Liberty Fund

It was always a mistake to tell Pierre F. Goodrich you were too busy to read. “What are you doing,” he would reply, “between midnight and 2:00 a.m.?”

Goodrich himself spent the wee hours buried deep in books, engrossed in philosophy. When he had an idea or was intrigued by a passage, he would pick up the phone and call a friend, no matter the hour.

“Pierre Goodrich was not an easy person to understand,” says T. Alan Russell, who worked closely with him. Goodrich had an intense devotion to the life of the mind, going so far as to bring along a suitcase full of books on his honeymoon. Reserved and introverted, he avoided small talk, but he would stand for hours in pouring rain without an umbrella to continue a philosophical conversation

The Entrepreneurial Goodriches

In 1832, Goodrich’s ancestors settled in Randolph County, Indiana, near the Ohio border. James P. Goodrich, Pierre’s father, was the second of five Goodrich boys. James and his brothers worked on the family farm, and the boys showed a special knack for enterprise, doing farm chores for neighbors and selling their own homemade soap. The brothers stuck together, and some of the family businesses they started in their youth were going concerns decades later.

By the time Pierre was born on September 10, 1894, his father was on the verge of launching a political career that would see him elected Governor of Indiana in 1916. Eventually, he became a Republican elder statesman. All the while, he and his brothers continued to build their businesses. They were involved in farming and land management, natural gas exploration, grain distribution, and banking.

The Goodrich fortune took off with the arrival of late-19th-century technologies. As the Goodrich brothers were working harder and accumulating more and more capital, the United States was experiencing a streak of remarkable inventive genius. The Goodriches did not invent the telephone or the electric light or discover uses for natural gas, but their wealth enabled them to get in on the ground floor, establishing lucrative franchises employing these new technologies. “Within a short time,” writes family biographer Dane Starbuck, “the Goodriches held a monopoly in most basic utilities: coal, electric, water, natural gas, and telephones.”

By the late 1920s, however, James Goodrich doubted that the good times would continue. “Uncle Jim came into a family meeting and just told his brothers, ‘We’re going to get out of the utility business,’” related James’ nephew Bud Goodrich. “He sensed something was wrong with the economy and that things were going to happen that he didn’t like. Uncle James told his brothers, ‘We’re going to pool our money and form a corporation so if, down the road, we see something we want to buy or something we want to invest in, we’ll have the cash to do it.’” The Goodriches sold their interests in almost all their utilities and invested their profits in short-term certificates of deposit.

Two years later, the stock market crashed.

“Constant Reinvestment”

James Goodrich had taken a big risk—jumping out of the profitable utilities business. It paid off. The family was flush with cash when cash was a scarce commodity. Economic misery meant opportunity for the Good-riches; they began buying companies at bargain-basement prices. When they bought what would become the Indiana Telephone Company (ITC) in 1934, they paid far less (a few cents per share) than another potential buyer had offered—but they paid in cash, whereas the other buyer had only credit. (The Goodriches owned ITC until 1978, when it was sold at $107 per share.)

Pierre (he pronounced it “peer,” with a characteristically Midwestern lack of pretension) took charge of ITC. But he didn’t take risks like his father did. Perhaps it was his upbringing—his mother had forbade him to go to the local swimming hole unless he promised not to get wet, or to play baseball unless he promised not to run—but whatever the cause, Pierre Goodrich was cautious, exacting, and methodical. And, it turns out, these were exactly the right traits for running and growing the family’s now more established businesses. Moreover, while Pierre may not have had James’ flair for risk, he had the same good judgment about business—one he honed through Socratic discussion. “He’d rather aim and fire than fire and aim,” explains T. Alan Russell.

For example, Goodrich was extraordinarily prudential about hiring people. When Russell interviewed for a senior post at ITC, Goodrich personally interviewed him for two solid days. “The very first question that Pierre Goodrich asked me was ‘What is the difference between a paramecium and an amoeba?’” Russell recalls. “I thought they were both one-cell animals and that one reproduced differently than the other—and that’s as close as I came to answering a question for two days!” Goodrich’s interview questions encompassed religion, science, culture, history, philosophy—anything that would indicate an open, inquiring mind, which Goodrich prized more than anything else. A curious employee would seek all the information needed to make a rational business decision.

As Pierre Goodrich took the helm at more of the family’s companies, he focused on increasing actual value through what Starbuck calls “constant reinvestment.” By 1946, through mergers and purchase of stock, he acquired control of the Ayrshire Collieries Corporation. By 1969, applying principles of reinvestment, Goodrich had increased the company’s sales by 26 times and its income per share 36 times over, making Ayrshire Collieries the nation’s 11th-largest coal mining firm.

“Constant reinvestment” is not only a good way of describing Goodrich’s business practices, but also his intellectual life and his charitable giving. He was constantly returning to the sources, and he devoted his giving to helping others “reinvest,” intellectually, in the origins of liberty.

“What Am I? Can I? Ought I?”

Education was at the heart of Goodrich’s management style. “He always operated the company like a Socratic discussion,” Russell reflects. Questions would lead not to pat answers but to more probing questions. “He did not like expedient answers.”

Indeed, education was at the heart of how Goodrich lived his life. “‘Education’ is something that happens within an individual,” he wrote. “No matter how formally educational the setting or the process, if nothing happens to the supposed learner, nothing educational has taken place.” Goodrich found this inner education at his alma mater, Wabash College, from which he graduated in 1916. His intellectual pursuits were formed by Wabash, whose creed at the time declared that “habits of mind, rather than mere information, count largest in the long run. The foundation of the educational process is Discipline, and Discipline is not secured by superficial pursuit of many studies.”

Goodrich joined the Wabash board in 1940, and rather than have students pursue “many studies,” Goodrich advocated for the Great Books curriculum then being popularized by Mortimer Adler and Robert Maynard Hutchins. Wabash created a Great Books colloquium—employing Socratic dialogue—in 1946.

It was at Wabash that Goodrich erected a monument to the study of liberty. In 1957, he began planning the Goodrich Seminar Room, to be housed in Wabash’s main library. The room was built according to his precise directions: 38 feet wide by 50 feet long, with an 18-foot ceiling. On the walls are massive limestone steles marked with a chronological history of liberty. Starting with the cuneiform symbol ama-gi, the oldest known word for “freedom,” Goodrich’s chronology follows philosophical landmarks from the ancient Sumerian Ur-Nammu Code to the Declaration of Independence. “It is hoped that the individual who enters this room will immediately feel the humbling presence of the centuries of written communication portrayed by the walls,” Goodrich said.

At the center of the room is a massive, oval table, designed for the same kind of discourse that Goodrich pursued in his companies. Bookshelves underneath the limestone slabs contain major works by the authors listed on the wall, plus other writings that have contributed to the understanding of liberty. (The books thus extend the story of liberty beyond the Declaration of Independence to the 20th century.) During Socratic discussions, Goodrich intended for students to get up and peruse the books, which he had donated from his personal library.

From the 1940s through the 1960s, Goodrich was involved in the creation and growth of many other liberty-oriented organizations, including the Mont Pelerin Society, the Foundation for Economic Education, the Intercollegiate Studies Institute, the Institute for Humane Studies, and Human Events. By the 1960s, however, he grew disenchanted with Wabash College. “[O]n further reflection, [I] believe the College is not headed in the direction of further individual freedom and perhaps my views would not accomplish much,” he wrote to Wabash’s president. “I am very busy and it is likely that I would also waste my time.”

Despite his best efforts, Wabash had been swayed by the countercultural and radical tides of the ’60s; moreover, he could not sway it further in the direction of his beloved Socratic dialogue and Great Books curriculum. And while Goodrich enjoyed close friendship with Byron Trippet and Benjamin Rogge (Wabash’s president and dean, respectively, during Goodrich’s most active years on the board), Trippet’s successors resented Goodrich’s efforts to introduce his ideas into the school’s curriculum and teaching. When Goodrich died, he left Wabash $155,000—far less than the college had hoped for.

Instead, Goodrich poured his time and money into an educational organization that would be better able to achieve his charitable intent: Liberty Fund.

“Some Hopeful Contribution”

In the ’60s, Goodrich was at the helm of Ayrshire Collieries, ITC, Peoples Loan & Trust Company (the Goodrich family’s bank in Winchester), a holding company for Central Newspapers (owner of the Indianapolis Star), and several smaller firms. But he was increasingly devoted to Liberty Fund, which he had founded in 1960. Goodrich began selling off his companies and using the proceeds to build Liberty Fund’s corpus, which reached $26 million by the time Goodrich died in 1973.

Goodrich envisioned Liberty Fund as an operating foundation. He set its course with his ironclad “Basic Memorandum.” In this 129-page “document of hope,” as Liberty Fund chairman T. Alan Russell calls it, Goodrich set forth in declaratory prose the ideals of the fund and the methods designed to preserve his charitable intent. For example, Goodrich enjoins directors from making general operating grants or gifts for “grounds and buildings.” He offers several qualifications for directors, including how to assess “the character of the [potential director], his humility, his desire to continue his education, and his integrity.” Appended to the Basic Memorandum is Goodrich’s list of 76 essential thinkers and sources, from Plato and Augustine to Luther and the Declaration of Independence.

Liberty Fund’s officers and directors treat the Basic Memorandum with great reverence. They review Goodrich’s guidelines for Liberty Fund’s programs several times a year, says president and CEO Chris Talley, “repairing to the Basic Memorandum to think about the idea of Liberty Fund and what Mr. Goodrich wanted.” But Goodrich did not want Liberty Fund’s future officers to use the Basic Memorandum as an intellectual crutch. Instead, Talley explains, they discuss it not to determine “what Mr. Goodrich would want to have published, but—under his guidelines—what works are important to keep in print.” Or, as former Liberty Fund senior fellow William C. Dennis put it, “The Basic Memorandum doesn’t tell us what to do; it tells us how to think about what we do.”

Talley and Russell are confident that Liberty Fund today honors Goodrich’s intent. Its core programs—seminars and publications—were near and dear to Pierre. During his lifetime, Goodrich planned 11 seminars, the last of which was held after his death. His seminars were modeled after his approach to business meetings, Russell explains: free dialogue, probing questions, and the pursuit of wisdom.

These “Socratic conferences,” as Talley calls them, are somewhat infamous for following precisely the pattern Goodrich established. A group of 12 to 16 invited participants convene around a table to address questions inspired by common readings. A moderator poses questions and regulates the flow of conversation, but he does not give a lecture, nor does he even really guide the discussion. Every participant is treated equally, and conversations are continued outside the six formal sessions over meals and cocktails. Conference topics run the gamut of Goodrich’s interests, from political philosophy and law to economics and religion—even to “Redemption and Human Freedom in Bach’s St. Matthew Passion.” Discussions are often in reference to the work of a great thinker, such as Locke, Madison, or Tocqueville.

Goodrich was also a big believer in great books (not to mention the “Great Books”). He read voraciously and often recommended books to his business colleagues. “He would give you a book,” said Talley, who first encountered Goodrich working for him at Peoples Loan & Trust in the late 1960s. (Goodrich gave Talley a copy of Ludwig von Mises’ Human Action, which he regarded as superior to Paul Samuelson’s Economics as an introductory text.) “He would see the next time you met whether you’d actually engaged the book, and if so, he’d want to talk a little about ideas, and more books would come.”

Thus, Liberty Fund publishes 10 to 12 books per year, bringing into print important works that are not readily available and selling them at deliberately affordable prices. Its editions include scholarly materials that help readers to wrestle with these texts as Goodrich intended; for example, Liberty Fund’s edition of the Federalist Papers is the historically significant “Gideon” edition—the first to include Madison’s revised papers alongside Hamilton’s and Jay’s—and was co-edited and introduced by eminent constitutional scholar George W. Carey.

The ideals expressed in the Basic Memorandum are timeless, and thus Liberty Fund’s programs remain in line with Pierre Goodrich’s ideals. As technology has changed, however, so have Liberty Fund’s educational offerings. “We have a very extensive presence on the web, and one that we think is very consistent with donor intent,” says Talley. “Mr. Goodrich was very technologically minded, and wanted to be at the forefront, if it was affordable, of technological improvements.”

Among these newer resources is the Online Library of Liberty, a discussion forum for and repository of more than 1,000 classic texts about individual liberty, available as PDFs, in HTML, and for e-readers. Liberty Fund also offers the Library of Economics and Liberty, which features books, blogs, and podcasts on aspects of economic liberty.

The Next 50 Years

This year, Liberty Fund reaches the half-century mark. Its endowment grew to over $430 million by 2008, although it has fallen since then. Liberty Fund organizes about 170 Socratic conferences per year—and has convened nearly 3,500 worldwide since its founding. Its book catalogue encompasses more than 360 titles spanning subjects from economics to political thought. But Liberty Fund is not celebrating itself so much as its foundational principles; this year, Talley says, it is revisiting the conference themes that Goodrich composed during his lifetime. At the same time, the foundation is preparing for when it will be run by people with no memory of Goodrich’s lifetime.

At the moment, says Russell, 6 of Liberty Fund’s 12 directors knew Goodrich personally. Two others have close connections to him short of having known him personally. But how will subsequent generations know about Goodrich? One way is through the Basic Memorandum. Another is through constantly returning to Goodrich’s extensive written record.

Still another way of protecting donor intent is through habitual self-examination. Liberty Fund’s staff report extensively on its programs to the board of directors. The point is not to show off “results” to outsiders. Rather, “what we’ve tried to do is build a model,” explains Talley, “a reporting system that will propel the work that we’ve been doing as far into the future as we can, for the future generation that will have no personal knowledge of Pierre Goodrich.”

“Liberty is under attack, and it’s been under attack for a long time, and I think the intensity of that attack is going to increase,” adds Talley. He believes that Liberty Fund’s mission will become even more vital in its next half-century. “As long as we can keep the discussion and discourse alive, we will have accomplished something.”

Pierre F. Goodrich was fascinated by the Dark Ages. On the walls of the Goodrich Seminar Room at Wabash College, he deliberately left “a great deal of blank space” punctuated by only a few names, which symbolize those who preserved the ideals of freedom and the wisdom of the past. “There was a night following the Roman dictatorship, which was, as all dictatorships would be, evil and corrupt,” Goodrich wrote. “In this night, even the tools of the Greeks lay unused for lack of knowledge of them. But the Renaissance and the Reformation carried on.” As did Pierre Goodrich; as does Liberty Fund.


This article was originally published in Philanthropy‘s summer 2010 issue.