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Wednesday, 13 January 2016 17:06

Proposed Koch gift to WCU a bad idea

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WCUBy Mark Jamison • Guest Columnist

The proposed $2 million gift from the Charles Koch Foundation to Western Carolina University to establish a Center of Free Enterprise raises several questions.

• Are gifts like these from private donors appropriate at public institutions? 

• Do they entail a quid pro quo regardless of protocols to ensure transparency? 

• Are gifts within certain academic disciplines different in their impact on the mission and perception of the university? 

In an era when we have seen the highest concentrations of wealth in more than a hundred years and when there exists a growing concern about the impact of money on the accountability and accessibility of political institutions, do these sorts of gifts further a trend away from democratic institutions and public goods? Is this trend healthy?

In 1971 Lewis Powell — a corporate lawyer, member of 11 corporate boards, and future Supreme Court Justice — wrote a memo to the director of the U.S. Chamber of Commerce. The memo was essentially a diatribe against American liberalism, a call for action from American corporate and business interests. It recommended a concerted effort to develop an intellectual infrastructure that would support the interests of American corporatism.

The Powell memo has often been credited as the birthing document of the web of think tanks, associations, and groups that advance conservative thought in this country.  Another consequence of the memo was a renewed focus on capturing government and making it work directly for the interests of corporate elites. 

Over the last generation we have seen the effects of Powell’s advice in action, especially as economic gains have concentrated in the upper .01 percent, creating a class of billionaires able to buy an outsized voice and presence in politics and policy making.

The ubiquity of private think tanks and foundations assures that there is more than sufficient opportunity for the dissemination of political and ideological opinion. Here in North Carolina we suffer no lack of presence with Art Pope’s John Locke Society and Civitas. 

Why then is it necessary to extend the reach of these essentially political organizations into the publicly funded university system? Even if one concedes that accepting donations from wealthy benefactors can be beneficial to a publicly funded university, does a difference arise with respect to what the benefactor chooses to fund? Leaving the question of agenda setting aside, it seems a fundamental distinction exists between funding a Center for Bio-research and funding a Center for Free Enterprise. One is largely a pursuit of empirically constrained hard science while the other is a study and promotion of ideology. This becomes particularly evident when looking at the specialty of the proposed CFE director, WCU Professor Edward J. Lopez. Dr. Lopez focuses on a branch of economics that comes under the rubric of “Public Choice Theory.”

In his book, Madman, Intellectuals, and Academic Scribblers, Lopez says, “The basic idea of public choice theory is that economists shouldn’t have one set of theories for a person making a commercial decision and a separate set of theories for that same person making a political decision. Economists working in the public choice tradition argue that if we’re going to look at market failure, then it makes sense to see if there is government failure, too. With this perspective in mind, it becomes clear why democracies so often generate inefficient policies and why they allow them to persist.”

The implication is that all the world, every facet of human experience, is not a stage — as Shakespeare wrote — but a market where rational beings make rational choices based solely on profit and loss, maximization of utility.

This is more than merely economics. It encompasses the whole of social sciences as evidenced by a quote Dr. Lopez uses in a book of essays he edited, The Pursuit of Justice. Dr. Lopez quotes James Buchanan, one of the founders of the PCT school, as saying, “Public choice should be understood as a research program rather than a discipline or subdiscipline of economics.” Dr. Lopez makes it clear throughout his writings that PCT is “intertwined with philosophy, history, finance, psychology, development, linguistics, and other fields”; an all encompassing theory of everything — a dogma.

The commentator Matt Yglesias has suggested that PCT fits a syllogism (a logical argument that offers two or more propositions and a conclusion):

• Proposition 1: Spread skepticism about government officials and their motives.

• Proposition 2: ?

• Conclusion: Libertarianism!

And in fact that may be a good description of much of Dr. Lopez’s work. The first proposition does the heavy lifting by creating an all encompassing cynicism followed by an empty assertion implying no further argument is needed because the conclusion — Libertarianism — is somehow self-evident. Consider the question Dr. Lopez poses in his book, Madmen, Intellectuals, and Academic Scribblers: “Why do democracies generate policies that are wasteful and unjust?”

The question doesn’t ask “Do democracies generate policies that are wasteful and unjust?” It assumes they do, which is true in some instances but the framing isn’t about discovering under what circumstances wasteful policies occur, there are no definitions of wasteful, and despite constant references to just or unjust actions, Dr. Lopez never gives much of a definition beyond a nebulous reference to “rules” and “property rights.” 

For example, Dr. Lopez writes approvingly in a couple of different papers of President Grover Cleveland’s 1887 veto of a disaster relief bill for Texas farmers wiped out by drought. Such aid was not, in Cleveland’s and apparently Lopez’s view, constitutional. Presumably, the implication still holds true.

There isn’t a great deal of intellectual inquiry here. There is an assumption that we are all homo econimicus, that institutions are subject to the same incentives and rent seeking behavior that individuals always exhibit, and that the answer must therefore be a laissez faire version of society as encompassed entirely by the market.

Throughout his writings, Dr. Lopez is adept at telling “just so” stories leading us in the direction of his conclusions. For example, in his recent letter to The Smoky Mountain News that began with a rebuttal to a previous writer’s assertions about BB&T’s actions during the financial collapse, Dr. Lopez references BB&T’s repeated claims that they were forced to take TARP money, a claim that may have some truth but which also ignores the fact that BB&T was also found to be significantly undercapitalized and overleveraged.

Lopez is much taken with Adam Smith’s metaphor of the invisible hand, one of the most overused, abused and misunderstood phrases in the annals of economics. Lopez uses the phrase 11 times in his book while Smith used it three times in his entire body of work; once in a treatise on astronomy; once in A Theory of Moral Sentiments in the context of similar needs of both rich and poor for basic necessities ; and once in The Wealth of Nations in the context of comparing domestic and foreign manufacturers. From those three examples and particularly the last, a mythology of a self-generating and correcting marketplace has evolved to the level of religious or iconic status.

Oddly enough, Lopez doesn’t quote Smith during his many discussions of the problems of working folks and the disadvantages that labor faces. For example, it’s unlikely that Lopez would cite Smith’s take on progressive taxation: “The rich should contribute to the public expense, not only in proportion to their revenue, but something more in proportion.” 

Dr. Lopez also is adept at portraying his intellectual heroes in a positive light while subtlety poking those he disagrees with. In one passage he says about John Maynard Keynes, “He even took both sides in love, not terribly unusual among intellectuals of his circles in that day. As a young scholar Keynes had male lovers, including the writer and critic Lytton Strachey. But, like Pareto, he later married a Russian woman, the ballerina Lydia Lopokova.”

I’m not sure what Dr. Lopez hoped to accomplish with this observation, but for the life of me I can’t understand what Keynes’s sexual preferences or Russian wife tell us about his economic thinking.

Perhaps Dr. Lopez was trying to make a point that Keynes often changed and adapted his positions, a point that would have been served by offering up this well-known quote from Keynes, “When the facts change, I change my mind. What do you do sir?”

 Dr. Lopez has said that academic inquiry should not be censored even if unpopular. I heartily agree with him: his teaching should not be censored or limited. But I would also suggest that each instructor, particularly in a public institution, has an obligation to present material in the spirit of intellectual honesty and inquiry and that would include presenting a fair assessment of ideologies or systems that conflict with an instructor’s preferred ideologies or systems. In his book, Madmen, Intellectuals, and Academic Scribblers, Lopez’s main theme is that ideas should win out in the marketplace. While the marketplace is only a small part of the world and human experience, his basic construction is correct — good ideas, ideas subjected to empirical, logical, and philosophical testing, ideas that advance, expand, or illuminate our concepts of justice, ideas that have been broadly and fairly debated and contested ought to win our respect.

But the question here is more than what Dr. Lopez teaches or how he teaches it. At issue is not the legitimacy of one professor’s views. The issue is whether a publicly funded institution ought to take a gift to establish a program with the clear mission to teach a particular ideology, an ideology that is broadly contested. This is especially true in a discipline like economics and especially when the proposed center and its leader mix economics, political philosophy, and political science. Maybe the discussion ends up being framed differently if we were talking about a hard science, or medical research, or a purely technical discipline. Even then there might still be questions about billionaires dictating an agenda, but in a discipline that is entirely empirical there are fewer and different problems. The search for facts and the search for truth are two different endeavors; that distinction is both critical and germane to this specific proposal.

Transparency is not the issue; no matter how unstructured the grant, the undeniable fact is that $2 million buys influence, it gets preferences on the agenda. Ironically, one of the basic tenets of the ideology Dr. Lopez preaches is that money talks, it is the measure of the market. More to the point, the ideology that Dr. Lopez espouses argues that public institutions are subject to manipulation and perverse incentives. The proposed grant is a demonstration of whatever truth lies in public choice theory.

The land grant colleges and public university systems were built to serve as great equalizers. These public institutions were built to give average folks the opportunity to acquire knowledge and pursue intellectual inquiry. Sadly, as our world has graduated from a market economy to a market society, much of the mission of our public institutions has been lost. In a world where billionaires and corporate sponsors face few constraints in their ability to dictate public policy and control public discourse, we ought not blithely encourage yet another venue for indoctrination, no matter how much the enticement. I would make this argument regardless of the source of the money, whether it comes from the Kochs or George Soros.

Let Dr. Lopez teach what he wants, but let WCU retain its integrity as a public institution, something it cannot do if it accepts this gift.

(Mark Jamison is retired postmaster of Webster.) 

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