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June 22, 2008
David Warsh, Proprietor


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The Chicago School (and the Russert Wing)

That didn’t take long.  Barely a month after the University of Chicago unveiled plans to purchase the hundred-year-old building of a theological seminary near the center of its campus in order to relocate much of its economics department and establish a Milton Friedman Institute, a faction of the faculty has cried foul.

 

One hundred and one professors, around eight percent of the university’s full-time tenured or tenure-track faculty, have signed at letter saying they feared naming a research center after the libertarian economist would “reinforce among the public a perception that the university’s faculty lacks intellectual and ideological diversity,” according to Jodi Cohen of The Chicago Tribune.

 

The argument, which surfaced last week, is ostensibly less about real estate – the divinity school, known as the Chicago Theological Seminary, will get a handsome new building across the Midway, closer to the poor neighborhoods that surround the university – than what the dissidents see as the potentially political nature of the new center.

 

From a greater remove (the distance, say, from Boston to Chicago), the symbolism of the transaction seems more noteworthy than the minority’s misgivings about political risk. At the heart of university, founded by Baptists, economics and business education are regnant. Proselytizing religion (now in the form of the congregational United Church of Christ, which operates the CTS), will be relegated to the far southeast edge of the campus. The university’s small Divinity School stays where it is, at the entrance to the main quandrangle, in Swift Hall. The property deal, in other words, is about gentrification. So it is not surprising that the minor premise of the protesters’ letter is that other departments are entitled to some share of the swag.  

 

Nor is it surprising that plans for a Friedman Institute have struck sparks. The very name calls to mind The Hoover Institution on War, Revolution on Peace, established in 1919 as a research institute on the campus of Stanford University by alumni Herbert Hoover, who later became the thirty-first president of the United States.  For many years, the Hoover Institution served mainly as a center for scholarly research amid the rich collection of European documents – and the occasional Russian refugee – that Hoover brought home from his tour as relief administrator after World War I.  Its relative autonomy within the university was symbolized by its garish tower at the center of the Stanford campus.

 

But after W. Glenn Campbell took over as director, in 1960, Hoover began a gradual expansion into the realms of advocacy and public policy.  Its senior fellows supplied a steady stream of advisers, formal and informal, to Ronald Reagan after he was elected president, in 1980 – including physicist Edward Teller and Friedman himself (who in 1977 had left Chicago for Hoover and the Federal Reserve Bank of San Francisco, keeping a promise he had made to his Oregon-raised wife). From then until Campbell was forced to retire in 1989, following an unsuccessful attempt to bring Reagan’s presidential library to the Stanford campus, the Institution’s presence was a continual source of aggravation among Stanford faculty.

 

The founding impulses of  the two organizations are very different. As a young man, Hoover already was a politician, whereas Friedman, who died two years ago at 94, spent a long career as a University of Chicago professor (he was a Nobel laureate, after all) before moving to California and becoming more absorbed in politics. “People have political lives apart from their scientific careers,” says Chicago professor Robert Lucas. “You can’t expect the university to police their off-campus activities.”

 

Moreover, Hoover himself handpicked Campbell and wrote him a “mission statement,” whereas the planning committee for the Friedman Institute, led by econometrician Lars Hansen, includes Lucas, Gary Becker, James Heckman, John Cochrane, Kevin Murphy and Eric Posner, all distinguished Chicago professors. Hansen says they plan to search for a director with strong academic credentials. Their plan, too, is to move the economics department into the CTS building, at least most of it – precisely the opposite of the physical arrangement that obtains at Stanford. So long as most of the economists are on the premises (presumably some may prefer to keep their offices in the business school), university values will have the upper hand.

 

True, custom argues against the propagation of personal authority in science; it is hard, for example, to imagine a Keynes Institute at Cambridge or Harvard universities. But then the sovereignty of the individual, as opposed to the authority of experts, has long been part of the gospel of Chicago School economics. Nobody exemplified it better than Milton Friedman.

 

An alternative interpretation of the perils at hand might recall the history of the Whitehead Institute, named for the instrument manufacturer who in the late 1970s sought to give $100 million for a program of directed biomedical research. Edwin “Jack” Whitehead offered the grant first to Duke University, then to Harvard, but was turned down in each case because of disagreements about who would be in charge. Nobel laureate David Baltimore, of Massachusetts Institute of Technology, then talked the entrepreneur into relaxing the demands for control he had sought; finally, over fierce opposition from a faculty minority, MIT accepted the grant. First under Baltimore, then Eric Lander, the unconventional lab was a brilliant success.  Today director David Page compares it to an artists’ colony. “What we do here at Whitehead is… empower maximally creative—really wildly creative—individuals to realize their dreams within these walls,” he says.

 

 Granted, even heavily empirical economics is not molecular biology; but given the series of surprises that have emanated from Chicago in recent years (floating exchange rates, modern finance, new growth theory, D. Gale Johnson’s mission to China, compelling work on the benefits of early childhood intervention), it is not unthinkable that the Friedman Institute might pay off in unexpected ways. Faculty misgivings are sometimes misplaced. (The Becker Center on Chicago Price Theory, which routinely describes itself as “founded by Richard O. Ryan MBA ’66,” loosely resembles the Whitehead model.)

 

Certainly the usefulness of the institute to Chicago economics would be very great. The CTS building, complete with a chapel and a cloud-capped tower of its own barely subordinate to that of Rockefeller Chapel, are located across the street from the quadrangle in which the economics department currently has its offices, and kitty-corner street from the sleek new quarters of the Graduate School of Business. The allocation of resources among the departments of a university is a perennially sensitive matter, and the institute would give Chicago economists (and, to some extent, their crosstown compatriots at Northwestern University) a large source of off-balance-sheet funding for visiting scholars, post-docs, and researchers. In other words, it might confer the same out-of-sight advantages as does the presence of the National Bureau of Economic Research in Cambridge, Mass., for Harvard and MIT. Moreover, just as Stanford’s Hoover Institution has become a haven for Chicagoans who couldn’t abide Lake Michigan winters (Becker is an annual visitor, and former business school dean George Shultz is, in effect, a naturalized citizen), so Chicago’s Friedman Institute might become home to those who want to maintain a connection with the university but prefer not to live there year-round.

 

One thing for sure: the city of Chicago, with its booming futures and derivatives markets, can afford to support such a venture. The university’s start-up investment is expected to be around $250  $200 million (half for facilities and half for an operating endowment), in the hopes that its seed money, and more, can be recovered in due course from private giving. (Chicago’s endowment has grown from less than $1 billion to more than $6 billion in twenty years, but is dwarfed by those of Stanford and Harvard.) Thanks to the success of Silicon Valley, the number of Hoover Institution fellows has grown to more than 240 in recent years. Chicago, meanwhile, has held together its economics capabilities with the aid of business school salaries and help from the American Bar Association, in the form of supplementary research grants. The chief effect of the new center will be to enable the Windy City to continue to play in the big leagues of global economics.

 

The economics department and its Friedman Institute won’t move into headquarters until 2012, when the new CTS building, at the corner of Dorchester Avenue and 60th Street, is complete. Two thorny problems remain: how to reconfigure (in a way that doesn’t invite economist jokes) the large and beautiful chapel; and what to do about the beloved Seminary Bookstore, the campus’s best, that now occupies the building’s basement. On grounds of karma alone, it seems unlikely to want to stay.

 

                                           xxxxx

 

Those seeking to understand the surprising outpouring of grief over the sudden death of television newsman Tim Russert earlier this month can do no better than to read Martin F. Nolan’s story of How Tim Russert Got His Start on the webzine Huffington Post.

 

Nolan recalls the consultations that preceded lawyer Russert’s moves in the 1980s; first, from Daniel Patrick Moynihan’s Senate office to Mario Cuomo’s New York state house, then in 1984 to a behind-the-camera job at NBC. Russert quickly astonished nearly everyone by rising to prominence as an on-screen personality – after 1991, as host of broadcast television’s “Meet the Press”—on the strength of political acumen, fair play and hard work. Along the way, he met and married Maureen Orth, of Newsweek, Vogue, and later Vanity Fair, herself something of a news saint (she is the woman to whom Larry McMurtry dedicated his stoic’s bible, Lonesome Dove.) To close out the memorial service last week, Bruce Springsteen delivered (via satellite from Europe) a quiet solo version of Thunder Road.

 

Nolan, for many years Washington bureau chief of The Boston Globe, understands better than most that civic responsibility is among journalism’s highest ideals. Of his friend Russert he writes, “Nuns and Jesuits trained us both, with minimal emphasis on self-expression and more on what Tom Brokaw calls ‘accountability.’ Whatever that word means, it’s probably the opposite of ‘snarkiness,’ a modern media hallmark.”

 

Russert had wide associations in the news business – it is not too much to say he was a leader of a wing in the profession, one in which democracy, loyalty and rootedness are highly prized. In some quarters, the Snarks have got the upper hand. The Russert wing is down.  But don’t figure that the tradition died with Russert. As he demonstrated, accountability succeeds.

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