A Great Institution in Freefall

In July 2002, I published articles expressing concern over the direction in which one of my favorite libertarian institutions, The Foundation for Economic Education, seemed to be headed and especially over the decision by its then-president, Mark Skousen, to invite Rudolph Giuliani to speak at the group’s Trustees’ Dinner.  My writing on this issue drew a lot of attention and ultimately led to major changes at FEE.  This page collects the articles — and reader reactions — that started it all.

– Jacob H. Huebert

Contents

Part I:  A Great Institution in Freefall

Mark Skousen Responds

Readers Respond

Part II:  A Great Institution in Freefall Seeks Quantity, Not Quality

Postscript

________________

A Great Institution in Freefall

by J. H. Huebert
July 9, 2002

I was bewildered the other day when I pulled up FEENews.org, the internet mouthpiece of The Foundation for Economic Education (FEE), the nation’s first free-market think tank.  There I saw a boast of their latest accomplishment: the keynote speaker and guest of honor at their annual trustees’ dinner will be none other than former New York Mayor Rudolph Giuliani.

“Ruldolph Giuliani?” I asked myself aloud.  As in stadium socialist Rudy? Mandatory id cards Rudy? Anti-business Rudy? Anti-First Amendment Rudy? Anti-Second Amendment Rudy? Price control Rudy? Shameless self-promoter and political hack Rudy? Also known to some as Rudy the Red, or simply Red Rudy?  Yep, I confirmed, that was the one.

Back in May, I attended FEE’s first national convention in Las Vegas. I got the sense while I was there that their new president, Mark Skousen, wanted to change FEE’s position in the world of free-market organizations, to go from quiet publisher of a simple but outstanding periodical (which, thankfully, has so far maintained its high standards), to an attention-grabbing, slogan-selling machine milling out material for the masses. But even I wouldn’t have expected FEE to stray this far from its original mission.

Like many libertarians, my introduction to the freedom philosophy came when a wise older person who saw my capacity for rational thought put me on to FEE’s monthly magazine, The Freeman.

There, at age 14, I found a world of ideas that broadened my perspective far beyond what I had learned listening to Rush Limbaugh and speeches from Republican politicians.  I found that all political problems had a common answer—that no one should be prohibited from doing anything that’s peaceful, as FEE’s founder Leonard Read put it. Nothing more, nothing less.

What also impressed me was that there was a sense The Freeman conveyed, that these were serious ideas for serious people.  FEE took Albert Jay Nock’s “Isaiah’s Job” seriously, and understood that reaching the Remnant, not the mass-man, was the libertarian way.

My contact with FEE and its then-president Hans Sennholz led me to Grove City College, where I discovered Austrian economics, and gained in depth knowledge of the ideas of Ludwig von Mises and Murray Rothbard.  And I have FEE to thank for that in more ways than one—after all, it was Leonard Read who helped dig up the money for Yale University Press to publish Mises’s Human Action for the first time in English in 1949.

My relationship with FEE became even closer in the summers of 1998 and 1999, when I was selected from a number of stellar applicants around the world to work as an intern there, and live in FEE’s Irvington, New York, mansion headquarters. The history in that building was amazing, because so many great names had been there and left their mark, doing so much important work for the cause of liberty.

Not only did I have the rare opportunity to learn daily and directly from then-president Donald Boudreaux, a great economics teacher and inspiring advocate for liberty, but also from all who were there and who passed through, including the likes of Edmund Opitz, The Freeman’s editors, and many other libertarian greats.

In the summer of 2000, when I was living and traveling throughout Guatemala, climbing the pyramids and volcanoes, including scaling the highest peak in all of Central America, and paddling along jungle waterways in an indigenous dugout photographing everything in sight, I observed another fruit of FEE’s many years of good work—Francisco Marroquin University (UFM), in Guatemala City. UFM was founded by Guatemalan businessman Manuel Ayau after he discovered FEE and met Leonard Read on a trip to New York. This, despite the fact that Read did not even have a sign identifying FEE headquarters at the road, never mind noisy conventions with famous speakers.

Today, UFM is undeniably not only Guatemala’s premier university, but also the world’s greatest libertarian university.  The names of Mises, Hayek, and Leonard Read are on display everywhere there, and no one who passes through UFM for any degree, even if it is in medicine, does so without taking courses on the social philosophies of Mises and Hayek. UFM has become such a powerful influence in Guatemala that the US ambassador complained about how its “extreme” views are preventing the US from imposing its statist will there. All thanks to FEE, and all without publicity stunts.

When I visited, UFM was hosting a seminar for a self-selected group of Guatemala’s elite business leaders, where Donald Boudreaux and FEE Trustee Tom Palmer gave lectures on economics and the history of libertarian thought.  FEE didn’t get any recognition in the US press for doing it; there were no TV cameras.  But it was FEE doing what FEE always did best, in a quiet, simple, dignified way, and it will undoubtedly have an impact on all of Guatemala, down the road, in ways that cannot yet even be imagined.

After that, the next time I had any contact with FEE, aside from receiving the magazine, was at the big Las Vegas convention in May of this year. From the outset, I could tell I was dealing with a different FEE.

On the first day, Mr. Skousen emphasized how it is important that any government welfare program include a means to hold people accountable and ensure that they have incentives to get off welfare ASAP.  All well and good, perhaps, compared to the present system, but we have plenty of people saying that already, even in Washington. Why all the parroting of public policy issues, instead of effectively conveying the idea that a thief shouldn’t be allowed to take one cent from you, ever?

The weekend continued with further phenomena never before observed at a FEE event.  Consider a panel on the war on terrorism where only one panelist, Harry Browne, took the libertarian position, and the others made various arguments for the warfare state, including one who proposed a larger role for the United Nations. And through it all, there was another new one for FEE: audience members cheering and booing when they heard things they did or did not like.  So much for Leonard Read’s policy of avoiding debates for that very reason; so much for education; and so much for the sort of self-improvement Leonard Read advocated in Elements of Libertarian Leadership, which FEE has taken out of print.

FEE programs used to focus on the ideas of Frederic Bastiat, Leonard Read, and Ludwig von Mises. They now appear to instead focus on Adam Smith, Milton Friedman and, of course, Mark Skousen. The result? A dilution of libertarian ideas and an emphasis on public policy issues rather than eternal moral axioms.

Many long-time FEE supporters remember when Leonard Read invited Milton Friedman to speak at a Trustees’ dinner, to the dissatisfaction of those who knew that University of Chicago economics professor Friedman was not a libertarian. But at least Dr. Friedman can be considered a man of ideas. He spoke at that dinner on, inter alia, the evils of occupational licensure, about which he indeed has some important things to say. But look at the result Leonard Read did not foresee and never would have wanted: Dr. Friedman vigorously cheering FEE on in its website, congratulating the organization for snagging Mr. Giuliani as a speaker.

Sadly, it seems purity is taking a backseat to publicity these days.  Thus, there’s FEE’s president getting a photo-op with warfare-statist William F. Buckley, Jr., who cheers on the “revitalized” FEE.  Thus, non-libertarian Nixon-admirer Ben Stein is the keynote speaker at the National Convention. (I like Stein in many ways, but he wouldn’t fit in at the FEE I knew.) Thus, there’s self-proclaimed anti-libertarian and warfare-statist Dinesh D’Souza delivering two lectures at FEE’s National Convention. Thus, authoritarian and would-be dictator Rudy Giuliani is the keynote speaker at the Trustees’ Dinner, who, as the new voice of FEE, stated: “We have to separate fundamental freedoms from those things we had the luxury to do in the past.”

One can only wonder what will be next.  An award for Mikhail Gorbachev?  A dinner at the Waldorf in honor of Nelson Mandela?  Those might get FEE on C-Span, too, and I’m sure they could come up with some rationalization for doing such things.

What FEE’s latest leadership probably does not recognize is that even if this new approach does garner some publicity and raise some funds, it will make FEE completely irrelevant. What distinguished FEE through the years were the things that it is now is working so hard to eliminate—the seriousness, the quietness, the lack of compromise. There are already plenty of mainstream quasi-libertarian groups out there doing public policy work and honoring big names like Milton Friedman. At least those groups have specific political missions. What is FEE’s mission now, except to get bigger and more famous for its own sake?

A great libertarian institution is now in freefall. The apparent end of the FEE I knew is not the end of the world, or even the end of the true libertarian movement.  Leonard Read, Edmund Opitz, Henry Hazlitt, Hans Sennholz, Donald Boudreaux, and many others through the years did their jobs well enough to see to that, and today organizations like the Ludwig von Mises Institute carry on the tradition in their own way. The Remnant will survive, as it always has.

But apparently, unless things turn around there very soon, the Remnant may no longer thrive at FEE, with many young minds being poisoned in the meantime, as the result of some unfortunate compromises made for the sake of a very short time in the limelight.

________________

Hours after that article appeared, FEE President Mark Skousen sent out a response.  Here it is.

Letter from Mark Skousen, President, Foundation for Economic Education

July 9, 2002

Dear fellow Austrians,

Re J. H. Huebert’s diatribe on FEE.

I was told in no uncertain terms that the Austrian investment group was strictly a forum for investing, not as a forum for personal attacks or political vendetta.  I resent very much this misguided insult to the Foundation for Economic Education.

The fact is that nothing has changed in our FEE seminars or “Ideas on Liberty.”  We are just as “no compromise” free market as ever.  Any one who has read my books or my columns in IOL knows my staunch free-market views.

We continue to recommend heavily the works of Bastiat, Read, Hazlitt, Mises–and yes, Adam Smith (the latest “Wealth of Nations” published by Regnery has a favorable intro by Mises!) and even occasionally Milton Friedman (although I criticize Friedman in a recent IOL for promoting inflation in Japan), who was a friend of Leonard Read.

Mr. Giuliani’s appearance at the fall banquet (Oct 25) is nothing more than an “outreach” program to tell our story to a larger audience who would not normally know who FEE is.  There is nothing new about this, except that Giuliani is a bigger draw.  We never have advertised him as a libertarian, just as we never advertised Bill O’Reilly, Paul Gigot, Ben Stein, or Margaret Thatcher (all previous speakers at our fall and spring dinners) as  libertarians.  Leonard Read and FEE always appealed to both conservatives and libertarians–a broad umbrella.

If Mr. Huebert had bothered to call me, he could have avoided such embarrassing falsehoods and misrepresentations.  Why is it that so many libertarians go half cockeyed with holy-than-thou attitudes and engage in so much in-fighting?  It’s a sad commentary about our freedom movement.

Last but not least, FEE is making a major comeback.  We are bringing back the glory days of FEE, building on the good works of Hans Sennholz and Don Boudreaux after years of benign neglect.

AEIOU,

Mark Skousen

President, FEE

________________

Other reactions were more supportive.  In fact, I was swamped with e-mails from around the world, from people who are or were FEE trustees, staff, and supporters, as well as old friends of Leonard Read, academics, businessmen, writers, and talk-show hosts.  Here are some excerpts.

“Fawning over a third-rate statist politician who has taken cruel advantage of human suffering and death for his own ends of self-promotion is, as you have noted, unsuitable to the high standards and ideals that were once held true by FEE.”

“For Mark to compare Rudolph Giuliani with Ben Stein is just plain silly.”

“Thank you for the article.  When I first heard that Skousen was the new FEE president I instantly foresaw all these things you write… about and I am not psychic.”

“A Great Institution in Freefall – Well said!!! Keep up the good work!”

“You have eloquently expressed the ideas and feelings of more people than you probably know. Thank you for publicly saying something that needed to be said.”

“I must say, you are right on!”

“The old FEE trustees I knew, men of honor, courage, conviction and standards like Bill Mullendore, Joe Pew, Bill Umstadt, Vince Lanfear, Ben Moreell, Jeff Coolidge, Ed Opitz, and others, would have never stood idly by and allowed a tragedy like this to be played out.”

“Thanks for your article….   I really don’t like to see FEE get into bed with guys like Rudy.”

“Like you, I am skeptical that an ‘outreach’ effort will garner converts to libertarianism. Baiting the hook with interventionists like Giuliani will attract attention, but not libertarian-minded audiences. I think Mark’s on the wrong track; and, I hope he realizes it soon.”

“I am disturbed to read of the apparent changes in the way that FEE is carrying out its mission.  It was the purity of purpose in the old FEE that originally appealed to me and got me involved with it in Leonard Read’s day.”

“I was very sad to read your column about FEE, but thank you for the report.”

“Even a cursory examination of Leonard Read’s policy makes it abundantly clear that he strictly and consistently opposed the reform school agenda that is now being operated at FEE.”

“Keep your finger in the dike, help is on the way!”

“Thank you for your article on FEE. I suspected something was amiss, but until your article, did not have the details. I agreed with you 100%.”

“Leonard Read did not solicit contributions. Money came in because he was doing the right thing.”

“In freefall, a net is of little help, no matter how broad. What is more useful is a ParaCommander chute with an Invader reserve. Unfortunately, FEE is in freefall at terminal velocity and, tangled in its own Skousen-made retiary, is unable to deploy either the main canopy or the reserve to save itself.”

“Your closing paragraph says it all. I submit that FEE has crossed the line and that things will not turn around.  Mark may well get his ever so wanted notoriety and will doubtless turn FEE into a CATO look-alike, with Mark, of course, at the helm. When the Las Vegas ‘show’ was announced I concluded then that it was all over but the shouting. Pity. Leonard Read would in no way recognize the ‘new’ FEE.”

“It is an embarrassment to see the ideas of Leonard Read being submerged like this, with the duty officer in charge now so desperate as to grasp at any straw, like a drowning man breathing his last, not going down with the ship, but taking the ship down with him.”

“I appreciate your thoughtful observations….”

“Your article has not fallen on deaf ears. I have withdrawn my support from FEE.”

“Leonard Read’s and FEE’s former sound policy always opposed operating FEE as a reform school.”

“FEE is history as far as I’m concerned.  Thanks again for the article.  I did not know they had so many losers at their Nevada fest.”

“Would you be interested in having [your FEE in Freefall] posted as an article? It’s really good.”

“Leonard Read would have been pleased with the courageous, no-compromise-with-evil stand you have taken.”

“As in ‘The Emperor’s New Clothes,’ you have pointed out that the Emperor is naked, which in turn has prompted others who were playing along with that farce to now realize that they had not used rational reason but instead had been intimidated and flimflammed by slick talk in a noisy, boisterous, circus-like atmosphere.”

“Please don’t give up on FEE yet.”

“According to Leonard Read and FEE’s corporate charter, FEE’s ‘sole purpose’ is ‘information and education…,’ founded to expose ‘pernicious ideas,’ which you have done ably and well in your writings.”

“Leonard Read and FEE sought only quality, never quantity.”

“Read’s personal motto was, ‘Go only where called.’ Self-improvement was the idea, to improve yourself first, not the world, because if you add one improved unit to the world, yourself, you have in fact changed the world for the better, and others will then seek you out, to learn from your good example. Read stressed these and other excellent ideas in his book, Elements of Libertarian Leadership, which, as you have said, FEE has taken out of print.”

Attorney Stephan Kinsella and writer J. Neil Schulman also weighed in with reactions.

________________

I soon followed up with a second article.

A Great Institution in Freefall Seeks Quantity, Not Quality

by J. H. Huebert
July 22, 2002

It must first be understood that morals are not determined by a show of hands.

Since the publication of my previous article, “A Great Institution in Freefall,” letters have poured in expressing disappointment in The Foundation for Economic Education’s betrayal of its original mission by honoring the likes of Rudolph Giuliani in an attempt to reach out to the masses.

But the couple now operating FEE remains undaunted. Mr. Skousen’s wife posted a reply on FEE’s website, essentially conceding that FEE has turned its back on the ideas of its founders in an effort to reach greater numbers. As Mrs. Skousen put it:

[W]hen [Mr. Huebert states] that “reaching the Remnant, not the massman, [is] the libertarian way,” we at FEE vehemently disagree. We want to take the ideas of liberty to the public, because that‘s where these ideas are needed most. And if using Rudy Guiliani’s name will help us attract large numbers, then that’s what we will do.

The question is, attract large numbers of what?

To provide an example of the sort of person the new FEE “reaches out” to, Mrs. Skousen wrote:

We chatted a few minutes, and then she said, “[Your daughter] said you have Rudy Giuliani speaking at a dinner you’re giving in the fall. Wow!! What exactly do you do?”…. Suddenly she realized: FEE must be important, to attract someone of Giuliani’s stature.

So this, apparently, is who FEE now targets: the masswoman who oohs and aahs and coos at political titles, thinks that “importance” is measured by political power or stardom, and believes that you must be “important” if you’re willing to shell out an enormous amount of money to have Rudy Giuliani come give his canned speech on his own greatness to your club.

With so many rational but lost and lonely young minds in the world that are hungry for truth, why would you spend your time and money trying to drum watered-down free-market ideas into the mind of such a sheep? And what would make you think that this sort of person won’t be even more impressed by the next group that comes along, that not only attracts big-name political speakers, but also has, say, bumper stickers with amusing slogans? Then the only way to compete with that will to be to up the gimmicks more, while watering down the message further. The result: more hucksterism, less learning. The precise opposite of what Leonard Read had in mind for FEE.

Contrary to the vision of its founders, today’s FEE is big on hucksterism and carny gimmicks. For example, Mr. Skousen’s latest fund-raising idea is the “1776 Club,” to which you are invited to donate any amount of money that has any part of the number “1776” in it. And if you gave $1776.00 at the National Convention, you got to ring a liberty bell 21 times, in front of everybody in the convention hall. It’s an old sales trick, and it works because, believe it or not, that sort of thing gets many dysfunctional people excited. It’s also certain to send a member of the Remnant running in the opposite direction. But Mr. Skousen wants the masses; Mr. Skousen wants money; and, perhaps most of all, Mr. Skousen likes to make noise, so on it goes, the needs of the Remnant ignored.

For further evidence that today’s FEE prefers making noise to making sense, consider what Mr. Skousen billed as his “soon-to-be-famous irreverent tour of the bookstore.” In this much-touted convention event, FEE’s new president walked through the Laissez-Faire Books tables in the convention’s exhibition hall, microphone in hand, and, carnival barker style, made inane comments and unsuccessful attempts at humor about the various titles, in a way that would convey almost nothing of any value to a serious student. The number of people actually interested was slim, but all in the exhibition hall were forced to listen. I observed the more dignified libertarian scholars just close their eyes and shudder.

Still, Mrs. Skousen insists that FEE’s educational programs are “booming,” pointing to the 900 paid attendees at their Las Vegas convention as proof. But attracting a crowd and educating are two different things. The old FEE drew serious students who wanted to learn, because that was the only reason to seek out FEE and come to its programs. But when you lure people with a glitzy location and the possibility of meeting and greeting celebrities, you’re no longer necessarily attracting minds that have any desire to learn, but instead are most likely drawing many people who just want to see, be seen, and have a good time. If successful education were about how many people you bring in, government schools would be the world’s greatest success story.

Besides, if FEE really wanted to attract attention, the Skousens could always hire an ecdysiast to go behind the glass wall on the Today show, hike up her skirt, and pull down her undergarments, with FEE’s web address undulating sensuously somewhere in the middle of it all. So why not do that, if it’s all about numbers?

In response to my original column, aside from Mr. Skousen’s emotionally-charged reaction, I received only one other piece of negative e-mail. This correspondent wrote, among other things, that he used to disapprove of Giuliani as much as I do, especially because of Giuliani’s shameless political opportunism throughout his career and his ruthless prosecution of the heroic Michael Milken. But that’s all changed now, he said, because of Giuliani’s performance after September 11, and because Ben Stein explained in his talk at the FEE Convention that Michael Milken deserved to go to jail.

I don’t know why Giuliani’s 9-11 performance makes him worthy of respect—what would he have had to do differently to not have performed well? More importantly, this person’s letter illustrates FEE’s steep slide down the slippery slope: Ben Stein has a few “free-market” credentials, yet cannot be considered anything close to a libertarian. But because he’s a celebrity and an accomplished, likeable guy, no one complained much about his appearance. Then, Stein used the forum FEE provided to express an anti-libertarian idea (that laws against insider trading are somehow morally acceptable and appropriate), which lodged itself in at least one otherwise-libertarian convention-goer’s mind. Then Mr. Skousen invited Mr. Giuliani to speak, and the idea that Michael Milken was an evildoer who deserved Red Rudy’s politically opportunistic attacks was firmly cemented. That is the price of compromise and the desire to draw the masses at any cost.

Despite these ill effects, the Skousens continue with a religious fervor, arguing that, with themselves at the helm, FEE is in a position to heal the world:

When another teacher of new and controversial ideas was criticized for socializing with “publicans and sinners,” he responded, “they that are well hath no need of a physician, but they who are sick.” Similarly, we are willing to eat with publicans and sinners (if that is what you want to call those who admire Rudy Giuliani) because we think that we have the power and the skills to heal them of their misguided thinking.

That may sound pleasant, but it would take a large leap of faith indeed to believe that FEE will somehow sway the heretofore ignorant masses either with powerful arguments or by chanting things like Mr. Skousen’s “AEIOU.” If making your ideas win were a matter of just getting the word out, our job would be relatively easy. But the task before true libertarians, identified by Leonard Read in Elements of Libertarian Leadership, is more difficult because it’s a never-ending job of self-improvement, of rationally recognizing that there is but one unit of society that we can improve for certain, and that is ourselves, and that this is a full-time job.

For that reason, Leonard Read, Edmund Opitz, and FEE’s founders always held firm to this principle: “No missionary work.” The new FEE, however, literally wants to do missionary work. At his closing speech at the Las Vegas convention, Mr. Skousen announced a “FEE Ambassador” program. Participants in this scheme will get special training at FEE headquarters, then return to their communities, where they will invite friends and neighbors into their homes to hear the Good News about liberty. This is another old sales trick, also popular among religious groups, particularly the more cult-like sects, sure to rope in the weak of mind, and sure to disturb the Remnant. As Albert Jay Nock noted in his essay, “Isaiah’s Job”:

[One] certainty which the prophet of the Remnant may always have is that the Remnant will find him. He may rely on that with absolute assurance. They will find him without his doing anything about it; in fact, if he tries to do anything about it, he is pretty sure to put them off.

Unlike Nock, the powers that be in Irvington-on-Hudson appear to fail or refuse to understand that quality is more important than quantity in matters of genuine education. The masses may show up, cheer, and even give their money, but will learn little in a reform school setting. And, as always, the Remnant will remain quietly in place, looking for a worthy prophet, and all the more frustrated by the sudden lack of any support at FEE.

________________

These articles did not go unnoticed by FEE’s Board of Trustees. As I later learned, they were distributed to each one of them. As it turned out, most were less than enthusiastic about receiving the “honor” of Rudy Giuliani’s presence —and about Mr. Skousen’s agenda for FEE. Presumably the people who read my piece and threatened to withdraw their financial support from FEE had some influence upon them as well.

Thus, in October 2002, the Trustees decided that FEE needed to get back on the track Leonard Read wanted it to be on. They canceled the Giuliani event and fired Mr. Skousen.

Still, with some help from his friends, Mr. Skousen had the Giuliani event on his own, and got the desperately desired photo-op that cost him his job.

I’ve been told by various sources who are in a position to know that my articles played a role in setting these events into motion. If that’s true, then I’m glad I could be of service to the cause of liberty and to the institution to which I owe so much.