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Book Review: The Tax-Exempt Foundations by William McIlhany, II


Arlington House, 333 Post Road West, Westport, Connecticut 06880)
302 pages • $20.00 cloth

This study explores the degree to which the major tax-exempt foundations have advocated, propagandized for, and mobilized opinion on behalf of statism and collectivism in the areas of education, health policy, and public welfare. It reviews the various congressional investigations of foundations from 1912 to 1969, and it specifically examines the major foundations (Carnegie, Rockefeller, and Ford), as well as the smaller activist foundations, such as The Twentieth Century Fund, the Field Foundation, and the Stern Fund. McIlhany has sifted through the publications of those founda tions, he has weighed the activities promoted by them, and he has had extensive interviews with those in charge.

McIlhany’s research corroborates the suspicion that tax-exempt foundations are “promoting, almost exclusively, socialism at home and world government abroad, and doing so at taxpayers’ expense.” These ideological goals are consistently of a coercive and anti-free market nature, “controversial at best and destructive of the entire social system which originally produced the funding wealth at its worst.”

The author’s philosophical persuasion is libertarian and Austrian. He advocates a laissez-faire economy in which government would be limited to the provision of local criminal justice and national defense, all other products and services being offered on the free market. He does not think “it is unreasonable to suppose that under such a system individuals would voluntarily pay the state for its two functions since they would not be forced to pay for anything else.” And, as he notes, “in a free economy all problems relevant to tax-exempt foundations would disappear, except instances of criminal conduct punishable under other laws. All charities could function as competing, profit-making companies, offering some investment return to their contributors, or they might compete solely on the basis of their beneficent accomplishments.” Such, he writes, is the ideal form of public accountability.

Meanwhile, foundation promotion of statist orthodoxy must be challenged “if we are to be able to create sufficient public understanding to prevent the foundations from destroying what remains of the system that made possible the creation of accumulated wealth which sustains them.” McIlhany has accomplished a major step toward that public understanding. He has produced an excellently researched, substantively documented, analysis of the impact of the tax- exempt foundations. This book is definitely worth reading, including the footnotes.


November 1981

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April 2014

Around the world, people are struggling to throw off authoritarianism, with deeply mixed results. From Egypt to Venezuela, determined people build networks to overthrow their regimes, but as yet we have not learned to live without Leviathan. In this issue, Michael Malice and Gary Dudney discuss their glimpses inside totalitarian regimes, while Sarah Skwire and Michael Nolan look at how totalitarian regimes grind down the individual--and how individuals fight back. Plus, Jeffrey Tucker identifies a strain in libertarianism that, left unchecked, could reduce even our vibrant movement to something that is analogous to the grim aesthetic of architectural brutalism. The struggle for our lives and freedom is a struggle for beauty; it begins inside each of us.
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