’s One-party Campuses,” the American Enterprise, September 2002.)
If, however, donors can find satisfaction in cultivating a fertile class of dissenters from liberal orthodoxy, whose knowledge can be valuable in creating wise and balanced national policies, then there is reason to be pleased. The monopoly of the liberal academy in guiding public-policy creation has been broken compared to the way it existed circa 1960. There is now a conservative intelligentsia with many obvious accomplishments.
This modest but crucial success required philanthropists with an ability to identify first-rate talents and a willingness to back them over long periods of time, recognizing that some bets will come through spectacularly while others will flop. The best public-policy donors of the last generation had the confidence to identify promising recipients, and then stick with them without expecting obvious and immediate “achievements.” These donors understood that intellectual tides are not predictable, can shift rapidly, and often cannot be measured in simple ways, but that it is possible to nurture new ideas into public prominence if you have strong partners—and that fortune favors the brave, the well-prepared, and the patient.
Policy Player Profile: Roger Hertog
When Roger Hertog retired as a leader of one of the world’s top investment firms in 2000, he launched a second career as a philanthropist. Some of his donations have been generous but conventional—like funding a large expansion of the Bronx Library Center—but most have been highly idiosyncratic investments in ideas. “Can you really invest in ideas?” Hertog asks. “The answer, broadly speaking, is yes.”
Hertog has supported think tanks, newspapers, magazines, scholars, and students. By the end of 2014 he had given away roughly $200 million to various intellectual causes and institutions, ranging from the free-market Manhattan Institute to the Jewish Review of Books to his own Hertog Political Studies Program seminars that unite promising students with outstanding teachers and great documents.
At some level, all philanthropy is about ideas, maintains Hertog: “You can invest in bricks and mortar, but really that’s about ideas too. Brain science, cancer research, museums of history and art—they all end up being about ideas. People who love modern art as opposed to the impressionists or the great masters are engaged in a great debate about the idea of art.”
Even Hertog’s $5 million donation to the Bronx Library Center was a kind of homage to the power of ideas. He grew up just a couple of miles from the glistening new library, in a one-bedroom apartment with a single mother. The first book he recalls reading at a predecessor library was The Autobiography of Benjamin Franklin. He also has early memories of searching for titles about Franklin Delano Roosevelt—he wanted to know why the wartime President had not done more to prevent the Holocaust, which claimed the lives of many of Hertog’s relatives. (Hertog’s parents left Germany in 1938 and he was born three years later in the United States.)
Nowadays, Hertog aims to fuel good ideas by investing in the people who generate them and the institutions that promote them. “It’s a lot like investing in a business,” he says. “Sometimes you see returns right away. But it can also take years before the investment pays off. If you invest in a magazine or a think tank, you quickly get a sense of the scholars—how good they are, the quality of their work, and so on. You have to have quality before you can have impact. You may not see the impact right away, but you know you want to continue to invest.”
Having impact in the philanthropy of ideas and public policy is tricky, says Hertog. “I think there are three or four big rules that apply to idea-driven philanthropy in particular. First, you have to know what you believe in. Can you put it in writing? You have to have a strategic vision, and you need the clarity of mind to describe what it is. Aristotle said that a small mistake at the beginning of a journey is a large error at the end. You need to think about this early.”
Next comes people. “At the organizations you support, you need the best people in leadership, and you must broadly agree with their worldview. In this way, think tanks are no different from businesses: If you pick the wrong people, you’ll suffer irreversible problems.” He offers a cautionary note: “Don’t be too impressed by intellectual pedigrees. That can be a good place to start, but often what matters more is what’s in the heart and soul and mind of an individual.”
Then there’s the board. “You have to have a good board, and this is about good people too,” he says. “They don’t need to be area experts. They should have common sense and life experiences. Sometimes that can lead to an argument. That’s good. You need to stay sharp, and competitive discussions can help.” Too much collegiality can actually pose a threat to excellent philanthropy. “When you’re giving away money, everyone thinks you’re smart and right. People will agree with you even when you’re making a mistake. On the board, you want people who are principled and who will warn you when you’re wrong about something.”
And Hertog thinks about philanthropy very broadly, without over-focusing on mechanisms. “Anything that furthers intellectual debate can be a part of the philanthropic package,” he says. “Often that means giving to a nonprofit group, but on some occasions it makes sense to invest in a venture organized instead as a business. Even if it will lose money, when the people are strong and the vision is consistent with your own, that can be an excellent donation.” In his own career, Hertog has put cash into nominally for-profit organizations like The New Republic (a political magazine) and the New York Sun (a New York City daily newspaper) recognizing that they were unlikely to make any returns, but could still be considered successes as philanthropy. Of course, “you have to use private funds. You can’t do this through your foundation.”
In 2010, Hertog created the Hertog Political Studies Program. “We’re trying to build a new generation of leaders,” he says. The way to do this, he believes, is through teaching. “Most of us have felt the influence of great teachers. Somewhere along the way, we’ve had great teachers—in high school or college, while pursuing advanced degrees, or even in books that exposed us to great thinkers, even if they were written hundreds of years ago.”
Many students are discouraged from non-utilitarian study by the high cost of tuition. The Hertog Political Studies Program actually pays some of America’s best college students to attend its courses, which can vary in length from a few days to a few weeks. It seeks the best and brightest, and puts those it accepts into classrooms with first-rate teachers who lead them in lectures and conversations about great books, political theory, and the good life.
“We began with the observation that the academy is increasingly politicized and narrow and miniaturized,” says Hertog. “Political science keeps dealing with smaller and smaller questions. Our idea is to take a different approach, bringing together theory and practice.” Students read the texts of Machiavelli, Tocqueville, and others, then hear from practitioners such as Supreme Court Justice Antonin Scalia, columnist Charles Krauthammer, or Harvard professor Harvey Mansfield. “Our idea is to catch students at the start of their careers and prepare them for writing, advanced degrees, the diplomatic corps, and so on.”
Hertog won’t live to see the full return on this investment—a complete measure of the impact of these programs won’t be possible until the students have finished their own careers. Did any of them become great American statesmen? Did they develop policies that met new challenges? Did they become teachers themselves, shaping the minds of a generation not yet born?
These things will mostly happen after the Hertog Foundation has itself slipped into history. “I’m broadly supportive of sunsetting foundations,” says Hertog, referring to the practice of spending assets until they’re gone rather than trying to preserve a trust in perpetuity. “One can never know with any great certainty that future trustees will follow donor intent. And maybe they shouldn’t. As time moves on, new problems and solutions emerge. Things change. A point of view that’s relevant today may not matter later. This is especially true in the philanthropy that’s oriented to ideas.”
Policy Player Profile: Christopher Demuth
From 1986 to 2008, Chris DeMuth presided over the blossoming of the American Enterprise Institute into one of Washington’s most influential think tanks. From that work, and his other experience in government, academe, and corporate life, he has become an expert in how good national policy is made—and thwarted—and the vital role that private donors play in nudging debates toward productive ends.
“Think tanks produce different kinds of work than universities,” he notes, work “that is more applied than theoretical, and highly focused. The first think tanks were concerned with problems in government, and wanted to improve the world. They weren’t just seeking abstract truth. They were seeking a better here and now in public policy.”
This mission created its own funding strategies. “Universities will go after donors by implying, ‘this school made you everything you are, and now you should help the next wave succeed.’ Historically, think tanks went after people who had a concern with politics, people who thought America was in trouble and needed a policy revolution. Think tanks tend to have a point of view, and seek donors who share that point of view. Brookings mostly went after liberals. They got a lot of money from the Ford Foundation, for example. AEI and Heritage went after successful entrepreneurs and businessmen worried about the fate of the private-enterprise system.”
“There are many areas where the contributions of think tanks have been distinct from anything in university research, and dramatically influential. For instance, the antitrust revolution of the late 1970s and ’80s, the movement abolishing regulation of airlines and trucking, and the reform and deregulation of financial markets. Those programs were essentially researched out of Brookings and the American Enterprise Institute, and donors like Smith Richardson and Searle were staunch supporters, even when we were doing things that were controversial. Their support of scholars like Robert Bork and others working in these areas made a difference.”
“Now that the established think tanks have become successful and flush with funds, there is the risk that they will begin to look and operate like universities, with more bureaucracy and internal politics, and with output that is more flaccid and less fecund, in the style of university research. I think that the institutional character of the successful think tanks is pretty strong, and that they are mostly continuing to be productive and creative. But there are risks in being big, established organizations. A large endowment can actually be a problem, because everybody knows you’re rich so it’s hard to raise new money, and the scholars become more demanding.”
“There are important entrants that keep coming in, like the state think tanks. The Goldwater Institute, for example, has been doing terrific work. I’m happy that the restrictions on entry into this world are very low, and that it’s easy for people with distinctive ideas to hang up a shingle and go to work on strategies for government reform.”
The donors willing to write checks to think tanks have changed over time, according to DeMuth. “When I first came to AEI we did not have any endowment to speak of, but we did have regular annual support from many corporations. Many of the Fortune 500 made a significant annual grant. That was something my predecessors had cultivated over a long period of time. When I left AEI, corporate support was a smaller component of our budget because corporate donations had become more difficult and I had turned to individual and foundation support. Big corporations have become increasingly cowed by the growth of government and their growing entanglement with and reliance upon large government bureaucracies. Many do not wish to be perceived as oppositional to anything.”
“If you look up the speeches on government policy made by the presidents of big corporations in the ’50s and ’60s, you’ll be amazed. They were fierce, unabashed champions of the private-enterprise system. Today, CEOs are likelier to be apologetic about their work and the harmful effects of corporations, and submissive to the government agencies that regulate them, tax them, and tell them how and where to operate.”
One person who spotted the political domestication of big companies early on, and spent much of his life pushing businesspeople to play a bolder role in public discussions, was Irving Kristol. “Irving was a strong free-market man who believed that cultural and social issues were paramount. He spent a good deal of his life preaching to businesspeople who didn’t want to hear that.”
“Irving found some allies, the most important one being Bill Simon Sr., who was head of the Olin Foundation for many years. Bill, too, was a staunch social conservative as well as an articulate defender of free markets. He was a full-spectrum conservative, and like Irving thought that our cultural and social problems were the most urgent—because economic success depends as much on sound cultural and social mores as on sensible tax and regulatory policies.”
“During the decades when Irving was a leader of our movement, it became much easier and more respectable for businesses to make large contributions to public-policy organizations. He published trenchant columns in the Wall Street Journal. He founded a group called the Institute for Educational Affairs whose board was half academics and half businesspeople; it raised money from business firms and channeled it into sensible political and policy research.”
“Today, large corporations have been neutered and scared out of assertive public-policy philanthropy. Fortunately, strong leaders and advocates for refreshed public policies are emerging from other sectors. We now have a very strong entrepreneurial culture that produces people of great energy and strong principle. That’s relatively new.”
“Finance has changed also. In the past, finance was heavily concentrated in the big money centers and a couple of investment banks. Today we have a highly variegated system of financial intermediation that includes money market funds, hedge funds, and widely scattered investment vehicles of one kind or another. A lot of people in finance have done well and have strong political views—on the left as well as on the right.”
“So today’s sharpest critiques of dysfunctional public policies are much more likely to come from entrepreneurial commerce and entrepreneurial finance than from the large established firms. That’s quite different than it was 40 years ago.”
DeMuth still admires the early donors who backed the rise of a new conservative intelligentsia in the middle of the last century, when American governance was dominated by a homogeneous liberalism. “It is easy to point to important policy changes where the support of the old philanthropists like Olin, Smith Richardson, Scaife, and Bradley was absolutely crucial. Take, for example, Bradley’s longstanding support of school choice and voucher programs. It’s not an exaggeration to say the foundation almost single-handedly put that new policy mechanism on the table.”
“John Olin and the Olin Foundation supported Michael Novak, who was not so much a policy person as a philosopher of the private-enterprise system. When Michael Novak began working on the idea of democratic capitalism almost everybody, including its defenders, viewed capitalism as useful for fueling progress and high levels of material welfare, but essentially amoral and selfish at its root. Nobody did more to uncover the ethical attributes of the free-market system than Michael Novak, and he did this entirely on year-to-year philanthropic support.”
“Olin was an early supporter and stuck with him year after year—a theologian from Syracuse University whose only background in politics had been working for people like Bobby Kennedy and Sargent Shriver. That was a pretty high-risk investment. We look back on it and can see that it was a brilliant bet, but I’m sure there were some blunt conversations around the table at Olin and at the American Enterprise Institute.”
DeMuth sees many opportunities for donors to guide public policy in innovative ways today—especially the nimble entrepreneurial givers. “They’re spending their own money. They’re not bureaucratic. And they are successful businesspeople who understand real-world problems.”
DeMuth hopes that these financially successful Americans won’t shy from the difficult work of keeping our governance on track. “I think a very large challenge for public-spirited citizens today—liberals as well as conservatives—is to design institutions that protect the traditional values of limited constitutional government within the modern welfare state. In all of the advanced democracies, the old constitutional traditions have been giving way.”
As our federal government takes on a kind of nurturing role, it suffocates as many citizens as it succors. “Preserving a large sphere for civil society and private institutions—be they voluntary organizations, or churches, or the family—is important to keeping us free and self-reliant. We need to relieve government of this populist tendency to want to solve every problem immediately, to convert every micro-group into clients, and every policy issue into an electoral strategy.”
“Contriving new institutions that preserve limited government and prevent the bureaucratic state from encroaching further and further on private life is imperative. Politicians and corporate executives aren’t going to lead that crusade. Private donors might.”