The most vulnerable among us need three things from any social justice agenda

or antipoverty program: transformation, relief, and opportunity. There are no short-

cuts on the path to a flourishing and satisfying life, but the free enterprise system
delivers transformation, relief, and opportunity better than any other.
That makes AEIs free enterprise mission a moral one. All of us here are fortu-
nate and grateful to be a part of the fight to bring freedom, opportunity, and the
earned success and true happiness that can follow, to all Americans.
And who better to discuss the achievement of happiness, free enterprise, and
the moral link between them than the Dalai Lama, who visited AEI for a two-day
summit in February?
His Holiness reminded us that personal moral transformation is the essential
foundation of a flourishing life. Happiness, as the Dalai Lama put it, comes from
within. We get that transformation by wholeheartedly engaging in four things
faith, family, community, and work.
Building a Free Enterprise Movement
by AEI President Arthur Brooks
Issue No. 2, May 2014
Enterprise Report
Restoring Liberty, Opportunity, and Enterprise in America
We were delighted that the Dalai Lama found the conversation enlightening as well. He
develop[ed] more respect for capitalism, he said, after discussing just how important the
free enterprise system is to Americans engagement in faith, family, community, and work.
The Dalai Lama was followed in short order by Bill Gates, who visited AEI in March for a
conversation about how, through free enterprise, policymakers and private charity can combine
forces to fight poverty around the world.
Philanthropists like Bill and Melinda Gates focus on the second pillar of human flourish-
ingmaterial relief. The Gates Foundations work in Africa, for example, prevents disease
and modernizes agriculture, bringing relief in a targeted, data-driven way to millions of the
worlds poorest.
But private philanthropy alone cannot lift up the millions who suffer. Fifteen percent of
Americans live below the poverty line in a country where charitable giving totals more than
the GDPs of many European countries. A genuine, limited social safety net is indispensable to
a free and prosperous society, which is why AEI scholars are working on reforms that will
strengthen and preserve our safety net.
The third pillar of human flourishing is opportunity. AEIs economists are studying the
barriers to education, employment, and credit for all Americans, particularly for the poorest
among us. Robert Doar, the former human resources commissioner of New York City, has joined
AEI as our new Morgridge Fellow in Poverty Studies. Kevin Corinth, an economist finishing his
dissertation on homelessness at the University of Chicago, will join Robert at AEI in June.
To help AEI communicate our moral case for
free enterprise as persuasively as possible to every
American, we have launched the Campaign for Free
Enterprise and American Progress. AEIs donors are
justly proud of the Institutes 75-year legacy and are
showing tremendous support as we expand AEIs
communications and research to rise to the challenges
of the next 75 years.
A critical part of meeting those challenges will
be developing the next generation of free enterprise
leaders. You can read in the following pages about
all that AEI is doing with college students on 400-plus
campuses and with scores of young professionals
whose careers are shaped early on by AEI.
Thank you for your commitment to our fight.
Arthur Brooks
President, AEI
In Memoriam
Murray Weidenbaum, 19272014
At the heart of AEIs long legacy have
always been our scholars. One of
the giants in AEIs history, Murray
Weidenbaum, passed away on
March 20. He was one of AEIs
most respected and tireless defenders
of free enterprise and was a towering figure in the
deregulation debates of the 1980s. (Dont just stand
there, undo something! he used to admonish us.)
He was an economist in five different presidential
administrationsmost notably in Ronald Reagans as
the first chairman of his Council of Economic Advisers.
He served over the years as an AEI scholar, a member
of our Council of Academic Advisers, and a coeditor of
our influential magazine Regulation.
Photo courtesy of Washington University in St. Louis
AEI is turning a new page in its 75-year
history. We have launched a $100 mil-
lion Campaign for Free Enterprise and
American Progress, knowing that now
is the time to redouble our fight for
freedom, prosperity, and flourishing
in America.
This campaign will allow AEI
to move into a permanent home
which we are proud to name after
the vice chairman of AEIs board,
Daniel A. DAnielloafter more than
40 years leasing space in Washing-
ton. The location of our future head-
quarters could not be more fitting:
the building is a National Historic
Landmark, and was once home
to US secretary of the treasury
Andrew Mellon.
But this campaign is about much
more than bricks and mortar. Our new
headquarters will provide a cutting-edge
communications and media facility, a
modern events space, and classrooms
to train the next generation of free enter-
prise leaders.
We are creating a number of
research chairs and programs and
funding new outreach efforts that will
take advantage of the capacities in
our new building.
AEI has made tremendous strides
in recent years thanks to our community
of scholars and investors. We are sett-
ing the bar even higher for the years
aheadtogether we will write the
next century of the free enterprise
story.
We are enormously grateful for
the steadfast support of our donors.
This campaign, and more importantly,
AEI, would not exist without the trust that
they place in us each day as we fight
for our shared values.
For more information on AEIs Campaign
for Free Enterprise and American
Progress, please contact Jason Bertsch,
vice president of development,
(jbertsch@aei.org; 202.862.5873)
or visit campaign.aei.org.
3
AEIs $100 Million Capital Campaign
New Building Will Extend Reach and Impact
AEI has raised $70 million
toward the campaign
goal of $100 million.
AEI wishes to thank the following
donors who have agreed to be
publicly recognized for their gifts:
THE ANSCHUTZ FOUNDATION
LAUREL AND CLIFF ASNESS
BNSF RAILWAY COMPANY
ESTER AND ARTHUR BROOKS
ROBERT CASTELLINI
PETE AND MARILYN COORS
HARLAN AND KATHY CROW
BETH AND RAVENEL CURRY
DANIEL A. DANIELLO
DOUG AND MARIA DEVOS
FRANK AND SALLY HANNA
JENNIFER AND MARC LIPSCHULTZ
ROBERT H. MALOTT
DANIEL AND KATHLEEN
MEZZALINGUA
JOE RICKETTS
GEORGE R. ROBERTS
CHARLES RYAN
STATE FARM
BARBARA AND BILL TAYLOR
E. L. WIEGAND FOUNDATION
4
AEIs Program on Human Flourishing
Why Free Enterprise Gives the Most People the Greatest
Opportunity to Better Their Lives
His Holiness the Dalai Lama at AEI
The free enterprise system is the greatest anti-poverty program in human history. It is also the system that puts Americans in the
best position to build flourishing families, communities, careers, and spiritual livesthat is, to pursue happiness. AEI scholars are
pursuing ideas and policies that will unlock the benefits of free enterprise for more people, especially the poor and vulnerable,
through our new Program on Human Flourishing.
A partnership between AEI and the Mind & Life Institute (an organization that
began as an intellectual experiment between the Dalai Lama, entrepreneurs, and
neuroscientists) brought His Holiness to AEI headquarters for a summit on free
enterprise and human flourishing on February 1920. The event drew internation-
al attention, with Radio Free Asia providing simultaneous translation in Tibetan
and Mandarin and headline coverage in Vanity Fair, the New York Times, the
Washington Post, the Wall Street Journal, the Huffington Post, Yahoo! News, and
numerous other outlets.
Strictly speaking, I am leftist. But
rightists are also human beings.
AEIs main purpose is to build a
happy society, so therefore I
accepted their invitation. In the
past, I thought capitalists only
take moneythen exploitation.
Now, I have developed more
respect for capitalism.
We are selfish. Its important for
our survival. But because things
are interdependent, its in your
own interest to take care of others.
It should be wise selfish, not fool-
ish selfish. If you take care of oth-
ers, you get more benefit.
His Holiness the Dalai Lama
His Holiness the Dalai Lama and Arthur Brooks
His Holiness shares lunch with AEI vice
chairman Daniel DAniello and AEI board
chairman Tully Friedman.
Jonathan Haidt (NYU business ethicist), Daniel Loeb
(founder, Third Point LLC), and Glenn Hubbard (not
pictured, dean of Columbia Business School) join the
panel discussion of the morality of free enterprise.
5

New Morgridge Fellow in Poverty Studies leads
AEIs Economic Opportunity Research
As New York Citys human resources commissioner under
Mayor Michael Bloomberg, Robert Doar oversaw the
largest social services agency in the country and helped
more than 500,000 New Yorkers transition to work and
begin to earn their own success. Robert brings this experi-
ence to his work building a policy consensus on how to
help the poor and vulnerable move up the socioeconomic ladder. A Wall Street
Journal op-ed he wrote recently explained how charities and shelters that focus
on transformation, relief, and opportunity for the homeless are more successful
than those that provide only material relief and ignore the other two pillars of
human flourishing.
Joining Robert in expanding AEIs work on poverty research
is Kevin Corinth, a new AEI fellow who finishes his PhD
at the University of Chicago this summer. He uses survey
data to compare the effectiveness of homeless shelters and
other sources of basic material relief for the poor. At AEI,
he will help policymakers ask what the most vulnerable
Americans really need and how current government policies could do more to
actually improve their lives.
AEI Scholars Latest Efforts: Strengthening Opportunity
for Vulnerable Americans
Aparna Mathur, AEI resident scholar, has studied wages
and income taxation for more than a decade. In recent
testimony before the US Congress Joint Economic Commit-
tee, she explained why she has turned her attention to an
opportunity agenda for the very poorest Americans: What
is often lost in this back and forth [over income inequality] is
the focus on the poor, because a change in income distribution says little about
how people are faring in absolute terms at the bottom.
Charles Murray is working on a new book, By the People,
on the health of community ties in the United States. While
Murray concedes that the American landscape may no
longer resemble the system our founders envisioned, he is
optimistic about trends in community life over the last 30
years that point to a reincarnation of some of Americas
most dynamic qualitiesones that lay dormant during the New Deal era.
Look for By the People early next year, and Murrays latest, The Curmudgeons
Guide to Getting Ahead, in bookstores now.
Bill Gates Comes to AEI
When people say we should
raise the minimum wageI know
some economists disagreebut
I worry about what that does
to job creationintentionally
dampening demand in the part
of the labor spectrum that Im
most worried about.
Bill Gates
Bill Gates joined Arthur Brooks for a
conversation titled From Poverty to
Prosperity at AEI headquarters on
March 13. Their conversation touched
on a range of topics, including how
the Bill & Melinda Gates Foundation is
bringing material relief to Africas poor
by leading disease prevention and
public health campaigns and working
to open up free markets for farmers
on that continent. Gates then talked
about the foundations emphasis on
domestic education reform, and its
efforts to unlock greater opportunity
for thousands of young Americans.
Much greater opportunity for working
Americans, Gates noted, is also within
reach, as long as we enact the right
economic policies. After hearing
Gatess thoughts on domestic and
international economics, the audience
might have been forgiven for mistaking
him for an AEI scholar.
6
Ambitious, intellectually curious college
students are often disillusioned by the
political scene they find when they get
to campus. They can join the entrenched
left-leaning intellectual and social main-
stream or the isolated conservative
minority, but rarely do the two sides
engage each other.
AEI now gives students a third
option: join a community of scholars,
policy leaders, and entrepreneurs whose
positive messagethat free enterprise
unlocks the most opportunity for all
Americans, especially the pooris
reshaping the right and attracting
some very nontraditional allies.
AEI Executive Councilsgroups of
four to five handpicked student leaders
with the greatest potential for impact
launched on 25 select campuses last
fall. Executive councils direct AEI pro-
grams on their campuses and gather
in Washington, DC, for leadership
conferences throughout the year.
These teams of student government
presidents, campus newspaper editors,
and Ivy League quarterbacks are
charged with bringing student leaders
of every stripe into the debate. Execu-
tive councils develop a wide network
of influential students who see AEI
as the home of reasoned discourse
on campus.
At Boston College, AEIs Executive
Council hosts Coffee & Conversation
each month for a rotating cast of stand-
out students and professors. The council
includes BCs student government presi-
dent and other campus leaders capable
of drawing these peers into serious
public policy discussions.
The five members of the University
of Texas Executive Council each meet for
lunch with 10 other campus leaders
throughout the year, building a strategic
set of campus allies. One council mem-
ber has interned in the office of
Republican governor Rick Perry and
another in the Obama White
House, so their network spans
the political spectrum. The
students have brought five
AEI scholars to UT since the
fall, hosting events with campus
groups from the right and left
and with the Universitys
Clements Center for History,
Strategy, and Statecraft.
The University of Southern
California Executive Council introduced
AEIs policy work to a completely new
audience by cohosting a recent event on
the US response to Putin with the Russian
Culture Club. In a high-profile campus
appearance, AEI director of Russian
Studies Leon Aron talked via Skype to
a packed lecture hall about the stakes
involved in the Sochi Winter Olympics.
AEIs Campus Programs team later
organized a virtual town hall on
the Ukrainian crisis in response to
student demand at a number of schools
across the country, and many executive
councils have taken the opportunity to
connect with Russian and Slavic student
clubs that are especially interested in
US foreign policy.
Already this spring, AEI has
launched 10 new executive councils,
and we are on target to be on
50 campuses by the end of the school
year. Slowly but surely, these student
leaders are raising the tone of political
conversation on campus and engaging
their peers in a battle of ideas that
AEI has equipped them to win.














AEI on Campus Doubling Number of
Executive Councils
The Dalai Lama with students from AEIs Executive Councils.
7
Growing up, did you want to
study the Middle East?
Ive been fascinated with the region
since high school and even tried to
learn Arabic as an independent
study, but was foiled. I went to college
knowing that I wanted to end up
working on the region.
When I came to AEI as an intern,
the Critical Threats Project (CTP) was
just beginning. I had never studied ter-
rorism and knew very little about some
of the most volatile countries, but I
learned on the job and enjoyed the
analytical work. Part of what we do is
put together bits and pieces of a puzzle
gleaned from open sources and then try
to describe what its showing.
AEI didnt have a campus program
when you were in college. What
are some of the opportunities
now offered that you would have
benefited from?
Ive enjoyed working with AEI on
Campus and recently returned to my
alma mater, Yale, to talk to students
there. AEI attracts very bright young
minds, and one of the most rewarding
experiences Ive had has been working
with my interns and developing them
into junior analysts. When I was a stu-
dent, I wish I had had the perspective
of someone 5 or 10 years older who
could provide advice on how to break
into the DC job market.
You went from AEI intern to senior
analyst with a rising profile in the
defense and intelligence community.
How has the environment at AEI
guided your development?
I have benefited from great advice and
fantastic mentors at AEI, starting with my
now-former colleague who offered me
an internship and including Frederick
Kagan, director of CTP; Danielle Pletka,
vice president of Foreign and Defense
Policy Studies; and Veronique Rodman,
director of public affairs.
What advice would you give a
college student who is thinking
about a career as a scholar?
Spend some time in the professional
world before pursuing an advanced
Katherine Zimmerman
Making Her Mark on
the Policy Community






degree, so that you have an understand-
ing of how you will use it.
Whats the biggest misconception
policymakers and the public have
about al Qaeda? What have you
learned from your research that
surprised you?
I have to explain the definition of al
Qaeda all the time. Its a game of
semantics, but its an important one.
The administration uses al Qaeda
to name the group now led by al
Zawahiri in Pakistan, and very rarely
do officials talk about the broader
al Qaeda network. So while we
have dedicated enormous attention
to al Qaeda in Pakistan, we are only
fighting a fraction of the network.
In fact, al Qaedas primary threat to
Americans appears to come from
its group in Yemen, which has targeted
our homeland at least three times in the
past five years.
Wheres al Qaeda headed in the
next 5 years? 10?
I will not predict the future of al Qaeda,
but over the past few years, conditions
have tilted considerably in its favor.
New governments swept in by the
Arab Spring have their hands full,
and fighting al Qaedas growth may
not be their first priority.
To read Katherines work, visit her
scholar page at www.aei.org/scholar
/katherine-zimmerman and visit
www.criticalthreats.org.
AEI Critical Threats Project senior analyst Katherine Zimmerman is drawing attention
for her work on al Qaeda. Since graduating from Yale University in 2009 and coming
to AEI, she has testified before Congress on al Qaedas global expansion, written for
the Washington Post and Wall Street Journal op-ed pages (editors praised her piece as
a service to Journal readers and to Americans generally), appeared on national
news programs, and corresponded with top generals about the al Qaeda threat.
The American Enterprise Institute is a community of scholars and supporters
committed to expanding liberty, increasing individual opportunity, and
strengthening free enterprise. AEIs work is made possible only by the financial
backing of those who share our values and support our aims.
To learn more about AEIs scholars and their work, visit
www.aei.org | www.american.com | www.aei-ideas.org
To find out how you can invest in our scholars work, visit
www.aei.org/support
1150 Seventeenth Street, NW
Washington DC 20036
202.862.5800 | www.aei.org
8

www.aei.org/rss
www.facebook.com/AEIonline
@AEI
www.youtube.com/AEIVideos
The United States,
prompted by interna-
tional backlash over
revelations of National
Security Agency spy-
ing, recently
announced that it will give up the last of
its roles administering the Internet. The
news prompted a flurry of cybersecurity
questions: who will safeguard users in
The Baupost Groups Seth Klarman Elected to AEI Board of Trustees
helped him earn his own success,
said president Arthur Brooks. We are
grateful for his service since March
2013 as a co-chair of AEIs National
Council, and are honored to have him
alongside us in the fight to expand
freedom, opportunity, and enterprise in
America and around the world.
The author of modern-day value
investing classic Margin of Safety
(1991), Mr. Klarman was chosen as
lead editor for the sixth edition of
Graham and Dodds Security Analysis,
the seminal value investing textbook to
which Warren Buffett and others have
credited their success. Mr. Klarman
has also been featured in a variety
of investment industry publications.
In addition to his leadership
at AEI, Mr. Klarman serves as
cochairman of the board of trustees
of Facing History and Ourselves
and serves on several other nonprofit
boards. He and his wife, Beth, live
in Boston.
AEI is pleased to
announce that
Seth Klarman, presi-
dent and CEO of
The Baupost Group,
has joined the Insti-
tutes Board of Trustees. Mr. Klarman
has had primary responsibility for
managing the investments of Baupost
since the firms founding in 1982.
Seth brings to AEI his tremendous
experience, leadership, and passion
for free enterprisethe system that has
the absence of US Internet governance?
Will the Internet remain borderless, or
will governments begin to censor and
control it within their realms? And how
can businesses, whose cybersecurity
interests often diverge from govern-
ments, contribute effectively to US cyber-
security and national security policy?
New AEI Center for Internet,
Communications, and Technology Policy
visiting fellow Shane Tews brings experi-
ence from the White House, Capitol Hill,
and executive roles at a web hosting
and security giant and a boutique com-
munications firm to her role at AEI.
AEI will produce regular reports on
the issues and plans to bring business
leaders and policymakers together for
working groups on cybersecurity and
Internet governance.
Cybersecurity Expert Shane Tews Joins AEI