Tuesday, September 16, 2014


Are donations euvoluntary?

The Center for Public Integrity has recently released an expose on Florida State University's Economics Department and their dalliance with Koch Foundation money. The low-down: the Charles Koch Foundation made an offer with strings attached: hire libertarian professors, fund libertarian students, or no donation for you.

Assume for the moment that you've no dog in the fight. Consider if a strings-attached university donation could be euvoluntary. If not, which EE condition(s) are violated? Is there a BATNA desperation problem lurking in there? I'm well aware of the sorry tendency of a tiny few university faculty to claim that they're desperately underpaid (and for adjunct faculty, there might be a grain of truth to that), but largely, tenured professors enjoy excellent salaries, comfortable job security, intellectual stimulation, and high social status. Nothing short of a bloated excess of self-regard, an over-inflated ego, or an ostentation of peacocks' worth of preening vanity would cast the tenured university professor in the same category as a desperate Haitian highlander. Babies won't starve for want of a foundation grant.

Perhaps there's something to the BATNA disparity story. If the Koch Foundation doesn't send its millions to University X, they can as easily send it to University Y. Their BATNA is to absorb some piffling transactions costs and move their grasping tentacle elsewhere, yes? For FSU, the BATNA is to expend precious department resources (including, importantly, valuable time that could otherwise go towards research) in the pursuit of raising funds. Is this difference in opportunity cost morally relevant?

Perhaps the idea of modeling donations as exchange is perverse on its face. Academics are sacred; commerce is profane. Do strings-attached academic donations cross the same moral intuitions as the Citizens United ruling? If so, does it matter what the strings are? If political advocacy has no place on campus, then it is my sad duty to inform you that there's quite a bit of housekeeping to be done.

Of course, as we consider the costs of accepting tainted money, consider also the benefits. None other than Mungo himself points out that liberal students strengthen their arguments and hone their important critical thinking skills by exposure to alternative analysis, by wrestling with alternative worldviews. Surely this is an important function of a university education.

I asked you to suspend your skepticism. You may now restore it. It's fair to wonder whether or not I'd be so sanguine if the roles were reversed—if instead of the Koch Foundation wishing to pressure a department chair for libertarian funding, it were George Soros or the Gates Foundation pressuring a department chair for left-wing faculty. Would I defend that? It's cheap talk to say that I would, but I think I've made a case here and there on this ol' blog of ours in favor of robust protections for the First Amendment and the general rights of folks to transact as they see fit. As long as the research that comes of such funding meets the standards of the academy, I'm as fine with [left-leaning economist's name redacted] getting a grant as I am with [right-leaning economist's name redacted] getting a grant. I'm enough of a Humean to think there's a far greater danger in empowering the political elite to decide which ideas are fit for research and class discussion. Counter speech with speech, not with force, says I.

Caveat: strings-attached transfer payments for poverty relief imply a different analysis, one limited by liquidity constraints and truly desperate BATNAs. I am not blithely claiming that all strings are hunky-dory, but edge cases are particularly unlikely for university department endowments. Straight cash donations without riders for the desperately poor are the best way to go, both theoretically and empirically.


Do you have suggestions on where we could find more examples of this phenomenon?