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Summary Article: Cato Institute
From Encyclopedia of Business Ethics and Society

The Cato Institute, founded in 1977, is a nonpartisan research organization based in Washington, D.C. The mission of the self-described market liberal think tank focuses on traditional American principles of limited government, individual liberty, free markets, and peace. In keeping with these free market principles, the Institute accepts no governmental funding or endowments, instead relying on private donations to support its $14 million annual budget.

The Cato Institute keeps its intellectual forebears in the forefront, as evidenced by its naming, after Cato’s Letters. Advocates rely on the values propounded in these revolutionary pamphlets, along with the written works of the founding fathers. While embracing modern individualist philosophers such as Robert Nozick and Ayn Rand, the Institute demonstrates a special attachment to Friedrich Hayek. Hayek argued that freedom for all would allow genius and innovation to emerge from any sector or strata of society, ultimately leading to social benefits for all.

Cato researchers explore market-liberal positions on diverse domestic topics such as education policy, labor law, homeland security, and tobacco. Indeed, the Institute has been looked to by a series of presidential administrations as the leading source of research and analysis on the privatization of social security, a research program that it formalized in 1995 with the founding of its Project on Social Security Choice. The Cato Institute also addresses global issues. While critical of the International Monetary Fund’s and World Bank’s fostering of financial dependence among developing economies, the Institute is a strong advocate of free trade, as evidenced by the Cato Center for Trade Policy Studies.

The Institute’s market-liberal economic position is accompanied by an equally libertarian social position. The Cato Institute’s goals include the pursuit of liberty for all citizens, primarily in the form of equal freedom from governmental intervention. Their positions often align with “socially liberal” politics, in that the Institute supports sexual and racial freedoms and decries the “war on drugs.” The Institute also disagreed vocally with the Bush administration’s decision to invade Iraq, arguing that the military should instead focus on its legitimate role as defender of homeland soil.

The Cato Institute’s critics claim that it is a front for corporate interests and foundations anxious to benefit from these antiregulatory advisers in Washington. Others argue that it is misleading to label the Institute nonpartisan, a term that may describe its relationship to the two leading political parties in the United States, but that belies its strong philosophical position.

The Cato Institute publishes books and policy studies, along with their regular publications Cato Journal, Cato Policy Report, Regulation magazine, and the free quarterly Cato’s Letter. In addition to holding regular policy and book forums in Washington, D.C., the Institute also hosts conferences in major cities around the world.

    See also
  • Cowboy Capitalism; Freedom and Liberty; Free Market; Friedman, Milton; Hayek, Friedrich A.; Individualism; Libertarianism; Nozick, Robert; Rand, Ayn; Smith, Adam

Further Readings
  • Cato Journal [Web site]. Retrieved from
  • Katz, M. B. (2002). The price of citizenship: Redefining the American welfare state. New York: Owl Books.
  • Marcoux, A. Business ethics gone wrong. Cato Policy Report, 22, (2000). 1.
  • Rich, A. (2004). Think tanks, public policy, and the politics of expertise. New York: Cambridge University Press.
  • Solomon, N. (1998, January 1). The Cato Institute: “Libertarian” in a corporate way. Retrieved October 28, 2005, from
  • Lori Verstegen Ryan
    Copyright © 2008 by SAGE Publications, Inc.

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