Can Philanthropy Rescue Higher Education?

By the end of World War II, freedom and its institutions were under siege in the United States. Woodrow Wilson had rationalized the administrative state; Roosevelt’s New Deal had redirected Americans’ loyalties from their localities and states toward the federal government; and the socialist dreams that had given rise to both Nazi and Communist totalitarianism had infected many of America’s intellectual elite.

These events awakened a number of philanthropists to the pressing need to understand, restate, and amplify the philosophic foundations of a free society and to re-ground our social institutions, including educational and charitable entities, on classical liberal principles.  Ultimately, they focused on restoring respect for limited government rather than trying to change the institutions that had become permeated with Progressivism. They chose to support small nodes of classical liberal scholarship, wherever they appeared, inside or outside higher education.

F. A. Hayek’s essay, “The Intellectuals and Socialism” (1949), was a guidestar for many early classical liberal donors.  Hayek, reflecting on the generation and diffusion of ideas, brought much-needed attention to the role of intellectuals:

It is the intellectuals…who decide what views and opinions are to reach us, which facts are important enough to be told to us, and in what form and from what angle they are to be presented. Whether we shall ever learn of the results of the work of the expert and the original thinker depends mainly on their decision.

Given the role of intellectuals, in and out of academia, the idea of the free society needed crucial support in two areas, according to Hayek. One was support for genuine scholars investigating, restating and amplifying the ideals of the free market and civil society. The other was support for the effort to convert intellectuals from a belief in socialism to a belief in the principles of classical liberalism.

By the mid 20th century, American universities were already largely captives of Progressive ideals.  They had become not only laboratories for social reform but also the primary training ground for the technocratic elite that would run the administrative state.  University graduates, especially in economics, political science, and sociology, populated a growing federal civil service while federal funding for research flowed in increasing amounts to the universities.

As academic purpose, public policy, and philanthropy became entangled in unprecedented ways, the role of colleges and universities diminished as independent institutions of civil society. The opportunities for classical liberal influence in this academic world were dim. 

Classical liberals understood those limitations. In the 1961 concept paper that outlined the future work of the Institute for Humane Studies (IHS), the institute’s founder, F. A. “Baldy” Harper, observed:

Any attempt to establish a hard-core libertarian development on campus, especially since it is a very small minority, would be anathema to the dominant factions in even the best of these institutions. The colleges and universities should be kept on terms as friendly as possible, of course, for whatever cooperation can be developed in temporary and limited ways by continuous trading.

Harper, working closely with Hayek and numerous other scholars and business leaders, recognized a limited possibility for advancing liberty through colleges and universities because, he wrote, “the formal institutions of learning have their center of gravity elsewhere, and the ‘protection of the institution’ operates to censor in one way or another most of the effective work for liberalism.”

Therefore, the core strategy of the donors who sought to revive classical liberal philosophy became one of investing primarily in people and ideas rather than in universities themselves. 

Central to the development of this strategy in the early post-war years were the Earhart Foundation (est. 1929), the William F. Volker Fund (est. 1932), and the Relm Foundation (est. 1951), each of which sought to identify and support scholars of the history, theory, and practice of the free society.

The staffs of these funds developed a “search and amplify” strategy for finding scholars whose work advanced the intellectual case for the free society. Volker, for example, employed “readers,” including Murray Rothbard, Rose Wilder Lane, and Frank Meyer, to scan scholarly literature and identify promising candidates for support. A Volker staff member would travel to meet these individuals, who sometimes held teaching positions at universities, and assess their talent and potential contributions to the understanding of the free society. 

When the foundation’s support was deemed worthwhile, it was arranged quietly, to sustain the scholarly work rather than draw attention to the foundation’s mission.  This support enabled many talented graduate students and scholars to proceed with their work, whether or not they had faculty appointments. More importantly, it led to a prolific era of publishing, ensuring that classical liberalism could compete in the marketplace of ideas.

By the 1980s, the John M. Olin Foundation, adopting some of those strategies, was having a little more success in generating “gains from trade” with the universities. In A Time for Truth (1978), Olin’s president, former Treasury Secretary William Simon called for a new “counterintelligentsia” to challenge the prevailing statist winds in higher education and media.

This work needed scholars and intellectuals “dedicated consciously to the political value of individual liberty, above all,” he wrote. By targeting specific scholarly arenas, such as the emerging field of law and economics, the Olin Foundation was able to establish tightly defined academic chairs, focused programs and campus-affiliated centers that made a significant impact on scholarly research and American institutions.

In the pre-Internet era, those philanthropic efforts—modest in scale compared to the budgets of giants such as the Rockefeller, Ford, Russell Sage and Carnegie foundations—succeeded in creating a social network of scholars, thinkers, and activists working to define and advance the ideas of liberty. That network included many organizations outside the universities, but also sparked growth in the number of professors who were eager to defend classical liberal ideals.

Have these efforts improved the prospects for tackling the much-needed root-and-branch reform in today’s universities?

With a growing number of scholars working in classical liberal streams of thought and holding academic teaching and research positions, it may seem that the time is ripe for classical liberal philanthropists to move beyond the tasks of intellectual recovery and undertake the tasks of institutional reform in higher education.

There are several interesting efforts underway, such as Texas governor Rick Perry’s higher education reform initiatives.  On the side of curriculum reform are the numerous academic centers on free enterprise, free institutions, and constitutionalism that have been planted in the past two decades.

Upping the ante, the Institute for Humane Studies, originally conceived as an alternative base for libertarian scholars, has just announced a major campaign to position thousands of classical liberal graduate students as top candidates for tenure-track positions as the baby boomer generation retires. 

Because those efforts are heavily dependent on philanthropic resources, however, we should consider whether they are attending to important lessons from the past.

Pierre Goodrich, a long-time trustee of Wabash College in Indiana, ultimately directed his wealth to founding Liberty Fund, an independent educational foundation, because he believed that the institutional dynamics of higher education, even in a small liberal arts college where he had significant influence, prohibited meaningful institutional reform. Today’s donors must consider whether conditions in the universities have improved or deteriorated since the 1960s.

The universities have become creatures of government funding while also contesting state governments for faculty and staff benefits. Donor resources fed into the hungry maw of a college or university today will be unlikely to generate favorable changes in the beast’s constitution.

A principled skepticism about the prospects of institutional reform in today’s universities may be the best tool a classical liberal donor can bring to bear on the problems of higher education. Philanthropists seeking intellectual influence and institutional recovery in higher education should perhaps be seeking primarily to foster communities of scholars and students, much as the earlier donors did.  This is most likely to be accomplished only where there is genuine independence from government policy and funding.

Colleges that shun federal funding (such as Grove City and Hillsdale); new colleges that re-frame systems of governance, administration, and academic freedom; commercial enterprises that specialize in technical and professional training (and maybe even in liberal education itself); and independent institutes to promote both scholarly and policy research are viable models for philanthropists to consider.

Progressive philanthropy conquered America’s public institutions because it did not shy away from using its resources to harness public monies to its ideological ends. Classical liberal philanthropy, to be true to the principles of the free society, cannot adopt the same strategy, but must rediscover how to leverage and coordinate private wealth to unleash what Hayek called “the creative powers of a free civilization.”