Saturday, May 5, 2018

The Attack on Koch Brothers' Donations to George Mason University

Koch brothers under attack
A group of George Mason University students has launched an attack, questioning the funding by the Koch brothers of GMU and affiliated organizations.

The New York Times reports:
The group, Transparent GMU, had sued the university and its fund-raising foundation last year after it was denied requests for documents that it suspected showed how deep-pocket donors were given undue influence over academic affairs. After a recent court hearing in the case, the university released those documents, some of which appeared to affirm the group’s suspicions....
The documents reveal in surprising detail that for years, as George Mason grew from a little-known commuter school to a major public university and a center of libertarian scholarship, millions of dollars in donations from conservative-leaning donors like the Charles Koch Foundation had come with strings attached. 
As early as 1990, entities controlled by the billionaire brothers Charles G. and David H. Koch were given a seat on a committee to pick candidates for a professorship that they funded, the records show. Similar arrangements that continued through 2009 gave donors decision-making roles in selecting candidates for key economics appointments at the Mercatus Center, a Koch-funded think tank on campus that studies markets and regulation. The appointments, which also created faculty lines at George Mason, were steered to professors who, like the Kochs, embraced unconstrained free markets.
Of course, in my book, a donor should be able to set any conditions he chooses for a donation and then it is up to the educational institution to accept the terms of the donation or not.

That said, this entire brouhaha seems to highlight a Charles Koch problem with organizational structuring.

It brings to mind the 2012 Koch battle against Ed Crane over control of the Cato Institute.

I wrote at the time:
 The super-rich are always on guard. Thus, it is simply bizarre that the Kochs used a part of their fortune to set up an institute where they have to battle for control. Dumb. Mega-dumb. Maybe they needed outside shareholders for tax purposes, but in that case you make your lawyer, or your bumbling aide who holds doors open for you, shareholders. You don't put the principled Murray Rothbard on the board or the Machiavellian Ed Crane on the board. For completely different reasons, these guys are not going to roll over and play fetch with a couple of billionaires. You make them officers and throw them some bucks that don't mean anything to you, but why the hell would you make them shareholders? 
Now, we see an organizational structure problem emerge once again.

A key take away from the NYT article is that the school was a  "little-known commuter school" before the Koch brothers got involved and donated millions. But the question has to be asked: Why would the brothers build up a public, that is a government public school, instead of a private school?

If the brothers had built up a private school, they could have told a "transparent" group to go to hell.

Anyway, Don Boudreaux has responded to the claim that the Koch brothers have had undue influence over faculty choices, here.  And Tyler Cowen has done so here.

By the way, the Koch brothers have such a gigantic money donation machine that it is doubtful they know much detail about what their donations support. They are not micro-managing.

Since I generally come from the Rothbardian wing of libertarianism, the Koch brothers are not going to go out of their way to finance me and yet it was their money that was behind a recent speech I delivered.

-Robert Wenzel  

1 comment:

  1. Don Boudreaux is one of the most insightful Austrian economists in the blogosphere, so I guess at least in this respect I'm indebted to the Kochs if they had any hand in supporting or furthering Don's platform.