Austrian economics

Mizzou Received $5 Million to Hire Austrian Economists. A Lawsuit Claims It Misspent the Money.

Terms of the grant specified that if Missouri did not use the money to hire free market professors, the donation would revert to Hillsdale.

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Sherlock Hibbs, a wealthy Wall Street financier with ties to the University of Missouri, died in 2002. A fan of free market economics, the Austrian School, and Ludwig von Mises in particular, Hibbs specified in his will that $5 million would go to the university for the purposes of hiring "dedicated and articulate disciples" of this philosophy.

There was an interesting catch. If Mizzou failed to use the money to fund acolytes of Mises, the donation would instead go to Hillsdale College, a conservative institution in Michigan. Hibbs seemingly did not trust Mizzou to fulfill his terms and thus structured the gift so that an ideologically sympathetic college would have an incentive to hold the Mizzou accountable.

Hibbs was apparently right to worry. Hillsdale is now suing Mizzou, and alleges that the university willfully misspent the funds on faculty members who have nothing to do with either von Mises or Austrian economics.

"MU has never appointed a dedicated and articulate disciple of the Ludwig von Mises (Austrian) School of Economics to a Chair or Distinguished Professorship funded by Mr. Hibbs' gift," wrote Hillsdale's attorneys in the lawsuit. "Instead, MU provided millions of dollars over 15 years to individuals who were not Austrian economists."

Ironically, Hillsdale is being represented in this lawsuit by Jay Nixon, a former Democratic governor of Missouri. Four of the current curators of Mizzou's governing board were previously appointed by Nixon.

The professors currently funded by Hibbs' donation are Dan Turban, Karen Schnatterly, Rhonda Reger and Lisa Scheer, according to The Columbia Daily Tribune. In 2018, each of them signed a statement attesting that "consistent with the stipulation in the will of Mr. Hibbs, each of us believes we are 'a dedicated and articulate disciple of the free and open market economy (the Ludwig von Mises Austrian School of Economics).'"

But Phil Magness, an economic historian and senior research fellow at the American Institute for Economic Research, disputes that any of the above individuals are followers of von Mises.

"None of the named faculty appear to have any meaningful research in or connection to Austrian economics," Magness tells Reason. "It looks like Missouri accepted the cash, then failed to honor the terms of the donor."

I reached out to Turban, Schnatterly, Reger, and Scheer for comment, asking whether they could point me to any research they have done or coursework they've assigned, that references von Mises. Only Schnatterly responded: She directed me to speak with Mizzou's director of media relations, Christian Basi, instead.

In an email, Basi said my line of inquiry was not warranted.

"I've been forwarded a couple of your requests to the professors asking about classes they taught or studies they've completed," he said. "The gift agreement does not place any restrictions on the curriculum nor the research work of professors holding those appointments. It only asks about their belief in that particular economic model."

I replied that if these academics were indeed "dedicated disciples" of von Mises and Austrian economics, then I would expect it to be evident in their work or at least hinted at.

"I understand that perspective, but it is not a requirement of the gift," said Basi.

That strikes me as splitting hairs. Quite literally, the requirement was that Mizzou spend the money on "dedicated disciples" of von Mises and the Austrian school. The individuals who benefited from the gift do not appear to fit that definition at all, regardless of what they claimed in their signed statement.

We will see how the legal battle unfolds, but the just outcome would be Mizzou writing Hillsdale a check for $5 million.

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  1. You know who else was Austrian?

    1. Crocodile Dundee?

    2. Kurt Waldheim?

    3. Ernst Blofeld?

      Hans und Franz?

    4. Arnold Swantzfluffer.

    5. Bruno?

    6. The Grinch?

    7. Silvia Hackl?

    8. The Von Trapps?

    9. Rain Man?

    10. Kurt Gödel?

    11. Arnold Schwarzenegger?

  2. “I understand that perspective, but it is not a requirement of the gift,” said Basi.

    That strikes me as splitting hairs.

    To be sure.

    1. Dude should have just given the 5 mil to the Mises Institute. Though I am not sure what they would do with the money.

      1. Mises Institute doesn’t much care for Mises. They’re all about Rothbard. Just saying.

        1. I would say that’s true, but misleading. They would probably say that Mises was foundational and therefore vital. Nut that Rothbard took the ideas to a next step… and as such would leave him as the more applicable place to study for current understanding while Mises would serve more as a primer or historical learning. Both important, just one gets more “air time.”

      2. They would have established a war crimes tribunal to try Abraham Lincoln.

    2. “I understand that perspective, but it is not a requirement of the gift,” said Basi.

      Really!? $5 million on the line and that’s the argument they want to go with? I hope they get hit with interest, penalties, and court costs.

  3. Wait, Robby wrote an article that mentioned Von Mises? The wonder!

    1. Actually, it’s kind of an article on the lack of Von Mises so his streak still holds.

  4. Maybe doofus could have left the money, I don’t know, to the VON MISES INSTITUTE??

    1. How would that get Austrian economists into faculty positions at mainstream universities?

      1. Scholarships to economics students that want to study Austrian economics?

        1. Awesome, and then where would those students go to be taught Austrian economics?

          As opposed to be taught arguments against Austrian economics?

      2. Mises is loosely attached to Auburn University, the GOAT

  5. Missouri should have declined the donation. Donor wishes should be respected (or the donation rejected). Five million wouldn’t make the University of Missouri a weak institution (or Hillsdale College a strong one).

    1. Who hijacked Kirkland’s account and put up a cogent comment on something?

      That is not funny.

      1. He never mentions where he went to school, either.

      2. Last such impersonator had some minor change in punctuation or something.

        1. AK claimed it was an impersonator. I am skeptical. AK has used sock puppets in the past to mock the other side by arguing with himself using a parody of the other side’s arguments.

          1. The sole other name I have used was Artie Ray Lee Wayne Jim-Bob Kirkland. I figured even the most dense clinger would be able to recognize that Artie Ray’s conservative stylings were mine. It no longer matters much because the Volokh Conspiracy’s Board Of Right-Wing Censorship banned Artie Ray for the offense of mocking conservatives.

            Other than that, great comment, you bigoted rube.

            1. Shove an M80 up your ass and light it, retard.

      3. Not just cogent, but on topic as well. Quick, someone check the temperature in hell.

      4. It seems to happen occasionally. Usually closely followed by his usual idiocy.

        1. Yes, occasionally, his cat gets a hold of the keyboard.

  6. Put vague language in your will and people will take advantage. Hillsdale will lose the case.

    1. Being articulate would, at minimum, compel you to articulate.

      1. The term “articulate” is racist, just ask Biden.

    2. I haven’t seen the actual terms, but I would expect someone with $5 million to give away and specific ideas on how the money is to be used to have it written fairly tightly. Have you seen the actual language?

  7. the just outcome would be Mizzou writing Hillsdale a check for $5 million

    More, since there is the matter of the time value of money.

    Btw, Robby, it isn’t necessary to write “von Mises.” Just “Mises” is adequate.

  8. Moral of the story, boys and girls.
    Give it away before you die. Not only does that make sure your wishes are honored, you might get invited to a faculty luncheon.

    1. Wouldn’t make a difference for bequests like this. It’s taken 17 years for Mizzou to screw it up to the point of being sued. How long would he have had to monitor them to make sure they got it right, and what would have prevented them from screwing it up as soon as he died?

    2. Cooked as what?

    3. “you might get invited to a faculty luncheon.”

      Screw that, you could go Back to School like Rodney Dangerfield.

  9. I need some ideological muscle over here.

  10. likely Mizzou used the dough to make safe spaces. tuck the Figers.

  11. So, they think that they can say some ‘magic words’ and they’ve fulfilled their end of the deal.

    It reminds me of those ‘contracts’ we used to have to sign in high school if we wanted to participate in athletics, stating our intention not to drink alcohol, smoke tobacco, or do any drugs. Yeah, those were always honored . . .

    Side note – I know Mizzou has a history of hiring some fairly stupid individuals (see: Melissa Click) but why on Earth is their Director of Media Relations even talking to a reporter about this subject during an ongoing lawsuit? Did he graduate from Mizzou or something?

    Signed,
    A Missouri Resident
    (But Kansas Alumnus)

    1. The money was probably redirected to the athletic department to attempt to get them out of last place in every sport in the SEC.

      Postseason bans for football, baseball and softball don’t make it any easier. The NCAA found a tutor violated NCAA ethical conduct, academic misconduct and academic extra benefits rules by completing coursework for 12 student-athletes.

      1. The amusing thing is that MU actually reported the violations themselves.

  12. Could Mizzou have sent someone over to Vienna to recruit an Austrian (Marxist) economist?

  13. Those of us that lean (or are all in) Libertarian find much to like about Austrian economics – but I submit it’s more of a political ideology than a concise economic school of thought. Austrian economics depends too much on the myth of the loanable funds theory, which really does not fit well in a fiat currency monetary system. Put another way, it misunderstands endogenous money. Austrian economics believes the government controls the money supply – which in our system – is just not true. None of this is to say that those Mizzou professors shouldn’t teach a course on Austrian economics. Like all schools of economic thought, there are some parts that make sense and others that don’t.

    1. “it’s more of a political ideology than a concise economic school of thought”

      It’s all group psychology. Using the word ‘concise’ implies a differential level of compression that simply cannot be sustained.

    2. I think Austrian economics suggests a certain political arrangement if prosperity is desirable (but the other schools suggest a particular arrangement as well). That doesn’t make it a political ideology.

      1. You make a good point – economic schools of thought do suggest certain political arrangements. Austrian economic school die-hards are vehemently anti-government and pro-market – and those are not necessarily bad things. It’s when the Austrian economics people try to deal with the current operational realities of modern monetary systems that they get off track sometimes. They seem to misunderstand endogenous money and cling to the myth of the loanable funds theory and the money multiplier, which is also outdated thinking (and wrong). That’s one reason why Austrians were so wrong about the impact of QE – they were sure it would lead to hyperinflation because they thought that the banks would lend all those excess reserves. Banks NEVER lend reserves (except to other banks).

    3. Missouri should hire you with their pilfered $5M, blondy. You seem to understand this voodoo economics stuff to confuse an average lay person, i.e. me.

  14. Free market professors on American re-education camps?
    Never!
    Hey, hey.
    Ho, ho.
    Free market professors have to go!
    No free speech.
    No due process.
    No brains.
    American higher education at its finest.

    1. You prefer the hundreds of conservative-controlled campuses, which are censorship-shackled, science-disdaining, nonsense-teaching, dogma-enforcing, discriminatory, fourth-tier (or unranked) rube factories?

      1. Please kill yourself asap you fucking cunt.

  15. Demanding they teach Austrian economics is as silly as demanding they teach astrology or phrenology or biology or any of those old “sciences” that are now laughably archaic nonsense.

  16. Like most lawsuits this case will be decided in jury selection.

  17. This sort of thing is the only reason Austrian economics survives in academia. It’s the only reason it’s trickled down onto people like you. And it’s hardly worth noting the irony that a philosophy in which supply and demand are central objects of value can only survive by subsidy and would be on the shit heap of history if it had to actually compete in the marketplace of ideas.
    You’ll note who underwrites this very website.

    1. As if you know a single thing about Austrian economics outside a quick skim of wikipedia. You’re the most ignorant person on this site, bar none.

      And, again with the “you people” crap. You sure do love to lump people into groups, don’t you?

      1. Triggered?

      2. Baby chem jeff is offended at your assertion.

    2. You don’t know jack shit about Austrian economics you retarded hick.

      1. It is without question that I know more than you do, because I know enough to reject it as laughable horseshit, while you don’t.

        1. Keep trying you retarded rube. But do enlighten us with regard to your interpretations of Human Action and Man, Economy, and State, both of which you’ve read of course. Please share and maybe impress us.

  18. If in 2002 I purchased an item for $5,000,000.00, then in 2019 that same item would cost $7,119,038.35.
    Cumulative rate of inflation: 42.4%

    Pony up, Miss Zoo. Sherlock Hibbs gets what he paid for.
    Legal fees too, Christian Basi, you deliberate point-misser!

  19. I actually don’t think universities should accept donations conditioned on promoting certain viewpoints – as a general rule, for secular institutions, the trustees ought to be deciding for themselves, free from monetary temptation, what values the institution should promote.

    If they don’t trouble to define their values, then the temptation to sell out will be greater – why resist selling out if what they’re selling isn’t worth much in the first place – they should be grateful for every dollar they get!

    In this specific case, the university’s values, I suspect, are the opposite of Misean, but even if they got a grant to promote advanced wokeness and socialism, they should still turn it down because of the principle.

    (giggles uncontrollably at the idea of educational institutions having principles)

    1. Basically, it’s like campaign finance – giving money to a Senator *in exchange* for her changing her position on a subject is wrong, but giving money to a Senator who has already independently developed a position similar to the donor’s…that’s OK.

  20. If you need to bribe a university to hire some profs of a particular viewpoint, you should know that you can’t trust them to pick actual adherents of that viewpoint.

    The smart thing would have been to specify that Mizzou use the money to hire faculty approved of by Hillsdale, and that in the event they couldn’t agree on anyone, Hillsdale got to keep the money.

    Worst case is that Hillsdale becomes unreasonable to get the money, but the donor obviously thought Hillsdale getting the money wasn’t that bad, so it’s not an awful worst case.

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