Economics departments around the country are getting a nasty dose of the real world. In the past few months, million-dollar donors of the Republican Party have seized control of the Florida State University (FSU) economics program, and the University of Chicago (UC) nearly assigned a fraudulent Goldman Sachs banker to teach the discipline to undergraduates.
New College’s Economics Department has also been in the process of searching for a new faculty member to add to their roster.
While such scandalous news would be unlikely to come out of a New College hiring, the role that money and influence has played in recent decisions made by top-ranked, highly-regarded universities has been perceived by some
as deeply troubling.
In May 2011, top Republican Party donor Charles Koch pledged $1.5 million to the FSU Economics Department. In
exchange for the hefty donation, Koch’s representatives were given authority to screen and approve or disapprove of any hires for a new program that goes by “political economy and free enterprise.” The program was shaped by Koch’s donation.
Such a development lacks historical precedent, and departs far from the traditional relationship between donors and universities.
“Traditionally, university donors have little official input into choosing the person who fills a chair they’ve funded,” Tampa Bay Times writer Kris Hundley wrote in an article. “The power of university faculty … to choose professors without outside interference is considered a hallmark of academic freedom.”
In the academic year 2011-2012, Koch rejected a staggering 60 percent of job candidates suggested by FSU faculty.
Rachel Maddow, speaking on the story late last year, said it was “objectively insane” that the State of Florida has
allowed this to happen.
From 2007-2011, Koch and his brother, David, spent more than $30 million donating to hundreds of universities around the country, with similar quid pro quo relationships established. At FSU, at least, the climate has started to change.
“I didn’t actually know that this had happened,” junior FSU economics student Chelsea Colon said. “But it
makes sense. We’re not being taught ridiculous Republican craziness or anything, but our department has definitely shifted rightward.”
Money can buy influence, but as UC proved in late February, influence can also buy a job.
Former Goldman Sachs banker Fabrice Tourre was the only person found liable for committing fraud before the financial crisis, and was recently announced as a guest lecturer for undergraduate students at the UC, in fulfillment of a requirement for earning his PhD. Tourre currently owes the Securities and Exchange Commission millions in fees for his fraudulent activities.
Outrage sparked at publications ranging from Mother Jones to Salon, and a few days later on March 3 the Chicago Maroon – the university’s official newspaper – broke the news that Tourre would not be teaching the course after all, and that his requirements could be fulfilled elsewhere.
The initial reports were not inaccurate, as Tourre was slated on course schedules and the school’s website to lecture, and quotes provided by the administration to the Maroon only confirmed prior speculation. Whether bad press or an alternative method was behind the school’s decision to remove Tourre from the schedule remains to be seen.
When asked about UC’s initial decision, Assistant Professor of Economics Tracy Collins, currently vetting potential candidates to teach economics here at New College, was disapproving.
“You’ll see a lot of the top schools have a lot of professors who consult for these big banks,” Collins said. “How can
your program say ‘we’re teaching the future of America and corporate world ethics,’ but then ‘we’re hiring someone
who has questionable ethics?’”
The decision to take Tourre off the roster was met with mixed reaction among the UC student body. Many expressed relief, but some lamented the fact that an economist with deep experience would not be instructing them.
“I was hoping that with Fabrice Tourre, it would be different than with [other macroeconomics professors] in the past,” second-year student Allan Zhang said. “I guess I was hoping that his experience in the private sector and [investment] banking would add
something to the class.”
For Collins and the New College economics faculty, their search began with a focus on content: hiring a “true” macroeconomist with a focus on the United States and an approach that did not favor memorization and textbook- based learning.
“Sometimes you have no idea how what you’re learning in class can relate to the real world,” Collins explained. “So we’re looking at someone who’s interested in teaching students how to think and see how macro is occurring in the world today.”
Real-world application is an idea both FSU and UC – not to mention the many other schools looking to controversial figures with deep pockets – are quick to cite when defending the potential hiring of a fraudulent banker, or authoritative position given to a political heavyweight. Collins could only warn that at New College, “We don’t want to hire Bernie Madoff, either.”