Editors’ Note: John Miles Branch explores the feud between two prominent mid-century libertarian thinkers, Murray Rothbard and Richard Cornuelle, as a way of understanding the contemporary right’s growing antipathy toward nonprofits writ large. On February 6, the White House published a memo entitled “Advancing United States Interests When Funding Nongovernmental Organizations” that directs agency heads … Continue reading →
Editors’ Note: John Miles Branch explores the feud between two prominent mid-century libertarian thinkers, Murray Rothbard and Richard Cornuelle, as a way of understanding the contemporary right’s growing antipathy toward nonprofits writ large.
On February 6, the White House published a memo entitled “Advancing United States Interests When Funding Nongovernmental Organizations” that directs agency heads to “review all funding that agencies provide to NGOs” and “stop funding NGOs that undermine the national interest.” The memo is the latest and potentially furthest reaching in a series of moves on the American right to uproot the nonprofit sector. A series of long-simmering reform efforts, many targeting the wealth of universities and foundations, are a priority of J.D. Vance; conservatives in Congress have been working for nearly a year to pass H.R. 9495; and since Trump’s inauguration, the White House has begun making extralegal impoundments of federal grants.
What ideas are driving this movement? A desire to punish perceived ideological enemies, reminiscent of Reagan-era demands to “defund the left,” surely plays a prominent role. Yet more structural aspects of the nonprofit sector are a part of the conversation too. On February 10, the billionaire financier Bill Ackman wrote a post on X questioning government funding of nonprofit organizations, which are “not known for having good governance.” Elon Musk responded that government-funded nonprofits are “obviously an oxymoron,” declaring that they are “simply an extension of government, but with less accountability and a false veneer of independence.” Such statements are happening with increasing frequency in the first weeks of the Trump administration, as the White House and its ideological allies seem to be moving to cast suspicion on the nonprofit sector as a whole and on the totality of organizations that receive government funding in particular.
If durable, this marks a new step in an ongoing evolution of the right’s approach to private nonprofits. Republican orthodoxy for most of the twentieth century held that voluntary activity and a politically independent ecosystem of private nonprofits were vital components of American society—at least in its rhetoric. (Such administrations’ policy priorities often spelled difficulty for many actually existing nonprofits and their workers.) As HistPhil co-editor Benjamin Soskis noted in 2018, the first Trump administration’s silence on voluntarism broke with a long tradition of affirmative support from presidents. By attempting to consolidate the power of the executive branch to defund and revoke the nonprofit status of organizations at will, while showing distrust of hitherto-uncontroversial service providers like Lutheran Family Services along the way, the second Trump administration is pushing that departure further.
A midcentury schism between two prominent libertarian thinkers, Murray Rothbard and Richard Cornuelle, is one way to put this ideological shift in historical context. As authors like Melinda Cooper, Quinn Slobodian, and John Ganz have argued, Rothbard’s political project—which mingled radically anti-state, market fundamentalist economics with a taste for authoritarianism serving socially conservative ends—was a key forerunner to the contemporary right. Cornuelle, by contrast, is less well-known today, but was an important driver of the kind of conservative nonprofit sector advocacy that seems now to be on its way out. Understanding how and why he became a foil for Rothbard may help us more fully understand the stakes of the contemporary right’s growing antipathy toward nonprofits writ large.
In the 1950s, Cornuelle and Rothbard were friends and collaborators—two men who shared ambitious desires to diminish the power of the state at the height of the New Deal order. Cornuelle worked for the Volker Fund (the preeminent funder of libertarian thinkers in this era) and bankrolled Rothbard’s early career. However, their paths soon diverged. Cornuelle embarked on an effort to bring his ideas into the realm of mainstream political acceptability. Rothbard, meanwhile, scoured the political margins for allies to join his anarcho-capitalist vanguard.
In 1965, Cornuelle published the book Reclaiming the American Dream, which coined the term “independent sector” and argued that the New Deal had set adrift this historically vibrant group of private institutions. In the wake of Barry Goldwater’s dramatic presidential defeat, Cornuelle proposed that the American right abandon its laissez-faire attitude toward social welfare and begin proposing “constructive” private-sector alternatives to state programs, whether through the independent sector or what would soon become known as corporate social responsibility. He began multiple demonstration projects for the approach—most prominently United Student Aid Funds (USAF), a private student loan guarantor designed to preempt the need for a robust national public option.
Rothbard eyed these developments warily. In an internal memo to the Volker Fund in 1961—the early days of USAF—he had derided “opportunists” who betrayed the principles of “hard core” libertarians. Cornuelle was a central example. Identifying and addressing social problems through the private sector, he argued, amounted to “hopelessly trying to compete with the government in financing the ends that the Left decides to set for society.” Rhetorically, he continued, “Who can more abundantly and amply finance a Left-set goal such as a ‘college education for every man,’ or ‘palaces for old people’? The government, or a private welfare outfit?”
Cornuelle went on to advise a who’s who of nationally prominent Republicans in the late 1960s, including Ronald Reagan, George Romney, Robert Finch, and eventually Richard Nixon. During his 1968 campaign, Nixon struck Cornuelle-inspired notes, lamenting in a radio address called “The Voluntary Way” that “As government has strained to do more, our people have felt constrained to do less” and promising a more prominent role for private voluntarism. After his electoral victory, Cornuelle headed a White House Task Force on Voluntary Action, and remained an informal advisor as the Nixon administration began its initiatives in this realm.
As Cornuelle became enmeshed with the Republican Party, Rothbard’s critique grew sharper. The inaugural 1969 issue of The Libertarian, a newsletter he co-edited with Karl Hess, devoted nearly half of its four pages to a column called “The Nixon Administration: Creeping Cornuellism.” The wide-ranging, intensely personal critique’s central claim was that Cornuelle had drifted beyond repair from his libertarian roots, hypocritically claiming to promote private voluntarism while effectively growing the state. (It also cast Herbert Hoover’s efforts at a voluntary response to the Great Depression, often understood in contrast to the New Deal approach that followed, as its “complete forerunner” instead.) “Nixon-Cornuellism,” it argued, produced a system “where nothing is any longer distinctively ‘private’ or ‘public,’” one that “cloaks and camouflages the viper of statism in the soothing raiment of voluntaristic and pseudo-libertarian rhetoric.”
Rothbard’s critique of “Cornuellism” boiled down to two things. First, he disapproved of state efforts to encourage voluntary action, arguing that they inevitably expanded the government’s authority. Second, he rejected one of its deeper premises. For Cornuelle, American society contained a set of shared obligations, and the goal was to re-divide the pie, reallocating responsibility away from the state and toward the nonprofit sector. (A decade later, this was also the approach of influential conservative policy shops like the American Enterprise Institute.) Rothbard wanted to shrink the pie of shared obligations or perhaps eliminate it altogether. This was consonant with his broader political project, which privileged market-driven domination above basically all else: as Ganz puts it, “in Rothbard’s view, there is no transition from the state of nature into civil society; we remain forever in a Darwinian world.”
Adversaries of the Nixon administration’s voluntarism initiatives, such as the National Organization for Women, might have cast a skeptical eye on the idea that a president’s advocacy for voluntarism contained the “viper of statism.” So, too, might generations of left-leaning commentators since who have interpreted outsourcing and contracting as tools to weaken and delegitimize the public sector. Yet Rothbard did have a point. If Cornuelle’s rhetoric emphasized the voluntary sector as an alternative to the state at scale, the actions that followed tended to look more like collaboration in the model of the associational state. As recent research from Britain Hopkins demonstrates, USAF’s lasting legacy was not to preclude the federal government’s involvement in student loans, but rather to transform the Higher Education Act into an early example of a neoliberal approach of organizing public policy around private markets.
After Nixon, Cornuelle abandoned direct engagement with politics, but subsequent Republican efforts to encourage the supplanting of government programs with private voluntary ones—from the Reagan administration’s President’s Task Force on Private Sector Initiatives to George H.W. Bush’s “Thousand Points of Light”—reflected his ideas. So, too, did efforts in the 1970s of other self-appointed sector advocates from the center-right to the center-left of the political spectrum—including John D. Rockefeller 3rd, John Gardner, Waldemar Nielsen, and the collective voice of the Commission on Private Philanthropy and Public Needs. In the language of Cold War liberalism, these figures framed civil society organizations as a bulwark against authoritarianism, and they often echoed Cornuelle’s diagnosis of a private voluntary sector under threat from an ever-growing administrative state. That the name of the organization that emerged from this decade of efforts at self-definition was Independent Sector was likely no coincidence.
Beyond rhetoric, however, a trajectory similar to that of USAF unfolded in the relationship between the public, private, and nonprofit sectors in the last decades of the twentieth century. Sector advocates and their allies in government paid lip service to nonprofits’ independence, and depending on their ideological valence, perhaps their preferability to government programs as well. Yet as recent research by Claire Dunning and others has emphasized, at scale, the three sectors were not in fact engaged in zero-sum competition; rather, they became increasingly connected.
In his later years, Cornuelle distanced himself from this associational, public-private partnership-laden era. In the afterword to a 1993 edition of Reclaiming the American Dream, he lamented that “Most of the agencies in the philanthropic subsector of the independent sector have become quasi-governmental,” and that he could not “imagine why I thought for a moment that the state could be persuaded to contrive its own undoing.” (In an interview, he also reminisced that he and Rothbard “used to talk about blowing up the UN,” but that “Now the talk at these free market foundations is about fringe benefits.”) Rothbard, meanwhile, helped to found two libertarian think tanks, the Cato Institute and the Mises Institute, and eventually found a home in the extreme far-right “paleolibertarian” milieu.
Political actors like Musk and Ackman seem to be discovering in real time that the American government and the nonprofit sector are deeply intertwined. They are responding in ways that echo Rothbard’s critique of Cornuelle in the 1960s, and Corneulle’s eventual about-face in the 1990s. The long-term material consequences for nonprofit organizations are unclear—and may depend as much on the outcomes of fundamental questions about the separation of powers and the rule of law as they do on the fate of any particular agency or piece of legislation. On an ideological level, however, it is evident that the ground is shifting underneath the institutions that comprise the nonprofit sector.
Advocates for the sector’s well-being may respond by doubling down on well-worn rhetorical grooves, emphasizing nonprofits’ distance from the state and the importance of their autonomy and independence. Yet such an approach carries risks: the constituency for this narrative, forged in the political environment of the Cold War and the reaction to the growth of the administrative state, seems to be disempowered and shrinking. In its place is a movement that, in Rothbardian fashion, prioritizes personal enrichment and unchecked private power over the very notion of shared social obligations. In this political moment, the fates of the private nonprofit sector and the welfare state are profoundly linked, both ideologically and materially. Perhaps this presents an opportunity for a new vision—one that unapologetically embraces the central role of the public sector in creating and maintaining a democratic and egalitarian society.
-John Miles Branch
John Miles Branch is a PhD candidate in US history at Northwestern University. His research is focused on nonprofits and philanthropy, and his dissertation analyzes the growing prominence of the nonprofit sector in the American economy during the second half of the 20th century.
