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Why Corporate Special Interests Created Modern Libertarianism


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How is it that corporate special interest groups are able to push legislation through Congress that rewards them at the expense of everyone else in our country?


One of the answers is that they need to create a justification. They need to create some kind of ideology that says, “We’re all going to benefit if we do _____________.”


Why do they have to do this? Because if they told us that they were going to cut our pay and benefits so that a few people could get really wealthy, we’d never buy it.


This justification is what most people know today as libertarianism. This isn’t the libertarianism of Proudhon, Bakunin, or Hodgskin. It’s the libertarianism of Mises, Rothbard, Friedman, and Rand and it originated from corporate think tanks of the 1940s such as the Foundation for Economic Freedom (FEE) and the Rockefeller Foundation.


Lobbying has been going on for a long time in America. In 1949, Congress formed the House Select Committee on Lobbying Activities (or the Buchanan Committee) to investigate the extent to which lobbying influenced legislation. One of the areas the Buchanan Committee investigated was lobbying to the public compared to direct lobbying of legislators. The two powerful think tanks of the day that they looked at were the Foundation for Economic Freedom (FEE) and the Public Affairs Institute.


FEE was founded by longtime U.S. Chamber of Commerce executive Leonard Read and its top contributors were a who’s who of the largest corporations of the day including: General Motors, Chrysler, Consolidated Edison, Du Pont, Gulf Oil, US Steel, Montgomery Ward, Armour, and B.F. Goodrich.


As revealed by the committee and discussed in the book The Lobbyists by Kark Schriftgeisser, the purpose of FEE was “the preparation of pamphlets, booklets, and articles presenting one side of public issues.”


FEE fought against President Truman’s fair deal, rent controls, labor bargaining, taxes, and other progressive legislation of the day. FEE also fought for the Taft-Hartley Act to limit the strength of unions.

In 1946, Herbert Nelson, one of the highest paid lobbyists in Washington and the executive vice president of the National Association of Real Estate Boards was fighting to get rid of rent controls. Nelson went to Read and FEE and commissioned a study to attack rent controls and influence Congress.


Nelson, according to Schriftgeisser, would write his association president later and say:

I do not believe in democracy. I think it stinks.

The folks who would write the pamphlet Roofs or Ceilings? for the real estate industry: Milton Friedman and George J. Stigler.

FEE’s second ever publication in 1946 “Roofs or Ceilings? The Current Housing Problem.”

You can hear the beginnings of modern day “free market” libertarianism in Friedman and Stigler’s pamphlet:


Rent ceilings, therefore, cause haphazard and arbitrary allocation of space, inefficient use of space, retardation of new construction and indefinite continuance of rent ceilings, or subsidization of new construction and a future depression in residential building. Formal rationing by public authority would probably make matters still worse.

Instead of a concern for people and making people’s lives better, the new purpose, as defined by Friedman and Stigler, was to serve the market (in this case the real estate industry). Of course what isn’t mentioned in the pamphlet is that Friedman and Stigler are working for the real estate industry that stood to profit immensely from the elimination of rent controls.

Mark Ames sums up the purpose of Friedman libertarianism nicely:


The purpose of the FEE — and libertarianism, as it was originally created — was to supplement big business lobbying with a pseudo-intellectual, pseudo-economics rationale to back up its policy and legislative attacks on labor and government regulations.

These attacks on democracy repeat in David Koch’s Libertarian Platform of 1980:

  • We urge the
    repeal of federal campaign finance laws
    , and the immediate abolition of the despotic Federal Election Commission.
  • We favor the
    abolition of Medicare and Medicaid programs
  • We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive
    Social Security
    system. Pending that repeal, participation in Social Security should be made voluntary.
  • We propose the
    of the governmental
    Postal Service
  • We oppose all personal and corporate income taxation, including capital gains taxes.
  • We advocate the complete
    separation of education and State
    . Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.
  • We advocate the
    of the
    Food and Drug Administration
  • We advocate the
    of the
    Federal Aviation Administration
  • We support the
    of the
    Environmental Protection Agency
  • We support
    of all law which impede the ability of any person to find employment, such as
    minimum wage laws
  • We condemn compulsory education laws … and we call for the immediate repeal of such laws.
  • We oppose all government welfare, relief projects, and ‘aid to the poor’ programs. All these government programs are privacy-invading, paternalistic, demeaning, and inefficient. The proper source of help for such persons is the voluntary efforts of private groups and individuals.
  • We call for the
    of the
    Occupational Safety and Health Act
  • We call for the
    of the
    Consumer Product Safety Commission



'The Big Fish Eat the Little Fish,' satire on the fall of Johan van Oldenbarnevelt, 1619.


The goal is to undermine democracy in favor of wealthy private owners and big business.


The goal is to flip everything on its head so that government is run by and for the largest corporations and special interests. Libertarians advocate for eliminating rules because they know that without any rules, the big eat the small, and, just like in the game of Monopoly, there will be a winner and lots of losers.


What corporate special interests want is the complete elimination of American democracy in favor of private ownership where “owners” create the rules and laws, not people.


The propaganda known today as libertarianism was created because if they told you they were going to eliminate democracy, cut your pay, and sell off the entire country to a few people, you’d never buy it.

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