Notes from Alex Chafuen and Mike Walker
After 23 years at Atlas I have a treasure of notes and recollections of moments in the history of Atlas and its institutes. Our movement will face great challenges ahead, but many of those who preceded us taught us great lessons. One such example is Fraser Institute´s (Canada) experience confronting the decision of whether to accept government funding for a project, and how to maintain their strict independence:
Here is Mike Walker’s description:
The government of Canada asked the Institute whether we would be interested in doing a study of the Services Sector of the Canadian Economy. I said no thanks, we don´t accept government funding. They then asked well, if you won´t do the studies would you at least tell us how much it would cost if you were to do a program of study involving some twenty or so books? I felt that that was not compromising the Institute´s status and so I used our standard procedures to estimate the cost. It came out at $1.2 million.A month or so later the government department came back to the Institute saying that they had asked the same question of the Economic Council of Canada the rough equivalent then of the President Council of Economic Advisors and had been told that the study program would cost $3.4 million. Now, they said, would we save the tax payers $2.2 million and do the studies? We felt that the studies were important to do and that how they were done would have an important impact on the government and upon Canada´s Statistical Agency, Statistics Canada, since the studies were to be of the most basic and fundamental kind examining among other issues, how the Services Sector of the Canadian Economy should be measured.
There then ensued a long discussion within the Institute amongst the research staff and with our Editorial Advisory Board members. After due consideration we agreed with the importance of doing the studies because of the dearth of understanding about the importance of the sector and the widespread tendency within the government and outside it to regard goods production as the only source of wealth creation in the economy.This misperception was fueling protectionism and other stupid polices in western governments generally and in North American governments in particular. The potential contribution of the services sector was dismissed by unions and other activists by referring to jobs in the service sector as the notion that the service sector was basically fast food etc.
There was an important ideological component of the matter in that the Marxist position was that services added nothing to the economic welfare of a society and were largely demeaning to those employed in their provision. It was for this reason that both the Chinese and Soviet governments did not measure services in their GNP statistics and discouraged service sector development in their economies. A policy that had devastating consequences for their economic development and which was at the base of many of the bad policy choices being followed in the Western world.
So there was agreement that doing the studies would advance the mission of the Institute.And we could save the taxpayers money because the government had indicated that it was going to have to do the studies anyway. Having myself left various employments in the Federal Government I was deeply skeptical that we could do this work and abide by the principles of independence which we had fought hard to establish in dealing with the largely business funders who then provided the bulk of our resources.
Nevertheless I felt obligated to bring the matter to the Board of the Institute since it was a very significant undertaking. I knew the Board would be enthusiastic about doing the project and I was correct. My strategy in bringing it forward for discussion was to attach to the project what I felt was a set of conditions to which the government could never agree. These conditions were: that we would have complete independence in the research work; complete control of the selection of authors; sole editorial control over the content and exclusive right to determine which of the completed studies would be published. Finally, I said that we should only do the studies if the Government of Canada would give the Fraser Institute the copyright to all of the studies and relinquish any proprietary right over the studies the ultimate guarantee of intellectual property ownership. Since this later provision was something that the Government of Canada had never done, I was confident that we could send our proposal to the government without any chance that they would agree to its terms.
I was wrong in my assessment. The government response was to agree to every detail of the conditions and it had to promulgate a special law to permit the project to go ahead on the basis that they would relinquish the copyright and the exclusive right to determine the conditions of publication to the Fraser Institute.
So we in the end did the project which produced some 25 books about the services sector, an internationally recognized contribution to knowledge about the functioning of the service sector in the economy and translations of the work into other languages around the world including into Chinese which had an effect on the attitude of the Chinese government toward the liberalization of this sector. All of the books were published by the Fraser Institute and there was no interference with the work at any stage by the government of Canada. The resources acquired to do the studies left a residue of capital equipment within the Institute which enabled a wide range of activities which otherwise would have been impossible.
We have never done another project of any kind for the government sector even though they are from time to time offered. I can see no reason in principle for not doing a project of the kind that we did if the conditions were to be the same. The central reason for not doing them is that it is the role and mission of the Fraser Institute to determine the agenda of policy discussion in Canada and, from time to time, elsewhere. To the extent that we do research work which is determined by the agenda of governments or business funders we permit ourselves to be distracted from our mission. The only exception is where our independently determined agenda and that of the government or business funder coincides. The service sector project was one such occasion.
As a footnote, I might say that we have a regular discussion of this issue at our annual strategic planning session and uniformly the research staff of the Institute have voted not to do government funded work under any condition even if my conditions listed above were met.
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