Economics Faculty War

The Charles Koch Foundation’s annual giving to higher education has jumped in recent years -- from $12.7 million in 2012 to $44 million in 2015 -- and faculty concerns about the libertarian group’s campus influence have grown proportionately. The site of most recent clash between professors and the foundation is the University of Utah, where Koch has matched a separate $10 million donation to establish the Marriner S. Eccles Institute for Economics and Quantitative Analysis.

Named after the late Utah banker who served as chairman of the Federal Reserve, the institute this summer was granted provisional status in the David Eccles School of Business on campus. The institute’s mission is to “push the frontiers of knowledge through academic research and provide university students access to education in economics, game theory and econometric analysis," according to its agreement with Koch. Funding will support the hiring of seven faculty economists, research and $1.6 million in student scholarships.

A major curricular focus of the institute will be developing students’ quantitative skills. Trouble is, Utah already has separate economics and finance departments that do just that. And while key finance professors are on board with the new center, others -- including those in economics -- are not.

Some 18 professors from the economics department, along with 176 others on campus (mostly faculty members), signed a statement of concern about the institute submitted to the Academic Senate’s Executive Committee this summer. And on Monday the Senate approved a resolution charging a recently established faculty committee with the additional task of reviewing policies and procedures for approving institutes and centers.

The “funding agreement between the Charles Koch Foundation and the University of Utah raises serious concerns about the principles and practice of intellectual independence and academic freedom," reads the faculty letter drafted by Mark Button, chair of political science. “Given the limited amount of time that faculty, students and academic leaders at the university were given to consider this provisional new institute, we urge the university to incorporate meaningful forms of independent and diverse faculty governance," especially with regard to faculty appointments and the distribution of scholarships and fellowships.

The letter, which also recommends “vigilant, independent oversight by senior university leadership to ensure the preservation of intellectual independence and academic freedom for everyone affiliated with this institute,” lists a number of qualms with Koch generally and the institute specifically. Among them is that the center “constitutes a threat to the long-term viability” of the existing “pluralistic and dynamic economics department” housed within the College of Social and Behavioral Science. That department, the letter says, provides students “with an important opportunity to approach economic thinking and analysis within the wider context of national and international history and in reference to the complex factors shaping human behavior.” Moreover, “its research and teaching activities incorporate investigations of the evolution of economic thought, the comparison and critical analysis of a variety of theoretical approaches and the generation of applied, policy-relevant research that is informed by this broader inquiry.”

Button’s letter encourages the university to create safeguards against the institute and the department becoming curricular “rivals.” But beyond a disciplinary turf war, the letter implies that there are moral and historical imperatives to grounding economics in the social sciences.

Economics: Social Science or Business?

Politics are at play, too. The day after the university announced the new institute, in July, the local Deseret News published an opinion piece calling it “a win for the state.”

Citing two now-retired professors by name, the editorial says that for the better part of a century, “Castro’s Cuba and the University of Utah’s economics department seemed like the last bastions of Marxist thought in North America -- with the latter being subsidized by local tax dollars.” Now, “local students will be exposed to a more academically vibrant suite of economic ideas.”

The Deseret News take prompted an rebuttal op-ed by Cynthia Berg, dean of the College of Social and Behavioral Science, and Norman J. Waitzman, chair of economics. While they agree with “breadth and diversity in economics training and research,” they wrote, “We nonetheless find it quite regrettable that the editorial mischaracterized [the department] in terms of a narrow philosophical bent. Citing the work of two professors who are collectively over two decades into their retirement, the editorial maintains that the department bears an associated Marxian ideological bias.”

Rather, Berg and Waitzman said, “The hallmark of the department is its commitment to competing perspectives and their evolution (i.e., a pluralistic perspective) and as such exposes students to a range of theoretical perspectives, including Marx. Such commitment to broad theoretical exposure has become all too rare in the discipline.”

Nearly the entire economics profession, they add, “was caught flat-footed in the wake of the economic catastrophe of the Great Recession. Devoted to ever more elegantly quantified, but unrealistic, models of unfettered market activity, the profession progressively deviated from the path-breaking insights of John Maynard Keynes, who established the theoretical framework for understanding and navigating the economy in the wake of the Great Depression. Much of the great legacy of Marriner S. Eccles is lodged in his masterful deployment of Keynesian tools in his service at the helm of [President Franklin D. Roosevelt’s] Federal Reserve Board.”

In an interview Wednesday, Waitzman said that the department is far from Marxist but proud, nevertheless, of its curricular diversity. Moreover, he said, the department is large, thriving and already teaching the game theory and econometrics the institute says it will promote.

“This is a very powerful institute backed by millions of dollars, so the issue is existential for us,” he said.

Berg, the dean, also has publicly expressed concern about a duplication of curricular efforts and the short timeline in which the institute was approved.

There exist equally important concerns about how the university deals with donations like the one in question going forward, Waitzman said. Private donors are playing a bigger role on campuses across the country, and policies and procedures about chains of approval and academic freedom must be established.

Scholars on a number of Koch-funded campuses say they worry that agreements come with “strings attached.” They often cite, for example, a 2008 agreement between Koch and Florida State University that included an advisory board’s approval of faculty appointments.

Utah has made its donor agreements about the new center public, and there is no such clause. Taylor Randall, dean of Utah’s business school and a proponent of the new institute, said the proposal was faculty-led and academic freedom was the foundation for the donor agreements. Curricular changes and faculty hires will happen according to existing university policies, for example.

Questions About Academic Freedom

“This was developed with the faculty based on a shared vision of what they want to do,” Randall said. “It’s about first assisting students with a new major, second, hiring faculty, and third, sponsoring research.”

The eight-year agreement will be paid out in installments and is subject to annual donor review -- something critics say fundamentally compromises academic freedom, since the specter of purse strings tightening is always there. That's why the University of Kentucky's University Senate voted in 2016 to reject the terms of an agreement between Koch and John Schnatter, of John's Pizza fame, to establish a $10 million center for the study of free enterprise (the center was established anyway). But Randall said the Utah took that into account in negotiating the deal, and that it could withstand the financial risk of it ending.

Randall also downplayed concerns from the economics department, saying it had approved that new joint major with the finance department -- one in quantitative analysis of markets and organizations. Waitzman disputed that characterization, though, saying economics accepted the new major only as an alternative to a proposed business economics major that would have overlapped even more heavily with its offerings.

As to what the new institute will offer that economics can’t, Randall said he guessed the center would focus on research once the new major was up and running. And while economics faculty tend to focus on globalization, sustainability and inequality, he said, the institute will center its research on “business-oriented economics."

John Hardin, director of university relations at Koch, said that the Florida State agreement was faculty-driven and eventually rewritten. Asked about existing agreements that do link continued funding to a single faculty member or administrator -- such as the much criticized agreement between Koch and the Antonin Scalia Law School at George Mason University -- Hardin said it’s no different than the National Institutes of Health linking a grant to a principal investigator. It doesn’t mean that funding will cease if the person leaves, he said, only that Koch wants to know.

“We support scholars and professors and students, not institutions -- it’s not a conspiratorial thing,” he said. “I’d encourage anyone who wants to know what it's really like to talk to scholars on the ground. We are very supportive of providing funding to support their interests.”

Also contrary to what critics may think, Hardin said, Koch doesn’t approach scholars. Rather, professors and students approach it with proposals. Koch favors projects that promote what it calls “human flourishing” and ideas that “challenge the status quo,” but beyond free-market economics, Hardin said, Koch also funds research on topics including the criminal justice system, technology and free speech.

“In many ways this is a unique privilege to meet these students and scholars and hear their stories,” he said.

While Utah’s Academic Senate approved the new committee’s additional duty, it tabled other proposals to ensure the institute was not encroaching on existing academic programs and to charge a committee with reviewing academic freedom within all provisional centers annually. 

Button, the author of the faculty letter, plans to ask the senate at its October meeting to “learn from the experiences of others and do everything we can to safeguard our institution’s long-term interests and core values,” according to prepared remarks he shared with Inside Higher Ed.