Koch Money and the Unflappable Economist

By Philip E. Mirowski, Carl Koch Chair of Economics and the History and Philosophy of Science, University of Notre Dame. Originally published at the

t the beginning of May 2018, there was a brief furor over donations from Koch family-affiliated philanthropies to fund the Mercatus Institute and the newly-named Antonin Scalia School of Law at George Mason University (GMU). Although articles concerning the admirable efforts of the GMU student organization UnKoch My Campusappeared in many of the prominent news outlets, the attention span of journalists seemed to barely outpace that of interest in one of Donald Trump’s tweets, with even less consequence. But more to the point, the silence of the economics profession concerning the revelations was pretty deafening. Briefly, I would like to revisit why this was so and why it matters.

The details of the controversy can be briefly summarized: the assortment of Koch family foundations and allied charitable cutouts (which some libertarians have dubbed the “Kochtopus,” but will henceforth here be shortened to ‘the Kochs’) have been making targeted donations to more than 300 schools since 2005, predominantly to economics departments. But George Mason University has been the most lavishly favored, garnering more than a third of the estimated $150 million bequeathed to universities from 2005-2015. The event that stirred campus resistance at GMU was a massive donation of $10 million from the Kochs tied to a $20 million donation from an anonymous benefactor to rename the Law School after Antonin Scalia, “formally” earmarked for “student scholarships.” The first thing one notices was the budgetary legerdemain which obscured the relationship between faculty selection and line items in budgetary terms. Thus, the GMU Provost S. David Wu could tell his Faculty Senate in April 2016 that the bequest came with “no strings attached…The entire $30M is for scholarships for students and nothing else.” This narrative might have prevailed, if not for the document dump by UnKoch My Campusat the end of April,a result of a FOIA suit by Transparency GMU, which detailed the series of negotiations with the Kochs (including the overwhelming role of figures from the Federalist Society as intermediaries: another Koch funded arm), including stipulations of how designated representatives would have input into GMU hiring decisions. This forced GMU President Angel Cabrera to reverse earlier statements that existing donor arrangements had not been allowed to influence internal academic matters. This, in turn, was the trigger which attracted the national press. As Inside Higher Edput it: “academic values have long held that donors don’t get to pick who holds chairs, or evaluate them.”

“It’s now abundantly clear that the administration of Mason, in partnership with the Mercatus Center and private donors, violated principles of academic freedom, academic control and ceded faculty governance to private donors,” said Bethany Letiecq, President of GMU’s chapter of the AAUP. But this reaction might underestimate the scope of the problem, reducing it to a mere matter of moral integrity. I shall argue instead that this event has more structural underpinnings, touching upon the very conception of education in relation to markets, and involve some crucial aspects of economic theory.

Broadly speaking, economists greeted this controversy with a big yawn: this sort of thing happens all the time, so don’t get your panties in a twist. Indeed, the Kochs have been making similar grants to many universities for more than a decade, as have other philanthropies. The attitude was that the GMU case was nothing special.

How do economists justify the unflappable lightness of their nonchalance?

First off, many opine that the donors don’t reallyinterfere in academic matters; it is just the optics that are less than optimal. There are some crucial details which mitigate this pronouncement when it comes to the GMU case, which are dealt with in a footnote.Nevertheless, in general, most economists are quick to denounce the idea that there are subtle procedural moves attached to donations that substantially alter the practices of universities, as well as the composition of what is taught and researched.

Secondly, for most economists, there are no such things as conflicts of interest, at least when it comes to economic thinking. They regularly declare with ardor that no one is compromising their pronouncements or perverting their beliefs for money. Years ago, I documented this attitude with regard to the culpability of economists for the Great Crash of 2007-8, even in the face of embarrassments such as the scathing portrayal of certain figures in the documentary Inside Job, or the prospect of a code of ethics for economists by the American Economics Association (AEA), a point to which I will return.In the GMU case, the prescription for disclosure was rejected—hence the need for FOIA requests. The economists generally argued that the people involved had long ago settled upon their personal political beliefs; they were just being selected by the donors to provide a coherent curriculum in “free market doctrine.” I shall argue below that this imprecision over the criteria of which doctrines have been selected allow this sense that the ecology of knowledge persists unaltered in the face of concerted Koch intervention.

Third, the orthodox economist would be inclined point out that all potential donors, just like all fledgling academics, possess their own prior interests and convictions, which will be subject to further selection one way or another. It is not the moneythat makes the difference in the larger scheme of things. As the late Craufurd Goodwin of Duke University used to say, “The only tainted money is the money that t’aint [sic] mine.” In other words, the sociology of knowledge pretty much works independently of the wishes of any funders involved, since everyone is selfishly scrambling for support. Money as such never taints the well of human inquiry, or so most economists postulate. Of course, one’s appreciation for this putative conservation rule might be qualified when one learns that Goodwin had himself been a Program Officer for European and International Affairs under McGeorge Bundy at the Ford Foundation during the Cold War.

Finally, although they might not say this out loud in front of journalists, many economists tend to suspect that all the complaints about the Kochs are just sour grapes, an ideological reaction deriving from the wailers’ disdain for the politics of the Koch brothers and their minions. After all, what’s so suspicious about wanting to “rectify the bias” of academics hostile to free markets and freedom of speech? That sounds like something most economists would voluntarily support in any event, independent of whomever was fronting the funding. But, just as in the previous cases, this ignores the actual content of the doctrines that the Koch brothers, as well as that of many of their fellow travelers and cooperating philanthropists,seek to promote through their initiatives.

It will come as no surprise to realize that public education is being brutally weaned from state support across the developed world in the recent past, and that private funding has been touted as the deliverance for cash-strapped universities. In this regard, it is pivotal to realize the significance of the fact that George Mason University is a publicand not a private university. Far from being a mere shifting of sources of sustenance, this trend itself constitutes one of the prime prescriptions of the political doctrine that motivates the Kochs, namely, neoliberalism.Neoliberalism shouldn’t be confused with actual libertarianism; it is predicated upon intervention to bring about the types of government and markets that the neoliberals believe are necessary for the success of capitalism: it just won’t happen by itself. One of their central doctrines relevant to the current controversy is their belief that an efficient market is one that processes and validates information, and conveys it to the appropriate agents when and where they need it. Human knowledge is thus first and foremost a market phenomenon.

A direct consequence of this doctrine is that the state should not control public education: the purpose of education is the personal accumulation of human capital, and notthe creation of the common denominator of an educated citizenry. Hence many of the major figures of the Neoliberal Thought Collective—Milton Friedman, James Buchanan, Charles Koch—long ago proposed that education be “privatized” in most of its various manifestations. Knowledge is paltry if not put up for sale, as they see it. This is the major consideration which dictates that the points at issue at GMU and elsewhere are not merely some symmetrical offsetting response to left wing donations to universities; rather, the whole point of the Koch brothers’ intervention is to produce a different kind of university, one which renders government-run education much more responsive to market signals and market dictates. It is a world where people of means can freely buy the kinds of doctrines that they wish to be conveyed to the young, without being coy or ambagious about it. Hence the Koch’s doctrines and their philanthropic behaviors are tightly bound into a single package, displaying a coherence not found in the motives of lesser philanthropists. This explains why the Kochs are willing to conduct their negotiations with universities in secret, to carry out their stipulations through cutouts and hard to trace intermediaries and foundations, to package their offers with other rich (and anonymous) donors en bancand to impose conditions upon their bequests that effectively neutralize all previous principles of academic freedom in the long run.

There is a different implication of neoliberal conceptions of knowledge, and that extends to the ideas which constitute the microeconomic orthodoxy. Once information was introduced into the standard pricing model, it was discovered there was no single correct way to formalize epistemology. Through a sequence of different models, the profession moved from the agent as capable of super-cognition, to the portrait of the agent as a flawed vessel for knowledge, offset by a neoliberal notion of the market as super-information processor.Truth became a function of the skewed and arbitrary ability to pay; and consequently, economists were deemed to have possessed superior wisdom concerning whom should get to know what under which circumstances. As self-appointed Engineers of the Human Soul, this reinforced their conviction that there was no need to worry about conflicts of interest, nor indeed, about the increasing prevalence of unashamed mendacity and fake news.Thus, the Koch interventions were therefore regarded as essentially harmless.

Of course, economists would be most interested in the ways this promotes the careers of other economists, but the ambitions of the neoliberal thought collective extends well beyond the social sciences, even unto the realm of the natural sciences. Neoliberalism is supremely hostile to expertise, which is the flip side of its hostility to old-school universities. Hayek denounced intellectuals as ‘second-hand dealers in ideas’, and modern neoliberals extrapolate that inclination to the limit. In their view, even natural scientists need to learn to subordinate their own research to “the market,” and accept that tomorrow the market might devalue their own expertise in favor of the beliefs of less trained participants. “Freedom” is in this instance made manifest as the ability to insert your own 2 cents at will; let the market sort it out. This insight prompts another reconstruction of university life, this time in the direction of so-called ‘open science’ and ‘citizen science’.The literal construction of a ‘marketplace of ideas’ leads directly to the elevation of the market as the ultimate validator of truth in most dimensions, and the subordination of professional researchers to a less central role, surrounded by platforms that harvest the unremunerated labor of the reserve army of the undereducated. This is creative destruction with a vengeance, which further diminishes the role of the university.

Consequently, while economists tend to think they come equipped to understand all the implications of a thoroughgoing marketplace of ideas, the four conventional ideas sketched above reveal that they currently are far from having a comprehensive appreciation of the “economics of information” as it plays out in the world.

An example of this inadequate approach is a very brief code of professional conduct ratified in April 2018 by the AEA. Its actual wording is significant. It states, “Integrity demands honesty, care and transparency in conducting and presenting research; disinterested assessment of ideas; acknowledgement of the limits of expertise; and disclosure of real and perceived conflicts of interest.”  There was nothing in the statement proposing that the AEA or any other institution should promote or enforce disclosure, nor indeed define what should be disclosed; it says absolutely nothing at all about “academic freedom.” “Integrity” is apparently conceived as personal virtue, although a subsequent paragraph promotes “a professional environment with equal opportunity and fair treatment for all economists.” This species of “environment” seems be more concerned with employment of economists than the preservation of academic inquiry as such.

This is why the GMU incident deserves far more scrutiny than it has received from economists, and academics in general.

Some sources report the document dump reveals that ‘the Kochs’ reserved the right of designation of members on faculty selection committees and veto rights in earlier gifts to Mercatus, but in the Scalia School case, the agreement stated that they would have no power over retention or promotion. On this, see . However, the situation at GMU was far more complex than that, because the emails independently stipulated whom among existing Koch-financed GMU faculty and the Federalist society would make such decisions for the Law School; and furthermore, the Kochs reserved the right to withdraw from the agreement without notice or just cause. Clearly, this Sword of Damocles allowed them to veto any subsequent choices, all the while asserting formally in the document that they unreservedly supported academic freedom. The Kochs, after decades of experience, have gotten good at circumventing faculty who don’t understand how the takeover of universities actually works.

See Philip Mirowski, Never Let a Serious Crisis Go to Waste(Verso, 2013), pp. 218-223.

See, for instance, James Petras, “The Ford Foundation and the CIA,” at: .

See, for instance, the fascinating case of BB&T: Douglas Beets, “BB&T, Atlas Shrugged, and the ethics of corporation influence on college curricula,” Journal of Academic Ethics, 2015, (13):311-344.

This is not the place to explicate fine points of political doctrine. However, see Mirowski, Never Let..(op. cit.) as well as: .

This is described in detail in: Philip Mirowski and Edward Nik-Khah, The Knowledge we Have Lost in Information, (Oxford, 2017).

See, for instance, Matthew Gentzkow & Jesse Shapiro, “Competition and Truth in the Market for News,” Journal of Economic Perspectives, (2008) 22:133-154. On his later work, “A reader of our study could very reasonably say, based on our set of facts, that it is unlikely that fake news swayed the election,” said Gentzkow. At: .

For a greater elaboration of this argument, see Philip Mirowski, “The Future(s) of Open Science,” Social Studies of Science, 2018 at:

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25 comments

  1. JTMcPhee

    The New Golden Rule: “Them as has the gold (or money and influence) rules.” (re-cast to avoid any charge that I am a Gold Bug…)

    I recall other actions by many sociopathic malefactors of great wealth to control the larger narrative and school curricula through history, like “supporting” the Catholic Church in all its machinations. The Reformation opened the door, along with common understandings of Darwin’s notions, to Calvinism. I was bred up in the Presbyterian church, where TULIP blossomed in the young minds of the catechism classes and was reinforced in every bit of the Westminster Fellowship youth group’s activities (the Total Depravity proven by all the efforts of young hormone sufferers to get into each others; pants). A pretty sick set of doctrines, , when one gets on a little bit in life, and sees how humans really interact, and how “the Calvinist economics” actually work.

    So the ho-hum economists and the media midgets are sort of right, at least in pointing out that there’s nothing new in what the Kochtopus and all the other wealthy individuals and their “philanthropies” are about. Huge amounts are spent to control the content of Texas lower-grade text books, because as those go, so goes all the curricula of most of the country.

    “If only the people were aware of what is being done to them, they would __________________.”

    Reply
  2. Karen

    Excellent description and analysis of the two competing educational paradigms. Both have merit, in my view. Ossification of views among an academic elite is not a good thing. On the other hand, a complete overthrow of the paradigm of shared knowledge, validated by experts, is likely to leave us in a very bad place.

    Reply
  3. allan

    The fact that the evergreen from Inside Job didn’t make Hubbard a pariah
    in the economics community tells us all we need to know about
    the intersectionality of integrity and academic economics.

    Reply
    1. Arizona Slim

      Oh, do I remember that one. Glenn had to finish writing that textbook ASAP! Nothing was more important! Not even the collapse of the world economy!

      Reply
    1. Larry Motuz

      Oh, they don’t argue that. They know that monetary incentives work. They just don’t want to agree that money isn’t neutral in terms of what it ‘incentivises’ any more than does how money is distributed in terms of macroeconomic ‘growth’.

      This allows them to pretend that money is neutral.

      Reply
  4. chuck roast

    Back in day, our Economics faculty used to tell us that the study of economics was “value free.” What was presented was simply a reflection of real world conditions. No value judgements were to be made. These fellows, like many of our parents, were all deeply scared products of the Great Depression and committed Keynesians (public policy anyone?) to a man. Of course, all we had to do was pick up a copy of Theory of the Leisure Class, and if Veblen’s prose didn’t hurt our hair to badly, we knew this was a bunch of nonsense.
    The worthy successors to this faculty now offer two different Bachelor of Science in Economics degrees. Indeed, the profession has gone entirely through the looking-glass. If we see the past (economic anthropology) or the future (post-capitalism), history will be destroyed. Now we all know that the Red Queen has a cock-eyed head and the royal crown would never fit her. Moreover, the Red Queen ate the stolen tart and is beyond redemption in any case. Are we to believe the Jabberwocky? Is time itself in danger? Can we recapture the Chronosphere? Can we get back through the looking-glass? And if we do, will we all wake up in mental hospitals?

    Reply
    1. Larry Motuz

      Twas brillig, and the slithy toves
      Did gyre and gimble in the wabe:
      All mimsy were the borogoves,
      And the mome raths outgrabe
      .

      I’ve no doubt that Carrol had just read Edgeworth’s Mathematical Psychics and was just trying to clarify what had just happened to mathematics and to economics.

      I also think that it is, quite accidentally of course, a good summary of the current neoclassical paradigm.

      Reply
  5. Synoia

    Antonin Scalia School of Law at George Mason University

    Hmm.. ASSoL at George Mason University.
    Can these people be that stupid?
    I’m enrolled in ASSoL at GMU, or
    I’m an ASSoL Graduate

    One could not have chosen a better name working for Monty Python.

    Secondly, for most economists, there are no such things as conflicts of interest,

    Because each item, pronouncement, thesis, or work product is to ensure the Economist’s Master that their view of the universe is correct, then, obviously there is no Conflict of Interest.

    Reply
  6. Denis Drew

    [I working on something that will include this:]
    If you want to understand economics: the market is more important to know than the mechanism. I spent 20 years going up and out on every logical branch I could, in case I might miss something: a book about the last 1,000 years of world trade (Power and Plenty), a book on fascist Germany’s prewar economy (The Wages of Destruction, Piketty (Capital).

    Economics is not mechanics and it’s not physics. If you know a market, you really don’t need to know the mechanisms (ask lots of successful business owners) – and if you don’t know the market, knowing the mechanisms (Shrek?; he thinks) wont help you handle the world that well.

    [the issue at had was this:]
    Even assuming James Sherk’s union “cartel” theories were sound on some level – nevertheless — we know that 40% of our workforce is struggling on starvation wages – and that the rest of us could easily afford to pay them. 40% are living on 10% of overall income – 59% are living on 70% — and 1% are living on 20%.

    Reply
    1. Left in Wisconsin

      James Sherk is a complete charlatan. Last I heard, he was disingenuously “encouraging” unions to voluntarily give up the duty of fair representation.

      Reply
  7. teacup

    “The Corruption of Economics” by Mason Gaffney dives deep into this. “False Education in our Colleges and Universities” by Emil O. Jorgensen referenced within this gem gives an example – ‘…in the 1924 Professor Richard T. Ely was the director of the Institute for Research in Land Economics and Public Utilities at the University of Wisconsin at Madison but relocated over questions of it being entirely financed by…certain corporations and economic groups seeking to have privilege and monopoly taxed less and industry and consumption taxed more… Although it was denied that the removal of Prof. Ely was in any way due to compulsion, it is a curious fact that no sooner had Prof. Ely gone than the Board of Regents voted that no more money “shall in the future be accepted by or in behalf of the University of Wisconsin from any incorporated educational endowments or organizations of like character.” …But Prof. Ely with his old-time shrewdness and skill had dodged the descending ax. Suspecting evidently that such a resolution would sooner or later be passed, the Professor began in the early part of the year to cast about for a safe place to escape and picked out as his refuge Northwestern University in Evanston – a privately endowed institution noted for its conservatism and its close affiliation with the powers that be… Having definitely laid his plans Prof. Ely then added Frank O. Lowden (former governor of Illinois) and Nathan W. MacChesney (General Counsel for the National Association of Real Estate Boards as well as a trustee of Northwestern University) to his own board of trustees… Very grateful for the welcome extended to him by Northwestern University, Prof. Ely commences his activities in that institution with larger plans, wider ambitions and a harder determination than ever to build up a great national machine that will promote, under the cloak of “disinterested research,” not the welfare of all, but the special interests of a few…’

    Reply
    1. Left in Wisconsin

      Ely had a complicated history. Business interests tried to drive him out of the Univ of Wisconsin in the 1890s not because he was a corrupt neoclassical economist but because he was argued to be a socialist. (He wasn’t.) He was responsible for bringing JR Commons, one of the great institutional economists, to Wisconsin and at least partly responsible for the quality of the economics faculty at Wisconsin that developed in the 1910s many of the state programs (unemployment insurance, workers compensation) that ultimately became models for the New Deal.

      But he became more right-wing as he got older. He campaigned to have Robert LaFollette removed from the Senate because LaFollette was anti-WW1 and then went off to Northwestern as a pretty conventional rightwing economist.

      Interestingly, a number of pro-labor New Deal economists followed a similar trajectory. For example, Leo Wolman.

      Reply
  8. teacup

    “The Corruption of Economics” by Mason Gaffney dives deep into this. “ False Education in Our Colleges and Universities” by Emil O. Jorgensen referenced within this gem gives an example- ‘…in 1924 Professor Richard T. Ely was the director of the Institute for Research in Land Economics and Public Utilities at the University of Wisconsin at Madison but relocated over it being financed by…certain corporations and economic groups seeking to have privilege and monopoly taxed less and industry and consumption taxed more…Although it was denied that the removal of Prof. Ely was in any way due to compulsion, it is a curious fact that no sooner had Prof. Ely gone than the Board of Regents voted that no more money “shall in the future be accepted by or in behalf of the University of Wisconsin from any incorporated educational endowments or organizations of like character.” …But Prof. Ely with his old-time shrewdness and skill had dodged the descending ax. Suspecting evidently that such a resolution would sooner or later be passed, the Professor began in the early part of the year to cast about for a safe place to escape and picked out as his refuge Northwestern University in Evanston – a privately endowed institution noted for its conservatism and its close affiliation with the powers that be… Having definitely laid his plans Prof. Ely then added Frank O. Lowden (former governor of Illinois) and Nathan W. MacChesney (General Counsel for the National Association of Real Estate Boards as well as a trustee of Northwestern University) to his own board of trustees… Very grateful for the welcome extended to him by Northwestern, Prof. Ely commences his activities in that institution with larger plans, wider ambitions and a harder determination than ever to build up a great national machine that will promote, under the cloak of “disinterested research,” not the welfare of all, but the special interests of a few…’

    Reply
  9. flora

    Thanks very much for this post. This has been playing out at my uni for some time now.

    2 thoughts:

    Money. The Kochs certainly appear to hate taxes almost as much as regulation. Public universities and colleges require adequate funding from the public(taxes) to support the mission of education – as opposed to just training.
    A good education requires good teachers; professors who are paid well enough to make a career in academia – not a king’s ransom but not a church mouse salary either – and the freedom to research into all areas.
    So, the neoliberals get a huge tax cut passed in states and at the federal level; then claim there’s not enough state/federal money to support higher ed (please, no MMT talk here, I’m making a different point); as higher ed struggles financially, pretend to be a white knight riding in with grant money to save the day. It’s cheaper than taxes for the grantors, since the “white knight” controls how much and how often they give money. And, it gives them leverage over the curriculum. There are many tricks to claim a “chaired” position isn’t “really in the department”, so the grants are “not changing the quality of education” they will argue. It’s a vicious financial circle for higher ed….

    Philosophy. The neoliberal PR campaign of ‘the market is the ultimate and true arbiter of all’ has all the appearance of a regression to what I can only call inverted marxist dialectical-materialism as espoused by the old soviets; where anything, even scientific findings, that threatened the supremacy of the doctrine’s claim of economic inevitability, was suppressed. ( No wonder the old soviet finally collapsed. )
    The neoliberals substitutes a sort of libertarian dialectical-materialism that requires suppression of any theory that contradicts their claim of ‘market infallibility’ and inevitability. This is dogma, not science or even economics.

    Just my opinion, of course.

    Reply
    1. flora

      Here’s one example of both the old soviet and the neoliberal dialectical-materialism precepts being nothing more than dogmatism offered as true by fiat:

      1. the chairman’s great leap forward, especially with regard to backyard furnaces being a source of industrial steel production. Expertise was not needed; command and willpower were supposedly enough to make it happen. (They weren’t.)

      2. from the post:
      ” Neoliberalism is supremely hostile to expertise,…”
      The neoliberal talk about ‘everyone can be an entrepeneur’ seems much like the claim ‘every peasant can become a high-grade steel producer in his own backyard .’

      Reply
  10. greg

    People who are paid to think, think what they are paid to think.

    The Kochs, and those like them, seem to labor under under the delusion that reality will conform to their beliefs. Since they are powerful, they are able to inflict this delusion on society.

    The return to the real world from the world of delusion is always extremely costly. We will all pay.

    Reply
  11. EoH

    Thanks for this discussion. I admire your work.

    It’s useful to understand that part of neoliberal economists’ attitude toward education was to redefine it so as to bring their own then marginalized and discounted views into the mainstream, in fact, to make them the mainstream.

    It seems important also to emphasize, as you did, that the stories that come out about the Kochtopus’s intrusions into education relate to those involving public universities: George Mason, Florida State. It seems unlikely that private universities are being left out of this movement, they’re just better at keeping mum when big donor money is on the line.

    The NTC seems driven less to make their market views a success than to make their principal wealth patrons successful, indeed, to make their views appear unopposed. Focus on “the market” and the perverse notion that the individual is not a social animal dependent on mutual aid, but a collection of resources to be located and harvested, like gold on Indian lands, seems useful in hiding the fundamentally selfish, personal nature of the NTC enterprise.

    Reply
  12. Altandmain

    This is like the Establishment Democrats and their claims that money doesn’t influence them.

    Money destroys whatever claims on integrity they had, especially when it comes as questionable sources like the Koch brothers. It makes absolutely no sense and I doubt they believe it themselves.

    Let’s face it, this is a huge conflict of interest and economists have a huge influence over the direction of society, so this is a big deal. The ones the Koch brother has bribed are basically bought.

    Reply
  13. Enquiring Mind

    Happy to reference , about which I learned in an NC comment

    I encourage readers to learn what MacLean writes about James Buchanan, GMU, Koch and more.

    Reply

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