R. Randolph Richardson (1926-2015): Supporter Of Think Tanks And Strategists

Por Alejandro Chafuen: Publicado el 25/6/2015 en: http://www.forbes.com/sites/alejandrochafuen/2015/06/25/r-randolph-richardson-1926-2015-supporter-of-think-tanks-and-strategists/


No other country in the world has such a robust number of public policy think tanks than does the United States. When it comes to conservative free-market think tanks, most serious students have credited the special role played by lead funders. During the late 1970’s and early 1980’s, several organizations were created, strengthened, and some rescued by the combined efforts of intellectual and business entrepreneurs. One of the most prominent passed away last month: R. Randolph “Randy” Richardson (1926-2015).

He was one of the select group who realized that unless the wealth creators got involved in helping preserve the free-enterprise system, the future would belong to socialism in some of its many varieties. Richard Mellon Scaife, John M. Olin, Joseph Coors, Robert Krieble, are some of the most prominent who joined in this quest. In one of his last policy speeches, Richardson credited other predecessors, Harold Luhnow (Volker Fund), Loren Miller, and Dick Ware (Earhart Foundation), as some of the first strategists in the intellectual battle for the free society. In that same speech, Richardson quoted F.A. Hayek’s analysis that socialists were winning due to the strength of their communications and strategy rather than for their ideas.


All of the individuals mentioned above embarked on helping create room for the giants of the Austrian school and Chicago school of economics as well as the think tanks that would turn some of their ideas into policy solutions. Their success was such that a long critical article in “The Atlantic” in 1986 by Gregg Easterbrook concluded “the terms of debate will never again be the same. Government-imposed solutions will no longer automatically be considered to be in the best interest of the poor … nor will market-mediated approaches automatically be considered apologies for the rich.”
During his 20 years at the helm of the Smith-Richardson Foundation, Randy Richardson supported efforts to promote freedom around the globe. He was an early sponsor of Hernando de Soto and his Instituto Libertad y Democracia. The “Shining Path” terrorist organization had embarked on a path of violence to take over Peru. De Soto wrote a book showing that Peruvians were being exploited not by capitalism but by the regulatory state. His book was titled “The Other Path” and became a bestseller. It was written in collaboration with Enrique Ghersi and Mario Ghibellini and carried a memorable long introduction by Mario Vargas Llosa (now Nobel Laureate), which was the lead story in the magazine of the Sunday edition of the New York Times. This was too much for the terrorists. De Soto became a prime target.

De Soto had been in close touch with think tank champion Antony Fisher since 1979. From Fisher he learned about Randy Richardson and approached him with an unusual request. Rather than funding for public policy research, he asked for funds to buy an armored car. I doubt that the request fit in the guidelines of Smith-Richardson Foundation, but at the time, private, and even corporate donors, were less afraid to assume risks. Randy Richardson gave the grant. The terrorists had a chance to shoot at the car, aiming straight to the gas tank, but the armored plates saved the day. That was not the only scare, ILD’s building was bombed twice.

Richardson understood the need to wage the battle against communism on many fronts. His foundation supported the Center for Strategic and International Studies (CSIS), then at Georgetown (now independent), and also the National Strategy Information Center, which later launched the “League to Save Carthage”. The late David Abshire, a founder and first director of CSIS, described the League and the work of its founder, Frank Barnett, as one of the great untold stories of the “Cold War.” Richardson’s lead grant for an Atlas Economic Research Foundation workshop for Latin American think tanks started an ever growing network of free-market groups south of the border.

A few weeks ago, at the memorial service for Mr. Richardson, Richard “Dick” Allen, National Security Advisor in the Reagan administration, described how after returning to the U.S. for his first academic job, Gerhart Niemeyer, his mentor at Notre Dame University, told him “you need to meet Randy.” Niemeyer, had a long tenure as political philosophy professor and an expert on communism. Richardson placed Allen on his board of governors. First generation foundation leaders, a Southern splinter group of the Young Presidents Organization, and key strategists, such as the late Dan McMichael, helped build the think tank network that would be at the forefront of the battle for freedom around the globe. Allen credited Randy for his role in the founding of the Foreign Policy Research Institute, (FPRI) and many other efforts.

Another close collaborator, Les Lenkowsky met Randy on December 25, 1975, for a job interview. As director of research for the Smith-Richardson foundation he became a key lieutenant in the battle of ideas. Both were newcomers to the world of philanthropy. Lenkowsky, who later became a teacher of philanthropy, shared that the main lesson he took out of his many years with Richardson was that the success of grant givers depends on the success of the grantees, empowering them: “Find good people, be patient.” Randy knew that foundations were products of the private sector, of entrepreneurs as himself, and it was key to be efficient, he was not a fan of fancy offices and liked a lean style.

His son, Rod Richardson, also during the memorial, focused on less known aspects of his father’s life. One was his service in World War II. The other, how he considered grantees as part of his extended family. His fight for freedom in the cold, freezing trenches, marked him for life, both physically and emotionally. After his battalion helped liberate several concentration camps, he suffered when he saw the consequences of Yalta. Many liberated from Nazism got stuck in socialist enslavement. Of all the funders mentioned above, Richardson was the one who was more involved in the global battle. He paid attention to defense, strategy, and the world of free enterprise.

Chris DeMuth, who led the American Enterprise Institute (AEI) from 1986 to 2008, credited Richardson for helping rescue AEI which, in 1986, was in dire financial straits. DeMuth was seeking a grant to pay for severance to soften the blow to many researchers who were going to be let go just prior to Christmas. Devon Gaffney [Cross], then a senior program officer, reminded Randy that the donation did not meet the criteria of the foundation but, just as in the case of De Soto’s armored car, Randy gave the money. There is no room here to mention all his philanthropic work, but he was also a lead donor for Milton and Rose Friedman’s “Free to Choose” TV series.
The passing of time and the advent of new generations brings changes. The current Smith-Richardson Foundation, under the control of a different branch of the family, is still a major power house, and focuses more on research than institutional support for think tanks. Daughter Heather Richardson Higgins, head of the Randolph Foundation, focuses mostly on U.S. policy and civil society organizations, and is a major player at the Philanthropy Roundtable and the Independent Women’s Forum. Rod Richardson promotes targeted tax cuts to achieve environmental and health policy goals that have bi-partisan support.

Richardson believed that developing the best idea is half of the battle. The other half required “talented, determined men and women [who] can create and execute strategies which insure that good ideas can displace inferior ones in millions of minds.” His investments in this area continue to bear fruit around the globe.


Alejandro A. Chafuén es Dr. En Economía por el International College de California. Licenciado en Economía, (UCA), es miembro del comité de consejeros para The Center for Vision & Values, fideicomisario del Grove City College, y presidente de la Atlas Economic Research Foundation. Se ha desempeñado como fideicomisario del Fraser Institute desde 1991. Fue profesor de ESEADE.

Vision And Values: Kasparov On U.S. Leadership For A Free-World:

Por Alejandro A. Chafuén. Publicado el 9/11/14 en: http://www.forbes.com/sites/alejandrochafuen/2014/11/09/vision-and-values-kasparov-on-u-s-leadership-for-a-free-world/


Today we celebrate the 25th anniversary of the “Fall of the Berlin Wall.” Thanks to the recommendations of the late Arnold Beichman of the Hoover Institution and President George W. Bush’s acquiescence, in the U.S. it is also officially “World Freedom Day.” Friends of freedom have been celebrating around the globe as well. One freedom champion, however, is spending more time cautioning than celebrating. It is Garry Kasparov—the renowned chess player—but this time, in his capacity as Atlas Templeton Freedom Fellow.

In a speech delivered earlier this year, Kasparov called for a new era of American leadership. He believes that the enemy we confront today might not be as bad and dangerous as communism, but it can still have devastating effects on the U.S. and world economy.

As a typical “classical liberal” Kasparov claims that “freedom is worth defending everywhere.” The American vision implied that “individual liberty was for all, not just those lucky enough to be born into it.”

Forgetting this puts America and the world on a dangerous path. “If it matters at home, it matters everywhere,” said Kasparov. There are several “democratic dictatorships” today, but as an “enemy from without,” he focuses, understandably, on Vladimir Putin’s Russia. But he is equally concerned on the enemy from within, a lack of leadership coupled by a shift towards “Un-American Values.”

“What is lacking today” he said are “leaders willing to stand up to dictators who only respect strength. Ronald Reagan had two things that more recent free world leaders lack: principles and the credibility only principles can provide.”
Kasparov sees most of today’s leaders as “a one or two-move” chess players who have the inability to strategize further. He criticized Bill Clinton, who “decided to celebrate instead of analyze” and Francis Fukuyama’s analysis that liberal democracy had won for good. “Look around the world today. Is history over? In Iraq, in Syria, in Russia, in Ukraine?”

From without “the opponent is less and less old fashion communism.” It is the dictatorship of parties, clans, and in Russia, according to Kasparov, “the dictatorship” of one man. Kasparov warns that Putin’s current rhetoric is an aggressive foreign policy that may grow “like a cancer,” which “will be much harder to stop the further along it gets. And it will not be stopped unless the West, especially America, the leader of the free world, wakes up. You cannot retreat forever and expect your country, your economy, not to suffer.”

Kasparov, in a Reaganesque manner, sees that traditional values such as “excellence, sacrifice, faith, and unity” are also “values of individual liberty, of the free market, of the American dream of providing a better future for your children. They have slowly been replaced by a dream of security without risk, of dependence on the government, of partisan battles over a shrinking pie instead of growth that allowed for win-win negotiations.”

Just as the old communists of the past, “the bad guys” of today, “hate American values and fight against them because a Pax Americana is the end of them.” Kasparov concludes that “retreating will not end the threat. America, as the symbol of global freedom, will always be their target.”

Americans are weary of wars, and rightly so. To avoid new totalitarian empires and walls that constrain freedom, Kasparov promotes an economy refreshed by American values and a foreign policy that avoids the rashness of Bush and the aimlessness of Obama. He wants “leadership guided by principles, knowledge, and common sense.”

It is impossible to know if the totalitarians of today will be as successful as 20th century socialists and national-socialists who for decades enslaved and killed millions. It might very well depend on enough people heeding Kasparov’s call: “A strong America is good for the world and a strong America needs a strong economy. That means a return to risk, to real investment in big and difficult things, and a return to the values of innovation. Aiming high, believing in yourself and the power of your desires to change the world are essential parts of citizenship in a democracy, especially the greatest one of all.”


Alejandro A. Chafuén es Dr. En Economía por el International College de California. Licenciado en Economía, (UCA), es miembro del comité de consejeros para The Center for Vision & Values, fideicomisario del Grove City College, y presidente de la Atlas Economic Research Foundation. Se ha desempeñado como fideicomisario del Fraser Institute desde 1991. Fue profesor de ESEADE.

The Index Of Cronyism By ‘The Economist’: A Call For Improvement.

Por Alejandro A. Chafuén. Publicado el 30/10/14 en: http://www.forbes.com/sites/alejandrochafuen/2014/10/30/the-index-of-cronyism-by-the-economist-a-call-for-improvement/


Several of the most important think tanks around the world that defend the virtues of the free market have programs that focus on the moral defense of free enterprise or the more tarnished term “capitalism.” The American Enterprise Institute (AEI) for example, has a program on Values and Capitalism. Most of the work of the Acton Institute, in Grand Rapids, Michigan, is devoted to show to the religious, that the free economy can lead to a more virtuous and prosperous society. Two of the most recent books by the leaders of these institutes focus on this challenge: “Defending the Free Market: The Moral Case for a Free Economy” by Father Robert Sirico; and “The Road to Freedom” by Arthur C. Brooks.

Donors to think tanks and university centers have invested millions to promote programs and publications that address the morality of “capitalism” and “free enterprise.” Capitalism has been defined by most friends and foes as the economic system based on the private ownership of the means of production. When the means of production are in private hands in countries with pervasive corruption, the moral defense of profits becomes very difficult.

The term “crony capitalism” is being used today by economists from all sides of the ideological spectrum. It usually refers to an economy where preferential regulation and other favorable government intervention—based on personal relationships—helps decide winners and losers.

Unfortunately, much of the debate about cronyism is based on anecdotes and generalizations. A few days ago, during the Free-Market Forum on “Markets, Government, and the Common Good” organized by Hillsdale College, several speakers address the topic of cronyism. Over 400 people attended the event, half of them professors at Christian colleges. One of the keynote speakers, Charles Payne, an entrepreneur and a Fox Business Network contributor, shared with the audience a litany of regulations and privileges which tarnish and corrupt the essence of the free enterprise system. Some anarcho-capitalists and libertarians regard receiving any income from government as crony. On the statist side, some regard economic freedoms as crony. They argue that they serve the rich at the expense of the poor.

In the United States we have efforts, such as Subsidy Tracker, which give some idea of the problem. Subsidies feed cronyism. Known state subsidies to private business add up to $153 billion. This represents approximately 10 percent of government spending at state level. Assuming that the federal and local governments are as generous with tax dollars as the states are—if the same percentage applies to all government spending (35 percent of the economy)—then the subsidized private sector economy might approach 3.5 percent. More research is needed as the existence of one element of cronyism in a contract does not prove that all the value added ex-post is also crony. A deal between PDVSA (Venezuelan Oil Company) and Boligarchs (Bolivarian Oligarchs) can be crony, but that does not mean that many of the small win-win retail transactions, like filling our gas tank at CITGO (a subsidiary of PDVSA), are also crony.

Earlier this year “The Economist” magazine released an index of crony capitalism. The index had Hong Kong with the worse score. In the article “The Economist” acknowledged the weakness of the methodology but still made it the cover story. As Hong Kong has consistently ranked as number one in economic freedom, the fact that “The Economist” ranked it as the most “crony” does great damage to the defense of the morality of capitalism or free enterprise.

In many countries, considerable amount of profits result from contracts with totalitarian structures such as state owned companies, or access to under-valued foreign currencies. One of the negative effects of cronyism is that it can lead to an unequal distribution of economic freedom, a concept that I have addressed before. The inequalities in income and opportunity produced by cronyism and an unequal distribution of economic freedom are not due to God, natural endowments, or personal effort. As such, many times they are scandalous. Tim Carney, of AEI’s Culture of Competition Project, also speaking at the Free-Market Forum mentioned above, argued that polls suggest that citizens are not so concerned with inequality. Bill Gates and Warren Buffet, for example, are greatly admired. Unfairness, however, which arises from cronyism, is disliked by the overwhelming majority. Carney endorsed the need of developing better indicators of cronyism.

Even before the fall of the Iron Curtain a consensus developed that when it comes to growth, economic freedom won hands down over socialism. But when it came to justice and morality, there is no such consensus. During these last two decades there has been a constant improvement in the quality of the measurements of economic freedom. There has also been an advance in the efforts to measure corruption. There has been very little advance, however, in the effort to measure cronyism.

As cronyism is regarded as a source of injustice and a consequence of immoral behavior, has the index developed by “The Economist” proved the immorality and injustice of capitalism?

The above question seems illogical and will likely be disregarded in circles that believe capitalists can do no wrong. If you point to a capitalist who seeks and profits from privileges, this group’s response is, “he is not a true capitalist.” In many socialist circles you find the same attitude, when you point to a failed socialist experiment they answer, “they were not true socialists.” But for the large majority of educated observers, who follow economic policy, the fact that a magazine such as “The Economist” would rank Hong Kong number one in cronyism in a leading article and cover page, is no laughing matter. It gave a rich cache of ammunition to the enemies of the free market.
It was not just Hong Kong either. The country ranked second in economic freedom, Singapore, did not do much better as it ranked fifth in cronyism. The index is indeed weak. It measures the weight of the sectors which are prone to cronyism (among them construction, oil, ports, and banking), it then factors in the number of local billionaires in those sectors, and comes up with the ranking. With the same methodology, even a libertarian utopia could end up being classified as 100 percent crony. Take for example an island or sea platform, such as the one promoted by the Seasteading Institute. Assume that most of the property in that island is owned by billionaires, and where the main product is oil and the main service is banking. Even if all transactions are voluntary the Economist Index it would show it as almost completely crony. Although cronyism is usually described as quasi-corruption, the index shows a very low correlation with corruption. China, which scores very bad in corruption, just 4 out of 10, appears as much less crony than Hong Kong, which scores a respectable 7.5 out of 10 in Transparency (a measure of lack of corruption). Singapore, which has the second least corrupt score (8.5) ranks fifth worst in cronyism.

More than a reason for criticism, “The Economist” and its Index of Cronyism should be a call for action and improvement. “If it Matters Measure It,” says the motto of the Fraser Institute. Cronyism matters. Measure it.


Alejandro A. Chafuén es Dr. En Economía por el International College de California. Licenciado en Economía, (UCA), es miembro del comité de consejeros para The Center for Vision & Values, fideicomisario del Grove City College, y presidente de la Atlas Economic Research Foundation. Se ha desempeñado como fideicomisario del Fraser Institute desde 1991. Fue profesor de ESEADE.