(Archived document, may contain errors) Waging the War of Ideas:
Why There Are No Shortcuts By John Blundell My goal today is to set
a broad historical scene and remind us of those who fought in the
trenches for freedom in the 1940s, '50s, -and '60s. I will d 'raw
on the. strategic insights of F. A. Hayek and describe how those
insights influenc e d the intellectual entrepreneurs of the era.
Finally, I will draw some general insights and conclusions for the
years ahead. At the end of World War II, classical liberal
proponents of the market order were a be- sieged minority on both
sides of the Atlan t ic. In the United States, the Great
Depression, the New Deal, the war, and the ascendancy of Keynesian
thought had all but totally undermined the classical liberalism of
the Found- ing Fathers. In the United Kingdom, government
intervention in the economy had reached unprece- dented heights.
The troops who had at the end of World War I been promised "A Land
Fit for Heroes" had suffered the depression of the '20s.nis time
the returning troops were determined not to be "cheated." The
"People's War" - so call e d because so many had been involved -was
to become the "People's Peace": as in war, so in peace, namely, the
govern- ment would run everything, and in 1945 the Labour Party
decisively swept Churchill aside to take power. It is against this
background that I start with the publication in March 1944 of
Hayek's 77ze Road to Serfdom, a book totally against the tide of
the times. Powerful Attack The Road to Serfdom was a powerful
attack on socialism and an elo- quent plea for a liberal market
order. On both sid e s of the Atlantic it attracted tremendous
attention. Within fifteen months it was reprinted five times in the
United Kingdom despite wartime priorities, shortages, and austerity
standards. In the U.S., following the University of Chicago's
edition, a cond ensed version appeared in Reader's Digest and it
became a selec- tion of the Book-of-the-Month Club. And in both the
UX and the U.S., social scientists were moved to write not reviews
but book-long responses, Wootton in the UX and Finer in the U.S. 1
John Blundell is President of the Institute for Humane Studies,
George Mason University, Fairfax, Virginia. He spoke at The
Heritage Foundation on November 14, 1989, in the Resource Bank
series of lectures featuring leaders of conservative public policy
organ izations. ISSN 0272-1155. 01990 by The Heritage
Foundation.
1 B. Wootton, Freedom Under Planning and H. Finer, 77ze Road to
Reaction.
Among the many who were influenced by The Road to SeijWom, I
single out four people: Harold Luhnow, Leonard Read, and F.A.
Harper in the U.S., and Antony Fisher in the U.K.
Let us start with Harold Luhnow. In the 1920s and 1930s, Luhnow
worked for his uncle William Volker in Volker's Kansas City-based
wholesale firm. 2In 1932, Volker had estab- lished the William
Volker Fu nd and in 1944 Lulmow succeeded him as the Fund's presi-
dent. Luhnow had-already been exposed to classical liberal thought
through Loren Miller. Miller incidentally wii intimately acquainted
with su6 inio6ftafit bd\u223\'a7ftT6\u223\'a7 9 intellectuals as
Jasper Crane of DuPont, B.E. Hutchinson of Chrysler, Henry Weaver
of GE, Pierre Goodrich, the Indianapolis businessman and creator in
1960 of Liberty Fund, and Richard Earhart, founder of the Earhart
Foundation. Key Question. On reading The Road to Seiydom, Luhnow
became a thorough-going classi- cal liberal and, as head of the
William Volker Fund, was able to contribute financially to the
cause of liberalism. In 1945, he met Hayek and was instrumental in
bringing him to the University of Chicago soon thereafter. To
Luhnow , as well as Read, Harper, and Fisher, the key question was:
What should we do? What strategy should we adopt to change the
course -of society? Hayek's answer can be found in a number of his
articles of the time, in particular: "His- torians and the Future
of Europe" (1944); "Opening Address to a Conference at Mont
Pelerin" (1947); "The Intellectuals and Socialism" (1949); "The
Transmission of the Ideals of Economic Freedom" (1951); "The
Dilemma of Sgecialization" (1956). All are reprinted in his Studies
in Philosophy, Politics, and Economics.
The key strategic insights from these writings can be summarized as
follows: 1) Socialism came into ascendancy partly because of the
failure of liberalism to be a seemingly relevant, living, inspiring
set of ideas. Li beralism needed reviving and toward this end,
Hayek viewed his creation of the Mont Pelerin Society, an
international community of classical liberal scholars and other
intellectuals, as a critical first step. 2) History plays a major
role in the developme n t of people's political philosophy. For
Hayek, "nere is scarcely a political ideal or concept which does
not involve opinions about a whole series of past events, and there
are few historical memories which do not serve as a symbol of some
political aim."
2 For more information on Volker, see Herbert Cornuelle's
biography, Mr. Anonymous, Caxton Printers, Caldwell, Idaho, 1951. 3
University of Chicago Press, 1967. 4 Capitalism andthe Historians,
RKP, London, 1954
2
Hayek agreed with an insight others had offered - that more
people get their economic opinions through the study of history
than through the study of economics. Hayek's key example in this
regard is the German historical school, which promoted the role of
the state and was hostile to spontaneou s order. To Hayek, it was
very much responsible for creating the atmosphere in which Hitler
could take power.
3) Practical-people who concern -themselves solely with current
day-to-day problems tend to lose sight of, and therefore influence
on, the long ru n. This is because of their lack of idealism. In a
paradoxical way the principled, steadfast ideologue has far greater
long-term influence than the practical man concerned with the
minutiae of today's problems. 4) Never become associated with
special inte r ests and beware of "free enterprise" policies that
are neither free nor enterprising - or as Arthur Seldon of London's
Institute of Economic Affairs (IEA) says, "Beware of 22 giving
politicians dangerous toys. 5) Do not go into politics where you
will bec o me imprisoned in a slow process whose outcome was
already determined decades ago. Instead, look for leverage in the
world of ideas as a scholar, intellectual, or intellectual
entrepreneur. 6) Over the long run, it is a battle of ideas, and it
is the intel l ectual - the journalist, novelist, filmmaker, and so
on, who translates and transmits the ideas of the scholars to the
broader public - who is critically important. He is the filter who
decides what we hear, when we hear it, and how we hear it. 7)
Histori c ally - and here I believe Hayek might change his tune a
little if he were writing today - a high percentage of the most
able market-oriented people have tended not to become intellectuals
or scholars but rather businessmen, doctors, engineers, and so on.
On the other side of the debate, a high percentage of the most able
socialists - disgruntled with the course of history -became
intellectuals and scholars. 8) Finally, and here I quote the whole
of the last paragraph of "The Intellectuals and Socialism":
T he main lesson which the true liberal must learn from the
success of the socialists is that it was their courage to be
Utopian which gained them the support of the intellectuals and
therefore an influence on public opinion which is daily making
possible w h at only recently seemed utterly remote. Remember that
Hayek was writing in 1949. He goes on: Those who have concerned
themselves exclusively with what seemed practicable in the existing
state of opinion have constantly found that even this has rapidly
bec ome politically impossible as the result of changes in a public
opinion which they have done nothing to guide. Unless we can make
the philosophic foundations of a free society once
3
more a living intellectual issue, and its implementation a task
which challenges the ingenuity and imagination of our liveliest
minds, the prospects of freedom are indeed dark. But if we can
regain that belief in the power of ideas which was the mark of l i
beralism at its best, the battle is not lost. The intellectual
revival of liberalism is already under 95 way in many parts of the
world. Will it be in time. To summarize Hayek's message: Keep
liberal thought vibrant and relevant; recognize the importance o f
history; be principled and steadfast;-avoid special interests;
eschew politics and instead search for leverage; recognize the
critical role of the intellectual; and be Utopian and believe in
the power of ideas. This was the advice Hayek gave Luhnow, Rea d ,
Harper, Fisher, and others. How did they translate that advice into
action? .The Volker Fund, with Loren Miller and the strategic
insights of Herb Cornuelle -who was later to become Vice President
of Dole, President of United Brands, President of Dil- l i ngham,
and to serve on the Board of Directors of the Institute for Humane
Studies (IHS) -pursued a number of strategies: First, it supported
key world-class scholars who at that time could not obtain
positions in American universities. The list includes H a yek,
Ludwig von Mises, and Aaron Director - what a comment on the
intellectual climate of the time! Second, it helped the then small
minority of classical liberal scholars to meet, discuss, and
exchange ideas. Friedman's Capitalism and Freedom, Leoni's Fr e
edom and the Law, and Hayek's Constitution of Liberty all evolved
from such meetings. One can also clearly trace the origins of both
Law and Economics and the Public Choice school to early Volker
programs. In the same vein, Volker put up the funds that en a bled
the North Americans to have such a strong presence at the first
Mont Pelerin Society meeting in 1947. Third, it employed the
strategy that IHS was later to adopt from 1961 on, namely to iden-
tify talented young people interested in the ideal of a fr e e
society; qualify (i.e., get to know and evaluate) that talent; and
finally support, nurture, and develop that talent. Fourth, it
published the Humane Studies Series of books at a time when
classical liberal scholars were spurned by publishers. These boo k
s were distributed to almost all North American college and
university libraries by the National Book Foundation. Finally,
Volker encouraged the formation of complementary institutions,
among them: The Intercollegiate Society of Individualists (ISI),
late r renamed Intercollegiate Studies Institute; The Foundation
for Economic Education (FEE); The Earhart and Relm Foundations, and
finally IHS, theVolker Fund's strategic successor on its
expiration.
5 University of Chicago Law Review, Vol. 16, No. 3, Spring 1949.
4
Leonard Read established the Foundation for Economic Education
(FEE) in March 1946. Read had been a classical liberal since
knowing William Mullendore, Herbert Hoover's executive secretary,
in California. His early associates included Brown of GM, Goodrich
of BF Goodrich, Henry Hazlitt, and the Relm and Earhart Foundations
as well as Paul Poirot, William Curtis, and Ivan Bierley. Read
carved out an "educational" route. He had two goals, namely, to
recover the classi- cal liberal intellectual -t r adition and to
disseminate that tradition to the layman. He was remarkably
successful. He played a special role in the lives of many people
over many years. Indeed, it is safe to say that had it not been for
Read and FEE in the '40s, '50s, and '60s, those who followed and
expanded the efforts on behalf of the free society in the '70s and
'80s would have faced a much tougher battle. Cornell Fearful. F. A.
"Baldy" Harper was a professor of economics at Cornell University
when he, too, like Luhnow and Read, r e ad 77?e Road to Serfdom. He
promptly began using it in his classroom teaching at Cornell. I
vividly remember talking with his widow, Peg Har- per, in the
summer of 1983, about the reaction to Baldy's use of 77ze Road to
Seddom. She -described how one nigh t a trustee of Cornell, who was
a friend of Baldy's, came to visit them at their home and asked
that Baldy discontinue using 77ze Road to Serfdom in the classroom.
In the view of the trustees, its message was more than contentious
and, after all, Cornell, l ike so many private universities,
received and looked forward to receiving a great deal of government
funding. From that moment on, Baldy no longer considered himself in
any way tied to Cornell. He very quickly went to join Leonard Read
on the staff of FE E and by the mid-fifties had moved to California
to join the senior staff of the William Volker Fund. In 196 1, with
the Volker Fund due to expire, he made his third move, namely to
set up his own shop, to found the Institute for Humane Studies. In
this en d eavor, he was joined by people formerly associated with
Volker such as Leonard P. Liggio, George Resch, Kenneth S.
Templeton, Jr., and Dr. Neil McLeod; and among his earliest
business supporters were R. C. Hoiles, J. Howard Pew, Howard
Buffet, William L L a w, and Pierre Goodrich. Initially, the
Institute for Humane Studies continued many of Volker's programs
and was involved in conferences, publishing, and talent-scouting.
IHS inherited Volker's staff, ap- proach, and the strategy of Loren
Miller and Herb C o rnuelle. As the '70s ended, other groups
emerged to run conferences, and university presses and trade
publishers began to take a serious interest in the work of
classical liberal scholars. This left IHS free to concentrate on
its unique mission of talent s cout, and in recent years it has
homed in exclusively on identifying, developing, and supporting the
very best and brightest young people it can find who are (a)
market-oriented and (b) intent on a leveraged scholarly, or
intellectual, career path. Our fo u rth intellectual entrepreneur
is Antony Fisher who came across the condensed version of 7he Road
to Serfdom in Reader's Digest. A former World WarTwo fighter pilot
turned farmer, he sought out Hayek at the London School of
Economics. "What can I do? Shoul d I enter politics?" he asked.
5
"No," replied Hayek. "Society's course will be changed only by a
change in ideas. First you must reach the intellectuals, the
teachers and writers, with reasoned argument. It will be their
influence on society which will prevail, and the politicians will
follow." For close to ten years, Fisher pondered Hayek's advice. In
the late '40s he traveled to the United States and visited FEE.
While he finally selected a different approach, he learned from
Baldy Harper of a new agr i cultural breakthrough, the factory
farming of chickens, and, armed with an introduction from Baldy, he
traveled to the outskirts of Cornell and "met my first chicken
farmer." Within a decade, Fisher was Britain's Frank Perdue.6 His
widow, Dorian, later co m - mented to me, "He did more to put a
chicken in every man's pot than any king or politician ever did."
and in 1955 he incorporated the Institute of Economic Affairs in
London to make the case for a free economy to the intellectuals.7
He hired Ralph Harri s and Arthur Seldon - Britains "last two
economists who believed in free markets," someone joked - and the
IEA began to publish a stream of independent studies, written by
academics mainly, but couched in layman's language and accessible
to all .interested people. Their strategy was to avoid politics,
concentrate on the climate of opinion, and educate opinion leaders
on market alternatives. For twenty years Harris and Seldon
persevered, producing scores of well-researched monographs on
everything from housi n g to agriculture, welfare to exchange
controls. By the mid-1970s, it was clear that the consensus was
turning away from state planning and toward market solutions, and
it was also clear that the IEA was responsible. Thatcher Thanks.
Indeed, on becoming Pr i me Minister in the summer of 1979, Mrs.
Thatcher wrote to Fisher, "You created the atmosphere which made
our victory possible." And some years later, in a speech on the
occasion of the IEA's 30th anniversary, Mrs. Thatcher added, "May I
say how thankful w e are to those who joined your great endeavor.
They were the few, but they were right, and they saved Britain."
Starting in the mid-'70s the IEA model began to be copied around
the world, and Fisher found himself in great demand as a consultant
to such fle d gling groups. By the late '70s his mailbag was so
large that he incorporated the Atlas Economic Research Foundation
to be a focal point for intellectual entrepreneurs wishing to
establish independent, public policy in- stitutes. Today, Atlas
lists some 50 + institutes in some 30 + countries that it has
helped to establish, develop, and mature. It is against this
background that the explosion of interest in market ideas in the
'70s and '80s must be judged and understood.
6 As a result of his efforts, the price of chicken plummeted. 7
For a detailed, but short, history of the work of London's IEA, see
my "How to Move a Nation," Reason, February 1987, pp. 31-35.
6
Without the cast of characters I have described and many others
- John M. Olin, Randy Richardso n, Dick Larry, Jeremiah Milbank,
Dick Ware, Charles and David Koch, and so on - and without their
farsighted commitment, we would not be here today and we would not
be witnessing a world-wide move toward freedom and free markets.
Idea Vacuum. The temptati o n now is to think the battle of ideas
is won and all we need to do is to implement the rolling back of
the state. The Fabian Society in the U.K. made an analogous mistake
in 1945. Following Labour's huge victory at the polls that year,
its mem- bers rushe d into government and ieft a vacuum in
the'baftleifieild _ofTdFis_._71i1's permitted the IEA to grow in
influence unchallenged by a socialist counterpart until the
Institute for Public Policy Research was established in 1988. In a
very real sense, the batt l e of ideas will never be won. However
far we travel along the road to a free society there will always be
a temptation to backslide and thus there will al- ways be a job for
market liberals to do at all levels, from the practical to the
scholarly. In part i cular, we must ensure that liberal thought
continues to be relevant and inspiring. Liberal scholars must
continually take up challenging, cutting-edge work and strive to be
at the forefront of their disciplines. To draw on Hayek again, we
must retain "tha t belief in the power of ideas which [is] the mark
of liberalism at its best."
In no particular order, let me outline some strategic thoughts for
the '90s. Of course, I am assuming that all currently successful
initiatives or programs continue. 1) Practic al people who pursue
careers in business and the professions and who retain an interest
in ideas are rare. However, they do exist, and some are on the side
of market liberalism. In achieving change there is clearly an
important role for the "business inte l lec- tual." At IHS we have
started with Liberty Fund of Indianapolis a program of identifying,
and nurturing a network of such people - i.e., younger business and
professional people who are destined for top-flight careers and who
share a concern for libe r ty. It is from their ranks that I see
the future Loren Millers, Herb Cornuelles, and Randy Richardsons
emerg- ing. 2) For several decades now it has been fashionable to
fund economics. Despite the waste of some several hundred million
dollars, possibly on e billion dollars, on endowing chairs of free
enterprise, we have been winning in economics for some time. We
have also done well in law, philosophy, and political science,
although much remains to be done. History, moral philosophy, and
literature are a d i fferent matter, and while Hayek stresses
history I would stress all three as areas that our friends in the
foundation world should be demanding we tackle. 3) To the extent
that it is possible, we must identify the issues of the next
century and in- vest n o w in generating the people capable of
tackling them. Take the excellent people at the Political Economy
Research Center (PERC) in Bozeman, Montana. They have done pioneer
work in promoting the understanding of the role of markets and
property rights in so und environmental stewardship. Imagine for a
moment that PERC's funding had been many times higher. Imagine that
a whole succession of generations of graduate students, numbering
say 100 Ph.Ds, had come
7
out of its programs to teach, write for the leadi ng newspapers,
publish books, and so on. Clearly, the current debate on the
environment would be different. 4) We must never overlook or
underestimate the critical role of the filter of the intellec-
tuals, the people who translate and transmit ideas to t h e general
public. Pre-eminent among such people are journalists, but one also
thinks of the clergy, novelists, cartoonists, filmmakers, editors,
and publishers. Finding,- developing, -and nurturing young-people
who value liberty and seek such careers is t h e object of another
new IHS program, directed by Marty Zupan. However, we must not
overlook the potential for our scholars in this area. Once tenured
and well on in their disciplines, our scholars should be encouraged
to come out of the ivory tower and jo i n in public discourse. They
should not do this early in their careers - it will damage their
chances of promotion. But at the right time they should be
encouraged to fol- low in the footsteps of Milton Friedman, Robert
Nisbet, and Michael Novak. 5) We mus t be alert to the danger of
allowing the "free enterprise" tag to be given to policies that
while somewhat market-oriented are certainly not free enterprise. A
classic here is the growth of contracting out, that is of
governments' issuing exclusive contrac t s to firms to do a job
previously undertaken by directly employed labor. I have cataloged
else- where the problems inherent in such a situation. 8 Today, I
simply want to note that contracting out is not free enterprise.
Yet when con- tracting out runs in t o problems, free enterprise
gets a bad name. 6) Finally, I want to reiterate Arthur Seldon's
point about giving dangerous toys to politicians. Here let me
contrast four recent policy developments: denationalization,
contracting out, enterprise zones in th e U.K., and airline
deregulation in the U.S. U.K. denationalization and U.S. airline
deregulation have both been successful. Enterprise zones and
contracting out in the U.K. are, respectively, a total failure and
problematic. The two successes were both ba s ed on well
researched, well thought-out papers, articles, and dissertations.
For years, if not decades, scholars and other intellectuals had
debated and discussed every aspect of both reforms. As early as
1973 in the U.K., I can remember ar- ticles on and discussion of
how we should denationalize through a program gf widespread stock
ownership and many of the other techniques of the mid- and late
'80s. These and various other articles paved the way for the
reforms of recent years in the U.K. Similar debate s took place
here in the U.S. on airline deregulation. The result of such
rigorous examination was a pair of sound strategies.
8 "Privatisation Is Not Enough,"Economic Affairs, April 1983 and
"Privatisation -by Political Processor Consumer
Preference?,"Econornic Affairs, October-November, 1986.
9 See, for example, Goodbye to Nationalisation, edited by Dr.
Sir Rhodes Boyson, Churchill Press, 1973 and Russell Lewis's
chapter, "Denationalisation" in 198.5.- An Escapeftvm Orwell's
1984, edited by Dr. Sir Rhodes Boyson, Churchill Press, 1975.
8
Let's contrast this with enterprise zones and contracting out in
the UX Both ideas sud- denly appeared on the policy agenda in the
late '70s and both were being implemented within a couple of years.
In neither case was there more than derisory discussion of poten-
tial problems. The result: a pair of flawed strategies.
The story I have told of men such as Hayek,-Lulmow, Read, Harper,.
and Fisher is a story of heroes. 11eir courage and persistence are
inspiring.- So too are the patience, foresight, and strategic sense
of the many other individuals I mentioned. They built a solid base.
As long as we are not duped into believing either that the bat tle
is won, or that we can now employ shortcuts, the future for a
society of free and responsible individuals is indeed bright.
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