when austrian economists attack

A few years ago, the late Sherlock Hibbs gave $5M to his alma mater, the University of Missouri. The intent was for Mizzou to hire six (!) professors and each needed to be a “dedicated and articulate disciple” of Ludwig von Mises. The Columbia Daily Tribune reports that the university got sued by Hillsdale College over this donation. Why? Hillsdale College claims that the terms of the donation were not met and the terms of the donation require that the gift, now valued at $9M would go to Hillsdale if the University of Missouri could not fulfill its terms.

Comment #1: This is a fascinating way to create some enforcement within the non-profit sector. It’s not full proof but in relatively simple donations, third parties would be willing to litigate if the reward was big enough and the enforcer could be written into the contract. Hillsdale is ideologically conservative and a small school so they would have both principled and financial reasons for trying to enforce the original terms.

Comment #2: The Columbia Daily Tribune lists four professors hired on this gift. So right there, you have an issue – they didn’t hire six. But most donors, or their estates, would probably be flexible if good faith efforts were made to complete the grant. And this leads to the heart of the issue. If you look at the CV’s of the professors who were hired, you will see some really excellent articles in top management journals – but zero (!) that mention Mises, Hayek, Austrian economics, or any of the topics favored by Austrians (e.g., socialist calculation, spontaneous order theory, non-equilibrium economics, etc.) Nor do you see many (any?) conference papers, working papers, or talks that might indicate that the professor was indeed an “articulate” follower of Mises. Mizzou’s spokesperson did say that the faculty supported by the gift had all signed a statement claiming that they were totally into Mises.

Comment #3: Why? One answer is simple financial. Maybe Mizzou’s business school simply couldn’t turn down the money and didn’t care about consequences. But I think a deeper issue may be at stake here: the ideological tilt of academia, even in business schools. If a business school would not care to hire free market advocates, or not be able to find them, it says something that is worth thinking about.



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Written by fabiorojas

July 10, 2019 at 12:15 am

Posted in uncategorized

6 Responses

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  1. It tells me that Mizzou’s b-school doesn’t want to lock in a hack on faculty, even if someone else pays for it. Mises is for 1980s economists and nonprofits that stay alive by pandering to rich people.

    Liked by 1 person

    Joseph N. Cohen

    July 10, 2019 at 1:15 pm

  2. Clearly Mizzou put the money where it would be of greatest benefit to the B-School. But given the restrictions on the gift, perhaps, they were a tad disingenuous in accepting it. The litigation should be interesting. Generally the courts look unfavorably on donors reaching beyond the grave (or their heirs). As you note, in this case, however, the donor seems to have come up with a very cute mechanism for making his wishes count.

    Liked by 1 person

    Fred Thompson

    July 11, 2019 at 2:12 am

  3. Why would we expect business school faculty to advocate free markets? Business schools try to understand how to maximize profit and teach students how to do that. Market freedom is anti-profit because new entrants–the hallmark of market freedom–can enter with lower profit margins and drive down prices. This drives profit toward 0. Firms want to sell into unfree markets and buy from free markets, and business schools research and teach how to do that.



    July 12, 2019 at 3:53 pm

  4. tdn: I think your comment contained more Austrianism than the CVs of the people who hold these chairs…

    Liked by 1 person

    Fabio Rojas

    July 12, 2019 at 5:01 pm

  5. I looked through each professor’s cv. How come business school articles sound so boring? Is it just a meat grinder to churn out publications? “Power and Influence in Marketing Channel Research:
    Observations on the State of the Art” – What does that even mean?

    Liked by 1 person

    Richard Pointer

    July 12, 2019 at 7:14 pm

  6. Fabio, I’ll be on the bschool job market in a year, maybe I should apply to Mizzou. Thanks again for Grad Skool Rulz.

    Liked by 1 person


    July 12, 2019 at 8:47 pm

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