Thursday, April 23, 2009

This Week's Hero: Gerald Gunderson

By Richard Vedder

Gerald Gunderson is my age and, like me, an economic historian. We both wrote economic history textbooks four score and seven years ago (give or take 45 years). We have always liked each other and respected each other. I only see Jerry once in a great while, but always enjoy the contact. He holds the Davis Chair in Free Enterprise (or somesuch name) at Trinity College in Connecticut, a fine liberal arts school.

Gerry made the front page of the Wall Street Journal today, and became my hero du jour or even hero de semaine. Trinity has a huge endowment for Gerry's chair --far more than needed to pay his salary. He has proposed over the years creating additional faculty positions consistent with the donor's intent --promoting free enterprise, market capitalism,etc. The college said that violates donor intent. But the school has tried now to spend the money on scholarships for international students, clearly not the intent of Shelby Cullom Davis. Allegedly some family members said it was okay to use the monies in an alternative way, although some of them now say they were not fully informed of either Prof. Gunderson's concerns or of Mr. Davis's clear intent (Trinity deceived them).

Gerry went to the Connecticut Attorney General, or at least that is what John Hechinger of the Journal reports, and told them of the alleged misappropriation. Hell has been raised, President Jones of Trinity has allegedly threatened Gerry (a dumb, dumb thing to do), etc. I suspect (and hope) that other alums, trustees, and donors will put President Jones's feet to the fire.

Universities do this sort of thing all the time. The Weidenbaum Center at Washington University in St. Louis was funded by many donors, the largest of which was the Olin Foundation. The donors clearly intended for the money to be used for promoting free market economics, the perils of regulation, etc. After Murray Weidenbaum retired, Wash U named his research center after him, but took the center off in an altogether new direction. Then there was the Robertson grant to Princeton, where the school returned big bucks to the family to settle what had obviously been a perversion of donor intent. The stories go on and on.

I think there should be criminal penalties against university officials who steal, in effect, donor money, and I think that court approval should be needed, perhaps after consultation with other heirs, before any modification of gifts can be made.

To be sure, times change, and often the resource allocations arising from restricted gifts may not be optimal in almost anyone's eyes. But unless the donor's intent is honored, universities are engaging in the moral equivalent of theft, which is morally wrong. The Ten Commandments may not count for much on college campuses these days, but flouting one of those commandments should have consequences, financial if not otherwise.

3 comments:

capeman said...

Too bad that investor Shelby Cullom Davis didn't have the foresight to spell out that if the endowment grew enough, the extra money should be used to hire more professors like Gunderson -- if that's really what Davis wanted. Doesn't seem like so much to expect of someone who is said to have made hundreds of millions of dollars as an investor.

So now Trinity College apparently is left with asking the 102 year old widow and the children of Davis to read the dead man's mind about what his intentions were.

Perhaps instead of talking about "criminal charges", the Doc should try to do something useful -- like offer to lend Trinity his ouija board?

Cowboy said...

"So now Trinity College apparently is left with asking the 102 year old widow and the children of Davis to read the dead man's mind about what his intentions were.Do you know why a "Last Will & Testament" is called a "Last Will & Testament"?

"Perhaps instead of talking about "criminal charges", the Doc should try to do something useful -- like offer to lend Trinity his ouija board?"

It is difficult for me to understand why a person would continue to display their shallowness of mind, inferior intellect, and just plain idiocy and impaired mental processes on a regular basis.

BTW - Do you know William A. Collier?

capeman said...

Cowboy -- thanks for the useful insight. Especially about wills, testaments, you might add contracts, and then you'd understand my point exactly. If he wanted to fund multiple professorships, why didn't he say so?

Don't think I know William A. Collier. Should I?