reptile fund

One of the gentler disagreements among libertarians is the question of ignorance versus malice on the part of the bad guys.

The policy of FEE throughout its half-century existence has been to assume the best possible intentions from socialists and economic interventionists who merely lack a proper understanding of economic cause and effect.

This same position was taken by Mises, Hayek, and Hazlitt: assume good faith and educate the wayward statists.

Mises wrote in his memoirs,

An economist must deal with doctrines, not with men. He must criticize erroneous thought. It is not his function to reveal personal motives for protecting fallacies.

On the subject of his break from this gentlemanly “good faith” strategy, Murray Rothbard wrote,

When I was a young libertarian starting out, I was advised by [founder of FEE] Leonard Read: “Only be critical of bad measures, not of the people advocating them.” It’s OK to criticize government regulation, but not the people advocating them. One big trouble with that is that then people remain ignorant of the ruling class, and the fact that Business often pushes regulatory measures to cartelize the system, so I went ahead and named names….

Looking over Mises’s memoirs, I find that he was perfectly aware of the malicious intentions of his policy opponents. In 1909, Mises wrote a paper in support of a new legal requirement that the central bank of the Austro-Hungarian Empire redeem its bank notes in gold. The central bank’s vice president invited Mises to come in and talk. The veep offered Mises inside materials for his future research on the condition that the bank get to review all his essays before publication.

“I declined politely but firmly. … When I left Herr Waldmayer’s office, I had the impression that he would have offered me a sizable sum if only I had been a little less recalcitrant.”

Mises’s mentor, Böhm-Bawerk, who had been Austria’s finance minister, later explained to him that unclaimed gold was invested abroad, with the profits siphoned off into a secret fund for bribing journalists and politicians. Böhm-Bawerk himself had only learned of the fund when the Hungarian secretary of the treasury complained to him that bribes were going disproportionately to Austrians instead of Hungarians.

Mises concludes,

The sums in this case were more modest than those of Bismarck’s famous Reptilienfonds but they sufficed to explain the strong opposition of the Bank management and other men against a reform which could have dried up this source.

What, you might ask, were “Bismarck’s famous Reptilienfonds“?

If you google “Bismarck” and “reptile fund” together, you’ll learn that German Chancellor, Otto von Bismarck (1815–1898) used money confiscated from the exiled King of Hanover to create a secret fund for bribing reporters and bankrolling political movements in Germany and abroad. He called it the “Reptile Fund” because of his contempt for those who took such money.

If you google “reptile fund” by itself and skip the pages having to do with financing city zoos, you’ll see that the term is still used generically (especially among the British and Irish) for off-the-books government spending on manipulating both the domestic and foreign press.

Good term. We should use it more often.


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