It was in signature style that the Independent Institute published a letter in mid-April signed by 151 economists, political scientists and others calling for the suspension of AB 5, the new California law barring companies from hiring many workers as independent contractors.
By prohibiting Californians from embracing flexible employment opportunities such as contract driving or health-care work, the letter argued, the act is penalizing the very people now most in need of assistance during the economic dislocation stemming from measures to combat Covid-19.
“Employment decisions hinge on the costs of distributing risk,” the letter said. “While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency. It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.
“AB-5 unintentionally has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals, those who would benefit most from flexibility to work around the restrictive policies.”
As with so much published by the Oakland-based Independent Institute, a think tank whose fellows commonly champion limited government, the target was another case of government intruding on freedom of choice.
“I think the pandemic has brought into high relief the real fallacy of the idea of the systematic blanket approach to employment in such an erroneous and horrible way that it’s really undermined the lives of millions of people just in California,” institute president David Theroux said in a subsequent webcast aimed at raising awareness.
Whether the institute’s warning succeeds in changing the public perception of the state’s crackdown on the gig economy remains to be seen. If anything, California’s Attorney General and a coalition of city attorneys subsequently signaled their increased commitment to AB 5 by filing a lawsuit against Uber and Lyft alleging that the companies have illicitly reaped “well into the hundreds of millions of dollars” by avoiding employer contributions to state and local unemployment and social insurance programs for ride-hailing and delivery drivers.
Nevertheless, it’s a good bet that the Independent Institute will keep providing commentary on the subject, and many others, as it has done for more than three decades.
“We’re in the business of raising questions,” offered Theroux, who founded the nonprofit enterprise.
Other than acknowledging a distrust of centralized government power, Theroux steadfastly resists any attempt to categorize his institute as conservative, liberal or libertarian. Independent Institute fellows indeed challenge orthodoxies across the political spectrum, critiquing militarism for oil one day and people who warn of human-caused climate change the next.
Institute authors have criticized Donald Trump’s use of tariffs against China, his economic sanctions against Iran and his initiative to establish a space defense agency. They have questioned military interventions, the war on drugs, immigration restrictions, the death penalty and government bailouts for “too-big-to-fail” businesses. Others have opined against the Affordable Care Act, advocated for school choice via educational savings accounts and argued that Vermont Sen. Bernie Sanders was “morally unfit” to be president because of his embrace of socialism.
Before the pandemic, Theroux met with a reporter at the organization’s two-story headquarters in an industrial area near Oakland International Airport. The soft-spoken intellectual dressed formally in a necktie and a blue blazer decked out with a lapel pin of a lighthouse, the institute’s brand insignia. The conference table was stacked with Independent Institute books and periodicals, and Theroux held forth on the wide array of political, social, economic, legal, environmental, and foreign policy topics that they addressed.
There was a now-timely history showing how government opportunistically expands in times of crisis, particularly war, but does not shrink once emergencies have passed; a book about the Third Reich’s use of French gun registration records to disarm French citizens, and how gun owners who refused to register their weapons helped the French resistance; and a study of state surveillance and privacy in the United States.
The evidence, said Theroux, shows that free trade, entrepreneurialism and innovation protected by the rule of law produce the best societal results, while “command-and-control” programs that infringe on free choice prove harmful economically, morally and culturally, with unfair enrichment of special interest groups being a consistent result.
With such priorities, it should not surprise that the institute is having a field day with the governmental responses to Covid-19. Its authors have approached the crisis from a variety of angles, championing expanded immigration for healthcare workers, predicting that the response will lead to the closure of 500 to 1,000 colleges and advocating for the use of the drug remdesivir well before the government publicly approved its usage for Covid-19 patients based on an early clinical trial.
Yet institute authors have been largely critical of efforts to respond to Covid-19, as can be surmised by a review of recent headlines, such as “California Gov. Newsom Numb to Workers’ Pain,” “Government Restrictions Have Gone Too Far,” “Governments Can’t Plan Economy’s Reopening,” “Economic Prosperity or Pandemic Protection: Why Not Both?” and “Pandemic Moves University of California to Lower Admission Requirements.”
“We don’t care who is using the unchecked power,” observed Mary Theroux, the institute’s senior vice president, and David’s wife, speaking before the pandemic emerged. Also elegantly dressed, she delivered trenchant comments about government programs she felt had failed in areas like education and homelessness. “Why is it the case,” she asked at one point, “that the more the government spends on homelessness the more homeless there are; the more the government spends on housing the less housing there is?”
Before diving into a think tank career track, David Theroux whizzed through UC Berkeley, earning three degrees in four years. Between 1972 and 1976, he picked up both bachelor of science and master’s degrees in mechanical engineering and a bachelor of arts degree in applied mathematics. Two more years at the University of Chicago, and he also had an M.B.A.
In the Windy City, Theroux worked as a research assistant for the prominent University of Chicago economist Yale Brozen, a noted free-market advocate along with Milton Friedman and others, and later a member of the Independent Institute’s board of advisors.
One year after graduating, Theroux became the founding vice president and director of academic affairs at the now well-known Cato Institute, then a nascent operation dedicated to “the principles of individual liberty, limited government, free markets, and peace” and started with backing from Koch Industries CEO Charles Koch.
Two years later, Theroux became founding president of the Pacific Research Institute for Public Policy, a San Francisco think tank that advocates for free-market policies, personal responsibility and small government. He stayed for six and a half years before founding the Independent Institute with a mission “to boldly advance peaceful, prosperous, and free societies grounded in a commitment to human worth and dignity.”
Although originally headquartered in San Francisco, the institute soon moved to Oakland, where the Therouxs live in the hills. Neither takes a salary from the organization, where one of their sons directs information technology. Asked about Oakland’s reputation for noisy liberalism, Mary said they love the city, and ‘there is a loud viewpoint, but there’s a greater diversity.’
Mary studied economics as an undergraduate at Stanford University and was co-founder, president, and CEO of San Francisco Grocery Express, a pioneering online grocery delivery business. She later was chairman of a family-owned company that was active in multiple fields. After it was sold, she had more time to devote to the Independent Institute and other pursuits, including her Bay Area and national work as an advisory board member for the Salvation Army, the Christian missionary organization.
In addition to their work with the institute, the Therouxs lead the C.S. Lewis Society of California, a Christian educational and cultural organization inspired by the British author of The Chronicles of Narnia. David is founder and president, and Mary is vice-president.
From its 1986 inception, the Independent Institute grew steadily, with its 2019 budget of $4.5 million up 21.7 percent over the prior year. There are 20 staffers located at its headquarters, and a large network of scholars in varied capacities around the nation, largely in universities and think tanks, who are affiliated with the institute in different ways.
Some fellows write only occasionally, while others work full-time and publish regularly via seven “centers” that focus on “culture and civil society,” “educational excellence,” “entrepreneurial innovation,” “global prosperity,” “health and the environment,” “law and justice” and “peace and liberty.”
The result is a steady stream of material that appears in books, on the web, in the quarterly journal The Independent Review and in other institute publications.
Financial contributors have ranged from pioneering biotech investor Franklin “Pitch” Johnson to Google to the Anschutz Foundation, a grant-making organization set up by billionaire GOP donor Philip Anschutz, owner of the entertainment conglomerate AEG.
David Theroux is quick to point out that the institute takes no money from government sources, nor does it do any contract work. It is nonpartisan and takes no positions on issues. Instead, it distributes the conclusions of its fellows, whose studies Theroux said are peer-reviewed.
“We wanted to be able to get beyond the political rivalries, to depoliticize the discussion,” he said.
In all, more than 500 people are listed as “authors” and about 280 as current “fellows” on the institute’s website. They include well-known writers like Camille Paglia and P.J. O’Rourke, and significant business figures, including PayPal co-founder and early Facebook investor Peter Thiel and Yammer Founder David O. Sacks, who was PayPal’s founding chief operating officer. Back in 1998, the institute published an incendiary book by Sacks and Thiel called The Diversity Myth: ‘Multiculturalism’ and Political Intolerance on Campus, which argued that the abandonment of liberal studies and the rise of political correctness at their alma mater, Stanford University, had led to a stifling of free speech and undermining of academic rigor.
Williamson Evers, a research fellow at Stanford University’s Hoover Institution for more than two decades and former assistant secretary of education under George W. Bush, joined last September to direct the institute’s Center on Educational Excellence. He arrived shortly after penning a Wall Street Journal article entitled, “California Wants to Teach Your Kids That Capitalism Is Racist,” which focused on a draft of a state-mandated ethnic studies model curriculum then in circulation. The curriculum document is now being rewritten following widespread criticism.
The institute has a quarterly publication called the “California Golden Fleece Awards,” designed to “shine a spotlight on waste, fraud, and abuse” in government and to foster public accountability. One recent issue focused on government regulations identified as blocking affordable housing development in California.
Independent board members include David Teece, the chairman and co-founder of the Berkeley Research Group in Emeryville and director of the Tusher Center for the Management of Intellectual Capital at the Walter A. Haas School of Business at UC Berkeley, where he is a professor. The advisory board has included multiple Nobel Prize-winning economists, the author Gore Vidal, and feminist civil libertarian Wendy Kaminer.
The research director is economist William F. Shughart II, a Utah State University professor, author, and editor who has opposed ethanol mandates, advocated for nuclear energy as a way to reduce carbon emissions, and criticized “sin taxes” on goods like tobacco and sugary drinks as being paternalistic, ineffective and unfair.
For government skeptics in search of lighter fare, the institute also features regular movie reviews, like one last year praising Clint Eastwood’s Jewell, a story about how security guard Richard Jewell was wrongly treated as a suspect by police and press after he found a bomb during the 1996 Summer Olympics in Atlanta. And it produces a satirical YouTube series called Love Gov that has received more than 20 million views. The show features a character named Scott Govinsky, nicknamed “Gov,” whose intrusive and manipulative ways wreak havoc on the lives of his girlfriend and others.
Humor aside, the Therouxs bemoan the fact that people seem unable to talk about political subjects without name-calling and stereotyping.
With regard to the coronavirus, most institute coverage has been thoughtful and well-reasoned — if also provocative, to be sure. Senior Fellow Álvaro Vargas Llosa looked at the highly successful pandemic track records of South Korea and Germany and noticed that both countries share unrestrictive regulatory environments that enabled scientists to quickly deploy tests for Covid-19, which allowed each to move far more swiftly than the lumbering U.S. response. Meanwhile, fellows Robert Higgs and Donald J. Boudreaux chronicled the vast enlargement of governmental authority in response to the pandemic, noting that powers conferred upon government during crises seldom sunset once the crisis is over.
On the other hand, in “This Pandemic Is Over. Let’s Stop the Economic Suicide, and Get Back to Work,” investor, economist and institute advisor George Gilder asserted in late April that “the latest figures” for 2020 showed death rates were lower than those of four of the five prior years, despite a complete lack of sourcing for that assertion — which ran counter to a substantial body of reporting elsewhere. And in “Forgive Me if I Don’t Fall Right Into Line with the New Fascism,” San Francisco lawyer and GOP official Harmeet K. Dhillon leveled highly inflammatory broadsides against three Democratic Bay Area mayors despite David Theroux’s goal that the institute help depoliticize debate.
That tempers occasionally flare should not be surprising, though; the issues addressed by institute authors typically invite bitter controversy. Take the issue of global warming, a topic to which institute authors and fellows have devoted a considerable amount of attention. That consideration has ranged from scholarly research papers such as “A Comparison of Tropical Temperature Trends with Model Predictions” in the Journal of Climatology to an Philadelphia Inquirer opinion piece entitled “Environmentalism Has Become a Religion.”
David Theroux himself got testy in an online debate with a commenter on the Independent Institute’s website on the subject. “Fully in keeping with climate doom-saying as a secular religion,” Theroux wrote in response to his opponent’s arguments, “the alarmist-cult worshiper spends the bulk of his/her waking hours seeking out ‘heretics’ who do not conform with the climate-alarmist high-church’s dogma,” After a back and forth over scientific claims, Theroux derided his opponent as a “troll” who should “get a life.”
Theroux is not shy about challenging the notion that man-made carbon emissions are causing a dramatic rise in temperatures on the planet. Asked if he ever worried he might be wrong on the matter, Theroux sanguinely pointed out that once — not so long ago — the scientific “consensus” was that peptic ulcers were caused by stress. Later it was found that they are most commonly caused by bacteria.
Similarly, Theroux said last week that he also views as flawed the epidemiological models that governments are relying upon to lock down societies in response to Covid-19. But then, it should surprise no one that the sudden emergence of a governmental consensus that has curtailed the liberties of billions of people would attract the attention of the Independent Institute and its passionate founder.