Hello and welcome to the Cato podcast. I'm Ian Vasquez, Vice President for International Studies here. Last week, Ed Crane, the co-founder of the Cato Institute and its longtime president from its beginnings in 1977 to 2012 when he retired, passed away. Ed leaves behind a huge legacy, both in terms of building Cato into a leading think tank and in terms of the broader classical liberal movement. I will be speaking about Ed and his legacy with my colleague Jim Dorn, Cato Senior Fellow Emeritus and a longtime editor of the Cato Journal. Welcome, Jim. Thank you, Ian. And I'm also joined by Aaron Steelman, Cato Senior Fellow and Policy Advisor. Welcome, Aaron. Thanks, Ian. All three of us knew Ed for decades and worked with him in various capacities for many years, with Jim Dorn going back the furthest in time. Before we talk about Cato's founding in the 1970s, I thought I would ask Aaron to tell us a little bit about what the libertarian scene was like in the 1970s, or at least what was Ed Crane doing before starting the Cato Institute? Yeah, there wasn't much of a libertarian movement at all when Ed entered it formally. I should say that Ed went back to the Barry Goldwater campaign in 1964. That's when he first got active in or interested in electoral politics. but he had been sort of converted, I should say, to libertarianism by Rose Wilder Lane and Ayn Rand previous to that. He kind of fell out of electoral politics until 1971 when the Libertarian Party was formed, and he was one of the—I think there were fewer than 100 people who attended the first convention in Denver. and uh the libertarian party actually was libertarian movement was so small at that point that uh the lp had offered the nomination to murray rockbard and he just hung up on them thinking that they were a bunch of crags that's like why would we possibly form a libertarian party at this point um it turned out that john hospers actually got one electoral vote uh that year from a defector, someone who had pledged to vote for Richard Nixon, and that was Roger McBride. And Roger was the 1976 candidate. Ed ran that campaign, and during the time that he ran that campaign, he was in Washington. And while he was in Washington, he looked at the effect that AEI and Brookings had on influencing opinion, and he went back to San Francisco and thought, You know, we need a libertarian institution. And with Charles and Murray, Rockward, Cato was founded. And I think, so Cato was there from 1977 to 1981. And it's, it's grown to, and moved to Washington in 1981. and cato has grown to a um i think that ed probably couldn't have even imagined what cato is today uh even sort of his most optimistic uh scenario back then so ed became a libertarian at a very lonely time for libertarianism uh stuck with it through a long period um and helped to nurture it to a point where the word libertarian is actually no people understand what it means and uh our ideas the ideas that ed had when he founded co-founded cato those ideas are within public debate now i think that would have been unimaginable in you know 1971 1972 when ed first formally got involved in the libertarian movement yeah i i uh i know that uh he used to talk about those early days of libertarianism. And he gave an interview to Liberty Magazine some years ago when he talked about the first time he went to the Libertarian Party Convention in Denver in 1972. And he said, as a libertarian, I had always valued diversity and the right to an alternative lifestyle. But until I walked into that room, I had no idea just how many alternatives there really were. Yeah, I'm sure that's probably true too. When you go back and you look at libertarian publications from that time, they, uh, you know, they, they have the flavor of, of the new left at its kind of worst, um, in some, in some ways. And, you know, Ed, Ed has another famous line from that period where, you know, he said, look, libertarians need to get professional. It's, uh, it's not radical to go up on a hill and plant a black flag of anarchy. That's just silly. You know, it's not radical. You're not going to get anywhere. So, yeah. So Ed's, Ed's, uh, as line that he pushed was a reasonable radicalism, a radicalism that was presented in a reasonable way, in a way that the median American could at least understand, if not adopt as a view of their own. Jim, you were there from the early days of the Cato Institute. What was it like? Tell us a about Cato moving from San Francisco to the belly of the beast. And as you said, Ed recognized that to become a widely recognized institution, Cato had really moved to Washington. And he had to get relationships moving with the dealers in information, the journalists and others in Washington. and when I was looking over my notes and so forth, I worked for Ed for 30 years. I actually started in late 1981 before we even moved into the Waterston House. We were in Jules Herbert. He was a friend of Ed's. He had an office across from where Heritage is now on Massachusetts Avenue. It was just a little office and Ed actually interviewed me there in late 81 and took me into a back room. and there was a little bed with a mattress with the stuffing coming out. And Ed sat on a chair with his sweater on the back and I sat on the bed. And that's how I was interviewed. And later on, he said, Jim, you probably thought, what am I getting into? But it was wonderful working with Ed. He was devoted to, as you know, libertarian principles 24-7. He was always talking about it. I wanted to also start with just something that I think our listeners may be interested in, and that is when we moved to the new building, well, we moved into the Waterston House, as you said, back in 1982, actually in January 82. But then Ed had bigger plans. We moved out of the Waterston House in May 1993 into our new building on Massachusetts Avenue. And that was a huge boost for Cato's basically widespread visibility. And the first time we got really attention from the Washington Post was in the style section in May 1993 when we held our big bash at the Washington Hilton on May 6th. They ran an article in the style section, and I wanted to quote something from that article because it shows it's really an interesting insight. The Post said, quote, In this capital that respects power far more than ideas, it is easy to poke fun at any institution that follows its principles wherever they may lead. But Cato cannot be so lightly dismissed. Since its founding in San Francisco in 1977, Cato has managed to remain faithful to its ideals. And that's primarily because of Ed and, of course, David Bowes, who was one of Ed's first hires back in San Francisco. So Ed was persistent and consistent in holding to the principles of individual freedom and limited government and just rule of law protecting persons and property And he knew that if individuals are free to choose, the dynamics of a free market would lead to harmony and prosperity compared to top-down central planning and government coercion. So my background was when I went to University of Virginia for my doctorate. I focused on comparative economic systems. And of course, Ed was a big fan of Hayek as well as Mises. And we decided to have a conference first in China in 1988. And Milton Friedman was there and he was treated like a rock star. And then Ed also had conferences in the Soviet Union. The first conference in the Soviet Union was called From Plan to Market, which was held in Moscow in 1990. and food was brought into the conference in armored vehicles. That gives you an idea of what it was like at that time. And it was evident that the collapse of the Soviet Union was imminent. And Ed recognized this as early as 1981 when he traveled to the Soviet Union, and he observed the poverty of spirit and the low standard of living. And so Ed had great insight, I think, into how Cato could really influence the market and ideas. And we'll talk more about some of the conferences later on, but I just wanted to make some of those points to begin with. And I'd like to interject on the building. Of course, you guys were already working there when the building opened in 1993. I was an intern in the summer of 1994. And I mean, the building was pretty impressive. I mean, I had worked at a libertarian magazine, Liberty Magazine that Ian mentioned earlier. And that was run out of Bill Bradford's house. And this was one of the two major libertarian magazines that we had in the country. So coming to Cato and seeing this building, which of course I knew what it looked like, was pretty impressive. And then when he got in, I remember, uh, so we had six floors at that time and the building was only about half as large as it is now. Um, but two of the floors were completely unoccupied and I thought, Hmm, Ed must have plans for this to grow. Ed and David, sure enough, uh, they did and, uh, it, it worked out, uh, very well. Yeah. Yeah. I mean, the building was a statement. It was a statement to Washington, D.C. It was a statement to the nation. And, you know, it it really confirmed once again what what David Bowes would always say that that Ed was a visionary. You know, he he was the one that saw the potential of bringing libertarian ideas under one roof, presenting them in a serious way, in a policy relevant way. And because of that, making them a force to be reckoned with the national politics and the national policy debate and and beyond. And, you know, one of the ways that he did that is by insisting that all of Cato's work be of the highest quality and that we always stick to principle. And I think that that has gone a long way in reviving the libertarian tradition that this country was based on and was founded on, and also on drawing attention to what really are universal principles from people around the world, including libertarians who felt especially lonely in other parts of the world. in countries that don't have the same tradition of individual liberty and civil society that the United States has. It can be a very lonely situation, even more so if you're living under a dictatorship as a libertarian. And so the founding of the Cato Institute really did make a difference in a lot of people's minds. For libertarians around the world and others, it became a model. It made them realize that they're actually not alone. And, you know, for that reason alone, I've always considered the Cato Institute a global think tank because of the reach, the widespread appeal and the universal values that Cato presents. Yeah, Ed was a tremendous entrepreneur in the market for ideas. having that first conference in China in 1988 was an incredible feat because it was probably the largest free market conference that had ever been held in China. And they were at a point where it was possible to have a conversation because things were liberalizing at that time back in 1988. One thing I should point out at that conference, which took some guts, is—well, it wasn't at that conference. I actually had a later conference, because we had several conferences in China. But Ed had the ingenious idea to show a video in which Mao's face morphed into Friedman's, to the astonishment of members of the Chinese Communist Party. he could have been thrown he'd be thrown in jail today for that and then at the Soviet conference that was a pioneering effort as well and we had an open forum there with over a thousand people and a lot of these people came in off the streets and Eugenie Primakov who was at that time a member of Gorbachev's presidential council and later became prime minister, Ed presented him a bust of F.A. Hayek. And the audience loved that. And we had these little pins at our first conference, said capitalism is something else on them, but they love pins over in the communists. And all these communists were on the elevator in the first conference and wearing little Cato pins with capitalism on it, which was pretty hilarious. But Ed Kent would come up with these things all the time. And I must say that his Christina Crane did a tremendous job in helping to organize those events and other events. And she was a backbone of Cato. So, you know, we were lucky to have Christina with us as well. I remember Ed saying when he gave that bust of Hayek to the Soviet Aperichik, the guy responded, he said, well, Ed said, I hope you'll put this in a place of prominence. And the Soviet official said, well, I'll give you a bust of Lenin and you can put it anywhere you want and ed said i think i knew where he wanted me to put it uh which was you know a bit of ed's sense of humor um but going back to um there's something i should have said earlier and jim touched on um ed's ideological entrepreneurism yes he had a vision for for the libertarian movement to grow and for cato to grow but he was willing to cut his losses when uh when it was required. I mean, so in the late 70s and early 80s, Ed was head of what his opponents in the libertarian movement called the crane machine, but he reluctantly adopted that as a moniker himself eventually. But at that time, he headed Inquiry Magazine, Libertarian Review, Students for a Libertarian Society, and other groups, all of which by the early 1980s had dissolved. He and Charles Koch had decided, look, these are not good returns on investment. We can do better. And many of those resources were funneled into Cato to make Cato the sort of flagship institution, which proved to be a good idea. So Ed wasn't interested in growth just for growth's sake. he was interested in growth to promote ideas, the ideas that he devoted his life to. Yeah and he always had an international view of these ideas You know he was tremendously proud of the conferences Jim that you did in China and Soviet Russia because it was the first time that a Western think tank had done anything like that And then so that, you know, by the time he hired me 1992, Cato had already done those big international conferences. And my first assignment that year was to do a major conference, the biggest yet that Cato had organized in Mexico City with our friend Roberto Salinas Leon, in which we brought Milton Friedman and the top libertarians of Latin America and the hemisphere for a multi-day conference. That was really a powerful moment for Cato. It got tremendous attention, and I realized a couple of things. One is just that the platform that Ed created could have such a huge profile. Only Cato could have organized something with that impact. I mean, Friedman was treated like a rock star. And for some reason, Ed asked me to do a press conference with Milton Friedman to sit alongside him and Ed and a couple of other people, because I was the person on the Cato staff that spoke Spanish. And at that press conference, which was, of course, packed, I learned something else very powerful, which is that Cato's promotion of ideas and policy change many times, because what we're promoting is considered radical inside the beltway, maybe common sense outside of it. we take a medium to a long-term view on policy change and on changing the world. And I remember, you know, Milton Friedman was greeted as a hero at that time. And in typical style, at his press conference, he proceeded to criticize three things about Mexico. One of them was that Mexico should privatize a state-owned oil monopoly, which was a heresy at the time. The other one was that the drug war should end. And finally, the other one was that the pegged exchange rate system should be liberalized or they're going to have a big problem, which eventually happened two years later, of course. But the point I'm making is that at that time, he was highly criticized in Mexico for saying that. And yet, years later, that became very much a part of the public policy debate there, including moves to reform and privatize the energy sector, moves toward drug legalization and discussions about that. and, of course, a move away from that pegged exchange rate system, which caused the big Mexico-Peso crisis. And Ian, of course, Ed's early work on Social Security privatization was really pioneering with Peter Ferrara's book and many studies after that. And also, as you said, he introduced all these other programs. We can only scratch the surface here, but there are numerous programs. And we were in the Waterstein house. We ran out of room, of course, and they had a little building behind us, as you remember, the annex. You had to come back down through the fire escape if you wanted to get out of there or the main building. So we knew we were crowded there. And in Moscow, when we had that conference, it was incredible because things were liberalized. And you could see that the whole place was just collapsing. And in China, there was a great opportunity for liberalism. Of course, that was crushed in Tiananmen a year after the conference. We published a book in China, but it couldn't come out until several years later after Deng Xiaoping's Southern Tour. I think it came out in 1993. And on the cover of that book, it was in Chinese, of course. The cover had a picture of the Great Wall, and below it was the picture of the Goddess of Liberty that was in Tiananmen Square. And I was amazed because I went over there to get some books and give some lectures at Fudan University, which co-sponsored the conference. So we had influence there from the get-go. Of course, what's happened in China, and especially Hong Kong, is not good news for liberalism. But as you said, Ed always looked at the long run. You know, he was patient. That's why he always liked to distinguish between political society and civil society. Political society is run by the government through coercion, whereas civil society is based on individual freedom and choice. And he gave many talks on that. And I actually directed a project for him for a couple of years on civil society. So, you know, and of course, Ed would joke around, say, Cato stands for training the others. But he understood that, as you said, that he always hired very capable people. And if you didn't want to work overtime and be at Cato and be involved all the time, you weren't really a Catoite. So people that worked at Cato and still work at Cato are very dedicated. And Ed's enthusiasm for liberty was really contagious, as well as David Bowles, of course, was instrumental. He looked over day-to-day policy, and he and Ed, you know, were the pioneers for Cato, for sure. Yeah, I think Ed and David were, temperamentally, they were quite different. But in terms of work partners, they were almost a perfect pair. Ed could devote his energy to fundraising, to some big picture thinking. David, of course, did that also, the big picture thinking. Um, but, uh, David, uh, oversaw the output on a day-to-day basis and always made sure that it was of the standards that, uh, that Ed and other people in the building wanted. And, um, so yes, the two of them were, uh, were, were quite a pair that, uh, helped advance libertarianism. And, and they agreed on strategy and they agreed on the kind of quality work, uh, that, that Cato should be doing. And, you know, when I started working in the early 90s, talking about drug legalization was still taboo. But at some point, and Cato really was the only think tank practically talking about those issues. But at some point, it became a respected part of the debate. And, of course, public policy has even changed on that with regards to marijuana in much of the country. and other countries as well. So that's an example of sort of sticking to the principle of individual liberty and having a medium to a long-term view. Probably foreign policy is another example. Yeah, I was going to say that. So Ed did have a long-term view. He didn't think that these things were going to happen overnight, but he continued to push for what he thought was correct. On foreign policy, Cato took a principal, non-interventionist position. Uh, and that cost Cato over time, especially during the, um, the Gulf war of, uh, the very early nineties, Cato lost, I think about a third of its funding at that time, but it was the right thing to do. Um, so had said to the foreign policy people, yes, we need to take this position. And, um, you know, that was, uh, uh, kind of, uh, a policy that we, we've never abandoned for sure. And now we're starting to see, you know, I wouldn't say, uh, uh, 100% because there's a lot, there are a lot of deviations but people are now starting to come around to uh the U S having a more restrained foreign policy And if uh if you had thought that would be the case in the 80s or the 90s that probably looked pretty far But I think this goes back to Ed long-term view. And we are in this battle for the long run. If we weren't, then very few of us would stick around because on a day-to-day basis, we don't necessarily see the changes that we want. But over the long run, those of us who are libertarians, I think, can be proud to see some of the stuff that's happened, particularly internationally. Cato can, of course, take credit for the fall of the Soviet Union, but just think of how many people were liberated from that. And in my view, we should take this global approach towards looking at liberty. Liberty is not just the birthright of Americans. It's the birthright of every person on this planet. And in the time that Cato has been around, we have seen big gains in human liberty across the world. And I think we should not forget that when we sometimes get a little down about things domestically. And I think we should also mention, of course, Roger Pallon's work at Cato when he joined Cato. and established the Constitutional Studies Center. Ed always started from first principles. And the right to be left alone to pursue your own dreams and so forth came before government. Government didn't give us that right. It was a so-called natural right. And Ed always put liberty first. And even in terms, he wasn't an economist. He did have an MBA and so forth. and he was very knowledgeable about the work of Hayek and others, and Friedman. But Ed hit it right on the nose when I used to run the monetary conference, Cato's annual monetary conference, which we started way back in January 1983. It went on for 40 years. And the first conference on the search for stable money, the conference addressed the high inflation and economic instability of the early 1980s. And Ed understood that inflation is not caused by honest economic growth and that the smooth operation of a market economy needs sound money. And one of the purposes of the conference was to examine alternatives to government fiat money and consider a range of monetary rules. And so the monetary work that Cato's done has been also international scope. And, you know, Ed really, he was coming up with just all these different programs, many of which continue at Cato, and it's looking at the long run. And we started a distinguished lecturer series, and Hayek was first speaker. And Hayek was a good friend of Ed's, and, you know, he was a major force in our thinking. And, of course, we named the auditorium in the new building after F.A. Hayek. You know, it's easy to be down about some of the things that are happening in the country and around the world. But one thing to remember about Ed is that he was an optimist. He was always an optimist. And he acted, even in times that were discouraging, in a hopeful manner. Because he really did believe that we were going to, we being classical liberals, going to come out ahead at some point because we were right. He really did act, even in the face of every kind of adversity and setback, like we deserved to win. and uh and um it always reminded me of this line from the from the play cato that was popular during the american uh revolution where uh the the the character says something like um we you know we can't guarantee success but we deserve to win and that was very much uh ed's attitude And I think it helped very much shape the Cato Institute and the Cato Institute of today. With that, we're running out of time. But before we close, I thought I'd ask Jim and Aaron if they have any last words to share with us. Well, I think we should mention the Milton Friedman Prize for Advancing Liberty, which had started. And Peter Bauer was the first recipient in 2002. And this series honors people that are basically putting their life online in many cases to defend freedom. And it's been an international award. And Milton was hesitant to lend his name to anything like this. But Ed, being the persuasive person he is, called Milton's wife, Rose, and had her help convince Milton to do this. And Milton loved the idea and certainly signed off on it. At the very first one, he gave a talk, but he attended some other ones as well, as I believe. and I'd just like to conclude that again we've only scratched the surface here of all Ed did to advance libertarian principles and I'd say his wit and keen intellect, amazing energy and dedication to the principle of free society will not be forgotten I would like to add that Ed would always say that he wasn't intellectual and how you define intellectual is uh is very hard and people have different ways to think about it but um ed appreciated ideas there's no doubt about that and um he knew what we were doing uh one time ed was asked uh where how do you ground your libertarianism and he said well i believe that people have uh rights to, you know, what we see in the Declaration. And then the interviewer crossed on and said, where do we get these rights from? And Ed said, oh, you know, look, I'm in no position to sort of give you a derivation of where we get these rights, but I feel they're correct. I intuit them to be the right way to think about how people should live their lives. Ed had disdain. for people who wanted to run other people's lives for people who were um bureaucrats or people who were just busy bodies and uh he he lived that uh through his work um and i think if you read what he wrote say in his bi-monthly memos some of his op-eds that work comes that those ideas come through and I think that's an admirable way to look at the world. We should treat people, treat adults as adults to make their choices as they see fit as long as they don't harm others. And that was the principle that Ed devoted his life to and it's a very worthy one. Ed was a natural libertarian. He took ideas seriously, but he didn't take himself too seriously and he was always funny and persuasive. I remember being at a donor conference one time where he was bragging about Cato and at one point talking about, this was at the dawn of the social media era, talking about how many followers Cato has on Twitter. and then he added, and I don't even know what Twitter is. Cato was headed in all sorts of directions that was bigger than what he could imagine, and I'm sure that it's continuing to head in those directions today. Thank you, Aaron and Jim, for spending your time talking about this today. Thank everybody. I want to thank everybody for listening. And I want to say that later this week we will be posting on the Cato website some tributes to Ed from Cato colleagues. So watch out for that, and we'll see you soon. Thank you.
