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The Triumph of the Diligent Dozen

For four decades, 12 conservative foundations poured hundreds of millions of dollars into a successful campaign to make neoliberalism America's dominant philosophy.
 
 
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"Can a society whose culture is so given over to excessive commercialization ever function as a deliberative democracy? Can the public find and develop its own sovereign voice, or has its character been so transformed by commercial media . . . that public life will forever be a stunted thing?" -- David Bollier, p. 148 in "Silent Theft."

What a Tangled Web We Weave

  • Jeb Bush, the President's brother, served until recently on the Board of Trustees of the Heritage Foundation, whose two main goals are to privatize Medicare and public education.
  • Charles Koch is a founder of the Cato Institute, his brother David is a director. Their foundations are major contributors to Cato, which champions the privatizing of Social Security and federal public lands.
  • Charles and David are also co-owners of Koch Industries, a $35 billion privately-held oil company indicted in 1999 of cheating on its oil leases on those lands. The Kochs and their employees contributed generously to George Bush's several campaigns. David Koch and his wife Julie gave $487,500 exclusively to Republican candidates in the 2000 election cycle. Among the energy industry donors in that cycle only four companies -- Enron, Exxon/Mobil, Chevron, and BP/Amoco -- outdid Koch Industries, which contributed well over a million dollars, 90 percent to Republicans. Koch Industries was charged by the Clinton Administration's Justice Department with $352 million in pollution and hazardous waste violations. The Bush Administration dropped the charges when Koch Industries agreed to a settlement of $20 million.
  • The Kochs have also given handsomely to the neoliberal Mercatus Center at George Mason University, as did Enron Corp. CEO Kenneth Lay. Wendy Gramm, Sen. Phil Gramm's wife, was an ardent deregulator at Mercatus, and sat on Enron's Board of Directors. Mr. Lay in turn sat on the Board of Trustees of the American Enterprise Institute. He no longer does, but corporate America remains well represented; more than half AEI's current trustees are CEOs of American corporations, including Dow Chemical, State Farm Insurance, Mead Westvaco Corporation, American Express, Merck & Co., Motorola, and Exxon Mobil.
  • Vice President Richard Cheney once served as a Trustee of the American Enterprise Institute, too. His wife, Dr. Lynn Cheney, is currently a senior staffer there. So is Richard Perle, a chief architect of the Bush National Security Strategy and the preemption policy that drove the invasion of Iraq. Thirteen other American Enterprise Institute staffers serve in senior positions in the Bush Administration.

  • David Bollier's alarming and vital book, titled "Silent Theft: the Private Plunder of Our Common Wealth," describes a stealthy, violent attack on public life in America. The things we share freely and enjoy in common -- our culture and public knowledge, public assets, public services, public spaces, public lands -- define us as the American people. Slowly, deliberately, they are becoming private assets and services, private spaces, proprietary knowledge, and trademarked culture, to be marketed for corporate profit. The vibrant body politic is becoming a mundane body economic.

    This sea change in our public life is primarily the result of the efforts of 12 archconservative philanthropic foundations that set out 40 years ago to advance an ideology known as "neoliberalism," or "free market theology." These foundations -- call them the Diligent Dozen -- chose to fund not humanitarian projects but ideological programs, and they were willing to do so decade after decade, spending hundreds of millions in the effort.

    The Diligent Dozen: The Lynde and Harry Bradley Foundation, the Carthage Foundation, the Earhart Foundation, the Charles G. Koch, David H. Koch and Claude R. Lambe charitable foundations, the Phillip M. McKenna Foundation, the JM Foundation, the John M. Olin Foundation, the Henry Salvatori Foundation, the Sarah Scaife Foundation, and the Smith Richardson Foundation.

    Combined, these 12 fund an intricate, comprehensive network of neoliberal programs all across the country, but their most conspicuous and powerful beneficiaries are the Heritage Foundation, the American Enterprise Institute, and their virtual creature the Cato Institute, all in the nation's capital. These three think tanks have crafted or influenced virtually the entire agendas of both domestic and foreign policy for the George W. Bush Administration. And the interwoven personal network of operatives, corporate supporters and corporate beneficiaries is sobering. [See Sidebar.]

    The Triumph of Neoliberalism

    The main agenda of each of these think-tanks funded by the Diligent Dozen is to push the ideology of neoliberalism. Nations prosper, neoliberals assert passionately, only when citizens are at liberty to exchange rights of private property in free, unfettered markets. When governments seek to regulate markets free exchanges are tainted with some degree of compulsion, and social welfare suffers accordingly. That is the extent of their argument.

    A facile dichotomy of market vs. government is a gross oversimplification. Mr. Bollier shows how markets are literally embedded in a matrix of governmental institutions, from contract law to public infrastructure to the definition and prohibition of criminal behavior. Government is a precondition for the market system. Nowhere in neoliberal rhetoric is the corporate domination of markets even noted in passing. Exploiting a systemic advantage in bargaining power, modern corporations coerce the markets for their own inputs, and manage the markets for their outputs with advertising and administered prices. They distort -- they regulate -- "free markets" far more than governments possibly can. Failing to account for this, the neoliberal argument is fatally incomplete.

    Despite its glaring shortcomings, the neoliberals have now triumphed. Bollier's book describes the accelerating "enclosure of the commons." The primary political processes of enclosure are privatization and deregulation. Serious proposals are underway to privatize Medicare, Social Security, public education, and the national parks and forests, and deregulation has been a touchstone of public policy for at least two decades. Think airlines, banking, the telephone system, media ownership, the distribution of electricity and natural gas, corporate mergers and acquisitions, international trade, and the global mobility of capital.

    Privatization and deregulation serve exquisitely well not the public interest but the corporate. Scratch the surface of a neoliberal scheme and you will discover the creation, enhancement, or protection of a corporate profit opportunity. And you will see the public interest ignored, compromised, or devastated. The deregulated Enron Corporation and others like it testify to this, enriching their executives, directors, and political patrons while savaging their stockholders, employees, suppliers, and customers. Add the wholesale deceit and dishonesty of deregulated Wall Street. Add the $1.5 trillion liability of American taxpayers imposed by the deregulated savings and loan industry. When neoliberal ideologues seek "unfettered markets" what we get is unfettered corporations.

    It is not stupid to understand and to exploit this consequence. By far the bulk of funding for the neoliberal movement comes from corporate sources. Nor is it stupid to put the public sector on a secular starvation diet, through round after round after round of tax cuts. What better way to shrink the government-as-problem, or to encourage privatization and deregulation? It is no accident the economic and political power of American corporations has risen dramatically in the last several decades, while the economic and political power of the American people -- read democracy -- has suffered a corollary decline.

    The Annual Dinner of the American Enterprise Institute was held last February 26th, in Washington. The featured speaker was President Bush, who "delivered a historic address on the need for a new government in Iraq and the role it could play in spreading democracy in the Middle East." Soon thereafter Mr. Bush showed the world we mean business, indeed.

    The philanthropic funding of an ideology -- its articulation and dissemination -- is rare, perhaps unprecedented in American politics. To have sustained the effort over decades must be unique. It was a brilliant strategy brilliantly executed, but it begs to be counteracted if a decent, civil, compassionate public life is not to become a stunted thing.

    Richard W. Behan's most recent book is "Plundered Promise: Capitalism, Politics, and the Fate of the Federal Lands" (Island Press, 2001). Behan is currently working on a more broadly rendered critique, "Degenerate Democracy: A Primer On the Corporate Seizure of America's Agenda." He can be reached by email at rwbehan@rockisland.com. For more on David Bollier's book, visit SilentTheft.com