CUNY trustee Jeffrey S. Wiesenfeld’s embarrassing display of censoriousness, compounded by the board’s equally embarrassing willingness to drop Tony Kushner from its honorable degree list when Wiesenfeld denounced a straw version of Kushner’s politics and set it aflame, cast a sudden and unusual light upon the role of trustees. Now comes more news of extracurricular intervention in the world of higher learning. This time what’s at issue is the buying of an economics department.
Kris Hundley of The St. Petersburg Times (that’s Florida, not Russia) reports:
A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5-million for positions in Florida State University’s economics department. In return, his representatives get to screen and sign off on any hires for a new program promoting “political economy and free enterprise.”
Under the agreement with the Charles G. Koch Charitable Foundation … faculty only retain the illusion of control. The contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it’s not happy with the faculty’s choice or if the hires don’t meet “objectives” set by Koch during annual evaluations.
Hundley also noted that, apart from the Koch grant to FSU, the BB&T bank holding company “funds a course on ethics and economics in which Ayn Rand’s Atlas Shrugged is required reading.”
Now, in all the hue and cry about the academy’s political tilts, we hear a good deal more about departments of Comp Lit and women’s studies than about economics, though arguably economics departments are a good deal more consequential. There are, after all, many living economists—not only the “long dead” ones which John Maynard Keynes said held practical men in their thrall—who contributed to the years-long financial myopia and the consequent human wreckage.
When conservatives regrouped after the 1960s, they were more concerned about rectifying economics than any other discipline. And for obvious reasons: They wanted the academy to turn out reliable defenders of what they quaintly called, and continue to call, free enterprise. Economics departments, along with business schools, fueled the deregulatory fevers that have gripped Washington ever since.
In the eyes of the academy, even the implosion of the financial system has not been grim enough testimony of where deregulation can lead. The last time I looked, activists were not holding teach-ins on the merits of the conventional wisdom, nor were the departments themselves deeply and publicly engaged promoting, say, Truth and Reconciliation Commissions on how the profession as a whole whitewashed Wall Street, promoted the metastasis of derivatives through the global banking system, and failed to detect that the housing bubble was a bubble.
On my own campus, incidentally, business school dean Glenn Hubbard, George W. Bush’s former chief economic advisor, and professor of finance and economics (and former Federal Reserve board governor) Frederic S. Mishkin, are revealed in Charles Ferguson’s superb documentary Inside Job to have been paid super-handsomely to whitewash various players in the financial industry. (Here is Mishkin’s rejoinder to Ferguson and here is Ferguson’s back to Mishkin. I encourage readers to read both sides and ask themselves whether Mishkin’s insight into the fragility of the Icelandic banking system was as penetrating as he now maintains.)
But back to Florida State. As financially strapped states continue to cut back on aid to higher education, state universities will increasingly turn to private funds to make up the difference. Enter nonprofit foundations with stakes in the outcome. The universities will be grateful for the help, especially when there’s a convergence of belief between the academics in charge and the donors. Such is said to be the case by the chairman of FSU’s economics department, Bruce Benson, who told Kris Hundley:
The Kochs find, as I do, that a lot of regulation is actually detrimental and they’re convinced markets work relatively well when left alone. … I agree with what they believe, whether they give us money or not.
Professor Benson seems to carry his market-mindedness a long way when he says, ”Students will ultimately choose.” They may not, however, as they listen to paeans of praise for free enterprise, be aware that Charles G. Koch and his brother David have received almost a hundred million dollars in government contracts since 2000, or that they have a multi-billion dollar stake in keeping taxes low.
Even as FSU President Eric J. Barron pushed back with a denial that faculty prerogatives were violated, David Rasmussen, dean of FSU’s College of Social Science, acknowledged that “the university nominated two eminent scholars who were accepted by the Koch Foundation. ‘They agreed, so you could say they had influence,’ Rasmussen said.”