November 10, 1995
To Contributors and Friends of the Ayn Rand Institute:
In 1994, for the first time since its inception, I did not contribute to the Ayn Rand Institute. I will not do so again until the current Board of Directors is changed and certain policies of the Institute are reversed.
I encourage you to join me in this protest against how the trustees of ARI are spending your money in Ayn Rand's name.
The reason for the protest is the dispute between the principals of ARI and the owners of The Jefferson School of Philosophy, Economics, and Psychology, Edith Packer and George Reisman. I have known all of the participants in this dispute for many years, and I know the facts behind the conflict. The charge that the Reismans are immoral is worse than groundless; over the last twelve months, this charge has become a "big lie." No evidence has been brought forth of such an alleged breach of morality – nor will there ever be. The only "sin" committed by the Reismans is that they – especially Edith – said true things that Messrs. Schwartz, Binswanger, Berliner, and Peikoff did not want to hear. George's "sin" is that he has accomplished more intellectually than these gentlemen could ever dream of. (George's book, incidentally, will be published next year, and it will become – I have no doubt – the economics treatise of the twenty-first century. Neither ARI nor Second Renaissance Books, however, will promote it,) The "clinching proof" of the Reismans' alleged immorality, it has been said by these gentlemen, is that the Reismans dared to expose the charges against them in order to defend themselves!
As for my part in this dispute, I wrote two letters in 1993 to the Reismans criticizing the then-proposed Objectivist Graduate Center. I have attached these letters so you may see that the Reismans were not the only ones who doubted the ability of these gentlemen to manage the practical dissemination of Ayn Rand's philosophy. (My letters supported the two letters that Edith and George wrote at the same time.) ARI never responded to my letters, although they continued to send me "major contributor" solicitations; from third- and fourth-hand sources, I heard that they were impugning my character. Dr. Peikoff did write to me, expressing surprise at the "tone" of my letters and stating that my comments were irrelevant because ARI is not a business.(!) (He was technically correct that a charity is not a producer of wealth. Technically, it is a distributor of wealth – yours, which is why you should take care to see first hand how your money is being spent. The principles of good management, however, apply alike to profit and nonprofit organizations.) The Institute's message was that criticism is not allowed. I disagree.
These gentlemen do not hold a blank check from Ayn Rand, as they seem to think they do. And they certainly do not, or should not be allowed to, hold an alleged right to spend contributor money as if that money were their own. They are fiduciaries of your property and, as such, are not above criticism. This applies to Dr. Peikoff, too. (Many times recently, Dr. Peikoff has said privately – and publicly, in his Understanding Objectivism course – that he does not know how to judge people. But now, all of a sudden, he can judge the Reismans as immoral, and even give public lectures on how to judge people?) These gentlemen are executives of a million dollar corporation; if they cannot take a little heat once in awhile from their contributors, they should damned well get out of the kitchen.
I am writing you to ask you to check their premises. Ask them how they spend your money; ask them to justify every penny, to send you balance sheets and income statements for the last ten years. (A nonprofit corporation still must show an excess of donations over expenses in order to remain solvent; the "nonprofit" designation is simply a matter of legal form.) Ask them to show you their business plans for the OGC, but please do not be misled by the insufferable puffery they publish in Impact and the ARI Newsletter. Speak up and criticize, as you would as the customer or investor of any for-profit corporation. Above all, check their premises about the philosophy of Ayn Rand. Ask yourself, do they really understand it – especially when they arrogantly charge that responsiveness to contributors amounts to "abject subjectivism"? Or are they just riding on a glow that you have granted them as representatives of Ayn Rand, by virtue of their positions at the Institute?
Check their premises. I know you will check mine, if you have not already done so; I welcome criticism because that is how I learn. Be wary, however, of engaging in debates with these gentlemen; they are expert debaters who can make anything sound good at first – but is it? For example, you may have already heard it said that the OGC is funded primarily by one contributor; thus, no one else has a right to complain. That may silence a few critics, but some portion of your money still goes to support the OGC; therefore, anyone who gives two dollars to the Institute would have the moral right to send the kind of letters I did in 1993. Be wary, also, of their appeals to authority and majority when they attempt to answer your criticisms and, especially, your questions about the Reisman dispute. Be wary of their arguments from intimidation ("of substituting moral judgment for intellectual argument," VOS, p. 142) and their claim that the Institute and OGC must not be judged by the principles of business because they are "unique, experimental entities" that must be given free rein.
The principals of the Ayn Rand Institute have allowed themselves, through their paranoid and grossly exaggerated reactions to our letters of 1993, to alienate the two greatest living assets of Objectivism. Note well: the attackers in this dispute are these gentlemen, not the Reismans. The Reismans performed their roles as advisors to the Institute (and I as contributor). Unconstrained rationalism, which all of these gentlemen suffer, eventually exacts its price – as lack of contact with reality, as lack of respect for facts, and as the inability to judge people accurately or fairly.
If the Ayn Rand Institute is allowed to turn its back on Edith Packer and George Reisman, then I am sorry to say that a cult of mediocrity, spending a lot of your money, is all that will be left. (And I mean "mediocrity" as Ayn Rand defined it: "an average intelligence that resents and envies its betters.")
Test what I have said about criticism not being allowed – demand that these gentlemen be accountable to you and hold no secrets about how the Institute or OGC is run. If you agree with me that the Institute has unjustly maligned the Reismans and suffers from a lack of professional leadership, then let the current leadership know by withholding your contributions and demanding that they reverse their policies on the Reismans and TJS.
These gentlemen urgently need a lesson from the marketplace in the objectivity of value.
If you have not read George's November 15, 1994, letter and packet of information that detail the nature of the accusations against Edith and him, send me a self-addressed, stamped 9 x 12 envelope (with $1.70 postage at the above address and I will send them to you, along with an excellent, factual analysis of the packet by Mr. Jack H. Schwartz of Sayville, NY. (George's packet includes his and Edith's 1993 letters.)
One comment about my attached October 26, 1993, letter concerning the legality of paying Directors: that issue has apparently been resolved by expanding the size of the Board of Directors. ARI, however, it turns out, is a Pennsylvania corporation (which the management of the Institute at the time did not know) and therefore is governed mainly by Pennsylvania, not California, law. I had assumed that ARI was a California corporation because my reading of the nonprofit corporation literature had told me that it is more expensive for a nonprofit business to operate out of California while incorporated in another state. I mention this, should any of you wish to inquire further about how efficiently your money is being spent.
P.P.S. Contrary to what you may have heard, or will hear in the future, criticism of the management of the Ayn Rand Institute – specifically of Messrs. Schwartz, Binswanger, Berliner, and Peikoff – is not equivalent to criticizing Ayn Rand or the philosophy of Objectivism. These gentlemen desperately want you to buy that premise – to divert your attention away from their premises and behavior. They want you to see the Reismans, Linda Reardan, and me as members of that heretical camp known as "enemies of Objectivism."
Loyalty to Ayn Rand, however, and to her extant writings does not imply or require loyalty to these self-appointed guardians of Objectivist purity. Recall that Miss Rand sympathized somewhat with Karl Marx' s statement, "But I am not a Marxist" (TOF, Feb. 1980), meaning that she, Ayn Rand, was not a "Randist" and therefore must not be confused with her followers. Recall also what she said in the inaugural issue of The Objectivist Forum – namely, that she did not consider TOF to be "the official voice of Objectivism [nor is it] my representative or my spokesman." This certainly applies to the Ayn Rand Institute and to its management.