Spotlight: Freedom's Lobbyist


There are 15,000 lobbyists in Washington, D.C. Nearly all are in the employ of vested interests either looking for special favors or protecting themselves from the depredations of Capitol Hill. Of the tiny minority of lobbyists whose motives are ideological rather than economic, most are traditional "public-interest groups" who believe that more government is the solution to problems. Only a handful lobby for a reduction of state power and an increase of individual liberty.

Fred Smith of the Council for a Competitive Economy is one of those few who plead for a voluntary, market-based economy. While other lobbyists are trying to protect themselves from the legislative guns, Smith is trying to drive spikes into them.

"The massive wall of big government was not built by socialists," says Smith in summing up his purpose. "It was built brick by brick by ad hoc coalitions of special interests. I believe the path to economic freedom is to reverse the process, to dismantle it brick by brick. Removing strategic bricks is even better, because they cause others to fall too."

Given Smith's background, his present defense of economic freedom is remarkable. After getting his degree in mathematics, he completed course work toward a doctorate in operations research. Prepared to plan the future of anything that seemed in need of planning, he went to the Environmental Protection Agency (EPA) in 1971 to save the environment. During his five years there, he rose to the position of senior policy analyst. Though his initial political orientation at the EPA was by his own description "knee-jerk liberal," he was thrust into the position of studying market alternatives to regulation. "I realized," he says, "that there was an environmental problem despite the EPA" even though the agency was created to solve environmental problems. Smith grew disenchanted with the agency and left it.

From there he went to the Association of American Railroads (AAR), a trade group for the freight rail business. His original area of specialization was transportation financing, but he found himself lecturing federal and state analysts on the anticompetitive effects of their regulation. Working around railroads turned out to be an eye-opening experience for the young planner. It was then, Smith says, that he lost his last vestige of faith in central planners who think they can rationally determine the course of society.

After becoming aware of REASON through an article on railroad deregulation and learning of the Austrian school of economics, Smith began studying in depth the anticompetitive effects of transportation regulation. He is still a leading authority on subsidies to the trucking industry and the disadvantages they impose on the rail industry.

In 1980, while still with the AAR, he heard about a new lobbying group called the Council for a Competitive Economy (CCE) and immediately joined as a supporter. "I had been doing the research and laying the intellectual groundwork for deregulating transportation, but that was not enough," Smith recalls. "I was increasingly frustrated because all the good arguments in the world were not changing one politician's vote. They just weren't hearing them. I realized that somebody had to put some pressure on the Hill."

According to Smith, when he first joined the CCE, he was still "only efficiency-oriented," but he was deeply impressed by the moral arguments for the market that he heard through his contacts with the organization. He went to work for the council last year.

Since then, Smith has assisted the CCE in fighting some important battles on the economic front. Smith and the council spearheaded the attack on the nickel-a-gallon gas tax last fall. Though the tax passed, the opposition that existed was organized largely by the council.

A dedicated environmentalist, Smith is working with groups like the Sierra Club to stop government-subsidized destruction of the environment. In the process, he has had considerable success educating ecologists to a property-rights approach to environmentalism. Though it is possible that the mainstream environmentalists will rely on free-market arguments only so long as it comports with their goals, there may be some lasting effects of these efforts. For one thing, Smith helped organize one of the most unlikely coalitions of groups imaginable to fight projects like the federally funded Clinch River breeder reactor and the gas tax. This curious group includes the National Taxpayers Union, the Sierra Club, Friends of the Earth, the Conservative Caucus, and the National Pro-Life PAC.

Smith was also instrumental in starting the Jefferson Group, an informal biweekly meeting of promarket scholars, journalists, and advocates. They meet to cross-pollinate and share ideas on how best to deploy the combined resources of those working for free markets.

Smith and the CCE take on a myriad of anticompetitive policies, including market orders, transportation and energy regulation, and the proposed funding increase for the International Monetary Fund. They have also begun to bring resources to bear on opposing proposals for a national industrial policy and restrictions on foreign trade, which Smith calls "the get the 'Nips' policy."

Free-market supporters, says Smith, "have considerable intellectual ammunition now, but that isn't enough. We need troops on the front lines to take the ideas to the Hill. That's what the council is doing, and that's why I'm here."

Patrick Cox is a frequent guest columnist for USA Today and public affairs director of the Pacific Institute for Public Policy Research.