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Thinking about Think Tanks, Part One of Two

#1328 Thinking about Think Tanks, Part One of Two
FEED DATE: October 13, 2005
Christopher DeMuth

Opening Billboard: Funding for this program is provided by...

(Pfizer) At Pfizer, we’re spending over five billion dollars looking
for the cures of the future. We have 12,000 scientists and health
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Pfizer, life is our life’s work.

Additional funding is provided by the Bernard and Irene Schwartz
Foundation, the Smith Richardson Foundation, and the Lynde and Harry
Bradley Foundation.

WATTENBERG: Hello, IÕm Ben Wattenberg. Today on Think Tank we are
going to talk about Think Tanks. In Washington and elsewhere there are
a plethora of such institutions Šsometimes shrouded in
mystery. Ideologically, they range from left, to right, to center; they
play an important role in defining issues and ideas for both
governments and for the public. How do these Think Tanks work; why are
they important? To find out, Think Tank is joined by Christopher
DeMuth. He is an attorney, a scholar, a former high-ranking government
official, a fund raiser, a writer, and the President of the American
Enterprise Institute, a Think Tank. The topic before the house:
thinking about think tanks, part one, this week on Think Tank.

WATTENBERG: Chris DeMuth, welcome to Think Tank. Normally, Chris, the
first question we ask of a guest is for a biography, and we will do
that in just a moment, but this is an unusual program. Chris DeMuth,
for our viewerÕs benefit, is my boss at AEI, which is a think tank, and
I think our viewers should understand what the ground rules are.
I decided to do this program because think tanks have become, in
the last few decades I guess, a terribly important part of public
policy formulation in America and most people donÕt really understand
how they operate. Now, I think Chris knows more about the topic than
anyone, but I do not intend to bend over backwards and throw nothing
but softballs, nor will I bend over frontwards and be extra harsh...

DEMUTH: Be tough.

WATTENBERG: ...on criticisms, but I will ask some questions that, about
criticisms that have been made about think tanks, conservative, neo-
conservative, liberal, including AEI. Okay, let us begin. First
question, give us a little bit about your background.

DEMUTH: I went to law school and I practiced law and I taught
graduate school in Economics and Law at the Kennedy School at Harvard.
I had two tours in government. I worked in the Nixon administration as
an assistant to Pat Moynihan on the White House staff just out of
college and many years later I went back and worked for Ronald Reagan
in his first administration where I was in charge of regulatory policy,
or as we put it then, deregulatory policy. I had been out of
government for a few years, and I was publishing a magazine on
government regulatory policy, and I was a private consultant when I had
the opportunity to come to AEI. I didnÕt know if I would be here or
two or three years, as I had been in everything else IÕd done, but itÕs
now been 19 years. So, thatÕs the last almost 40 years for me.

WATTENBERG: Okay. LetÕs start with some simple stuff. What is a think

DEMUTH: A think tank...

WATTENBERG: A lot of people donÕt understand. They donÕt get it.

DEMUTH: Okay. A think tank is like a university, but without
students, where the scholars engage in fulltime research. At a think
tank, we think. We read, we write, we argue, we debate, and we produce
all manner of publications on government policy issues at AEI and most
think thanks. WeÕre different from a university in one other respect.
WeÕre not just doing the research for its own sake. We are reformers,
earnest reformers. We want to improve the world. We want to have
influence, as much as we can, in the political process, where there are
many other considerations, and we try to write things that are
interesting, accessible, and we promote our work. We try to get on Ben
WattenbergÕs show. We try to get in the newspaper op-ed pages, and we
hawk our books and magazines much more aggressively than a university
would feel comfortable with.

WATTENBERG: How do these think thanks come to be? Are they mostly
American invention, and are they growing rapidly?

DEMUTH: First, they are almost exclusively American. There
are dozens of think tanks in Washington. There are think tanks in most
of the states now. If you go abroad, you find a few in London, you find
a few in Canada and Australia. Elsewhere, itÕs a very scarce
phenomenon, and we spend a lot of time, especially in Eastern Europe
and in some of the countries in Asia, trying to help people that want
to start think tanks.

WATTENBERG: You were just in Poland on that topic, right?

DEMUTH: I was just in Poland. We held a conference in Gdansk
on the 25th anniversary of the legalization of Solidarity. I almost met
with some intellectuals in Krakow and in Gdansk that are forming a
policy research institutes. I didnÕt get to your big question.

WATTENBERG: Which was, are they growing?

DEMUTH: Are they growing and why? If you went back to the
early Ō50s you would find Rand in California and you would find AEI and
Brookings in Washington and that was about it. Now, there are several
other large ones, primarily the Hoover Institution at Stanford in
California, and there are dozens of think tanks in Washington, many of
them specializing in particular subjects, a few of them full line think
tanks like ours.

WATTENBERG: Environmental think tanks, civil rights think tanks,
feminist think tanks.

DEMUTH: Right. International economics, trade.
WATTENBERG: You name it.

DEMUTH: Environment. ThatÕs right.

WATTENBERG: How many scholars do you have at AEI?

DEMUTH: We have 50 scholars right here in our headquarters in
downtown Washington. About 150 people work here, and about 50 of them
are independent, senior scholars, such as yourself, and we have about a
hundred adjunct scholars at universities around the country that do
research for us. We publish their work. They come to our conferences.

WATTENBERG: Again, so the public gets an understanding, what is the
annual AEI budget?

DEMUTH: Approximately $20 Million.

WATTENBERG: Now, have the number of think tanks right of center grown
rapidly? Because, in the universities, the faculties have really, at
least most of us think, have moved to the left. Was that an
action/reaction kind of thing?

DEMUTH: I think that thatÕs part of it. IÕd say thatÕs maybe
half of it. One-half of it is that the intellectual action in the past
30 years has been on the right. The new ideas in tax policies, world
reform, foreign policy, theyÕve all come from the center to the right
of the spectrum. In previous eras, the new ideas were coming from the
left, and I think that think tanks have grown as a sort of expression
of the ferment that existed as a minority viewpoint and then gradually
gathered more adherence, so that it is now - weÕre almost an
establishment of our own.
But, at the same time, the universities remain - not only
remained very much to the left, but became far more so, and they became
infected by several odd intellectual strains: feminism, womenÕs
studies, and so forth. They became very hospitable - very inhospitable
to people of a certain viewpoint, so that we now, at AEI, have many,
many people - political scientists, economists - that could have
prominent tenured positions in universities, but find AEI a more open
and yeasty environment in which to do their work.

WATTENBERG: A big question in America about accountability. You do not
make these decisions unilaterally? You have Š thereÕs a Board of
Trustees, a council of academic advisors?

DEMUTH: ThatÕs right.

WATTENBERG: You are in regular consultation with them?

DEMUTH: We have a Board of Trustees that consists of 24
prominent executives of business and financial corporations. We have a
council of academic advisors of 12 university based academics, senior
accomplished people in political science, history, economics and law.
I meet with the Board of Trustees many times throughout the year. I
have one or two meetings with the council of academic advisors, and I
talk with them all the time. They read our work. They tell me what
they like, and they tell me what they donÕt like.

WATTENBERG: It seems to me there are two kinds of think tanks. There
are think tanks that have an institutional policy Š if you call Š the
two IÕll mention are conservative ones, but - the Heritage Institution
or Cato -and say, what do you think about the XYZ issue, they will say,
well, hereÕs our paper on it, and the same is true with many of the
liberal think tanks. There are others that say here are six guys who
have written about it and take your choice. Where does AEI fall?

DEMUTH: We donÕt just say weÕre after truth. We have some
sense of where we think the truth lies when good policy is concerned.
At AEI, we believe in the free, private social order, private markets,
private institutions. We tend to be skeptics, show-me Missourians,
when it comes to government programs. We want to see what the facts
are. WeÕre for a limited government. WeÕre for individual liberty and
Now, those terms that IÕve used can solve some problems, but with
respect to most problems, they donÕt give you answers to what good
policy is. The work that we do is done by people that share these
views, but the work is not institutional. AEI doesnÕt take positions
on any subject, and intellectual work is adherently individualistic.
So, weÕre not organized like General Motors. We donÕt have somebody at
the - doing an assembly line, producing an institutional product. We
try to hire people of extraordinary ability, working on the most
important political issues and leave the conclusions and proposals to

WATTENBERG: There have been some criticisms, and IÕm sure youÕve heard
of them, about how think tanks raise their money. Do corporations and
foundations and individuals fund the institute as a whole or single
project or a single scholar? How does that work?

DEMUTH: All of the above. We raise about $20 Million, $25
million a year, some of it for endowment, most of it for the annual
budget each year. And, very roughly, itÕs divided a third business
corporations, a third individuals, and a third foundations. So, we
have over 300 corporate donors to AEI, and some of the donations,
especially from foundations, will be for a particular project, on
government regulation or improving economic development assistance.
The corporate donations and individual donations tend to be just
for the whole AEI.

WATTENBERG: But, if a corporation - if Merck says, look, weÕre getting
killed on this Vioxx thing, we want you to fund a study on that, and
weÕll put up the money, would you do that?

DEMUTH: Usually, if somebody comes to us and says, will you
do this study if we give you a grant, usually, weÕll say no, unless
itÕs something weÕre already doing. You would come to me, and I would
say, Ben, weÕre not working on that, but hereÕs another thing that I
think is even more important. Let me see if I can interest you in it.

WATTENBERG: At universities, senior scholars, although many of them are
changing now, have tenure. At think tanks they do not, and the
argument is made that that could affect a scholarÕs ability or desire
to do independent research that might not fit in.

DEMUTH: Let me tell you a secret. In the academic world, it
is well known that tenure has nothing to do with academic freedom. It
is about middle age burnout insurance. Young people want to know that
they have a job all their life, even if they become less productive
later on. It may be that we attract people who are a little less risk
averse, or theyÕre not so concerned about being coddled in a bunch of
perpetual welfare benefits. TheyÕre more confident of their ability to
produce good work.

WATTENBERG: Do you think that some good ideas have come from the more
liberal think tanks - environmentalism, civil rights, feminism - and
IÕve talked to you about this: environmentalism, and I know you were in
the regulatory scheme of things, that in principle, we want to live in
a world Š I donÕt want to answer the question for you Š but of some
environmental regulation, but theyÕve gone too far. Is that basically
the position of yours?

DEMUTH: Our environmental policy or good ideas from liberal
think tanks?

WATTENBERG: Take your pick.

DEMUTH: Well, IÕll take the second one first. Since 1970
when EPA was created and we had the first major Clean Air Act, I think
that environmental policy has been one of AmericaÕs sensational success
stories in government policy.
At the same time - in terms of producing results - at the same
time, it has been sensationally wasteful. Both can happen at the same
time, that is, weÕve produced spectacular improvement in the quality of
air, water, in the way we deal with toxic chemicals and problems of
land disposal. WeÕve put aside large parts of real estate for national
parks, for city parks. This is what a rich society like ours wants to
do, and we have gotten enormous environmental improvements over the -
over those 35 years.
At the same time, the policies that we adopted back in the 1970s,
and this was something I worked on back then, were very explicit
controls on individual production processes, engineering controls. It
was almost a Stalinist approach. It was the first thing that was done.
It produced a lot of results, but it also produced an enormous amount
of waste. We spent billions and billions and billions of dollars for
very little or no environmental improvement, so we could have done much
better. It was a new area of policy. We learned a lot during those
first 10 years and by the end of the 1970s when I was teaching these
things at Harvard, I think almost everybody Š forget their politics Š
even at Harvard, who studied these issues seriously understood that we
needed to make fundamental improvements.
Instead, weÕve only made modest improvements and we still have
environmental policies that while they are effective, are tremendously
wasteful. We could be getting much more environmental improvement for
less money.


DEMUTH: But the political debate has become stymied. Most
people donÕt understand the tedious details of how these programs work.
They want a tough cop on the beat. They know that youÕre regulating
big corporations, and they have a lot of power, so they, you know, will
tend to instinctively to favor the tough cop on environmental matters,
and theyÕve seen improvements.

WATTENBERG: Just as a rule of thumb, given the short handedness of
people in government and people in the congress or state government,
the think tanks have more scholarly resources to do serious research
than do these operational aspects of government. Is that basically

DEMUTH: Yes, thatÕs right and actually in my years here, IÕve
been more impressed by this. Our government has become so
overextended. It is doing so many things, and the politics has become
so professionalized. You know, the Congressmen, they donÕt spend their
evenings reading books; they spend their evenings going to fundraisers.
When they question a witness at a hearing, they get their questions
from an interest group to make some point. ItÕs become quite almost
mechanized, and a lot of the deliberation, which is supposed to be part
of the representative process, has been wrung out of the formal
institutions of government, and I think the think tanks have - I think
the think tanks have almost been a sort of a private sector correction
to this problem that we have in Washington.
What they donÕt see is the enormous waste that has gone into this
or to the potential for doing much better in the future. So, itÕs a
tough area.

WATTENBERG: Question. When the George W. Bush administration came into
office in the year 2000, the word was on the street that you were
offered some very important jobs, yet you decided to stay at AEI. And
my two questions: How come, and do you think it was the right decision?

DEMUTH: IÕm a great admirer of President Bush, and I would
have been honored to serve in his administration, I might be honored to
serve in his administration sometime in the future, but I have - IÕve
been very happy to be at AEI. I enjoy my colleagues. I think weÕre
doing important work and I expect to stay here indefinitely.

WATTENBERG: You can make the case that the think tanks have more to do
with creating policy than the governments in their own way. What are
you most proud of in your think tank career? Can you single something
out, or is sort of just a general kind of thing?

DEMUTH: Well, it is a general kind of thing but IÕll try to
say it in a way that it doesnÕt sound like mush. Maintaining a big
institution that supports hundreds of people and produces thousands of
publications and conferences is very hard work. ItÕs much harder work
than I thought when I came here. The great universities have
endowments in the billions and we have been, until recently, pretty
much a hand-to-mouth organization. And it has been very hard work
creating an institution where people such as yourself and your
colleagues can do world class research on difficult policy and
political problems and come up with solutions that actually have some
appeal to people in the world of practical politics. So, I think that
simply the blocking and tackling, the kind of ordinary day-to-day work
of maintaining and building this institution has been the most
gratifying thing for me.

WATTENBERG: Finally, what do you see down the road for think tanks? Is
this sort of the fifth branch of government? The three that we know
of, the press is sometimes called the fourth branch of government. Are
think tanks going to become Š or are they - will they become more so
sort of the fifth branch of government?

DEMUTH: I donÕt think theyÕll be the fifth branch of
government, but I think that their role in American politics and public
affairs is here to stay. I think that it is innovation in
organization. You know, weÕre somewhat like the universities but
different. WeÕre managed differently, our finances are different, we
donÕt have tenure, we donÕt have faculty committees, weÕre specialized.
Each think tank is a school. That is, we have a set of views, so weÕre
arguing - the debate is one school versus another. ItÕs been, I think,
a very considerable innovation in the way that political research and
argument, deliberation on political subjects is carried out and I think
the success of the think tanks has not been an accident. It hasnÕt
been because two or three rich millionaires put their money into it.
It hasnÕt been the sort of thing that you read about it in the papers.
ItÕs an important development in the way we organize our politics in
the country, and as I look at things on a day-to-day basis at AEI, IÕm
always looking for, you know, when are we going to become too big, when
are we going to become unmanageable, when are we going to run out of
important promising things to do, and I havenÕt seen that day yet.

WATTENBERG: Just as a personal aside, when I started Think Tank, which
was about a dozen years ago, one of the people here at AEI said, 'You
know, youÕre going to do four or five shows, and youÕre going to run
out of topics', and you never run out. We have people always coming to
us and wanting us to do this, wanting us to do that. Ben, youÕre
expressing your own point of view, let them speak, but that was the
idea of the show. I didnÕt want to be just a traffic cop. I call
myself the immoderator of the program, but there are a lot of people
out there with ideas; authors, think tank people, and I just know that
for me itÕs been a great adventure. So thank you very much for joining

WATTENBERG: And thank you. Please join us for a future episode where we
will continue our discussion about think tanks. And remember please to
send us your comments by e-mail. We think it makes our program better.
For Think Tank, IÕm Ben Wattenberg.

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Funding for Think Tank is provided by...

(Pfizer) At Pfizer, we’re spending over five billion dollars looking
for the cures of the future. We have 12,000 scientists and health
experts who firmly believe the only thing incurable is our passion.
Pfizer, life is our life’s work. Additional funding is provided by the
Bernard and Irene Schwartz Foundation, the Smith Richardson Foundation,
and the Lynde and Harry Bradley Foundation.

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