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Not surprisingly, in view of the conservative lineup—and its origins as a business lobby—the institute is committed to free markets. In analyzing economic problems, says Institute President William Baroody, the son of a Lebanese immigrant, "our guys will look first for a market solution. If they can't find one, they'll seek a mixed market-Government solution. If they can't find that either, then :hey'll suggest a Government solution." One of A.E.I.'s preoccupations is pointing out the distorting effects of Government regulation on the economy. Laird's energy study goes so far as to assert that the U.S. has no energy shortage as such but a "production shortage," brought about by Government regulation that has artificially heightened demand and held down exploration and development by keeping prices unrealistically low.
Yet A.E.I. is no party-line outfit. Wiliam Fellner, a onetime Republican member of the Council of Economic Advisers and now an institute associate, once wrote a report contending that the Nixon Administration's initial fiscal and monetary policies were overly restrictive. This year another A.E.I. report sided with President Carter's decision to stop the Clinch River nuclear breeder-reactor project—in opposition to the views of Distinguished Fellow Ford, who wanted continued development.
Gauging A.E.I.'s influence is difficult, as the institute concentrates on trying to develop conservative economic and political ideas, and rarely takes a formal position on particular measures. But institute members can point to some specific successes. Sharp criticism by Murray Weidenbaum, an A.E.I. fellow and member of TIME'S Board of Economists, helped kill a 1975 proposal by then Vice President Nelson Rockefeller to pour $100 billion of federal money into an emergency energy program. Earlier this year the institute insistently pointed out what it saw as the bureaucratic dangers of the proposed Agency for Consumer Advocacy, which now seems dead. More generally, Tom Dernburg, chief economist for the Joint Economic Committee of Congress, says: "I certainly take their work seriously. A lot of it is very high quality." Winning such respect from moderate and liberal Democrats is undoubtedly the institute's biggest success.