2019 March 2019

A Back Alley, CAFE

On November 2, 2018, at the Davidson-Gundy Alumni Center, Dr. Hasan Pirkul, Dean of the Naveen Jindal School of Management, gave remarks to the gathered student and faculty attendees of the CAFÉ Fall Seminar: “Freedom and Prosperity in the U.S. and the World: How Are We Doing?” Dr. Pirkul spoke of the need to “protect our system” — the system of free-market capitalist enterprise — and praised the event and its hosts as a necessary reaction to rhetoric propagating from politicians such as Bernie Sanders. He expressed hope that “our students will become passionate defenders of the free-market system.” Amidst a packed itinerary including talks such as “How Freedom Solves People’s Problems”, “The Not-So-Complicated Truth About Freedom and Inequality”, and “Can Obamacare Be Reformed? Is ‘Medicare For All’ the Answer?”, it’s easy to see why he felt so optimistic.

Under normal circumstances, such blatant statements from a school dean for a specific ideological outcome for students would raise some eyebrows. Yet these goals squarely align with the mission of JSOM’s new fellowship program, CAFÉ: the Colloquium for the Advancement of Free-Enterprise Education. The CAFÉ fellowship offers undergraduate students and graduate students up to $5,000 and $10,000, respectively, in exchange for a yearlong commitment to specific coursework, reading groups, club membership, and attendance at conferences, such as LibertyCon, with the goal of “advancing an accurate and objective understanding of free-enterprise principles.” However, CAFÉ functions more as a breeding incubator for future ideological champions of libertarian economic principles.

Evidence of this comes first from the program’s origins. CAFÉ began with an $840,000 donation from two main sources: an anonymous alumni donor, and the Charles Koch Foundation. According to CAFÉ’s director, Dr. Lewin, the alumni approached JSOM to found CAFÉ with the ostensible goal of improving JSOM graduates’ historical knowledge and critical thinking skills surrounding economics. Once the grounds for the program were established, the alumni reached out to the Charles Koch Foundation for extra funding due to its history of funding similar programs. This history warrants critical examination.

While citations to Koch Brothers funding as reason to take a second look at an organization is cliché at this point, the Koch Brothers have been wielding influence and propping up organizations such as CAFÉ at universities across the country for decades. Recently, the Center for Public Integrity documented the rise in yearly Koch Brother donations at college campuses: $12.7 million in 2012 to $33 million in 2015.

The goal of such massive donations is rather simple. In the late 1970s, Charles Koch and Richard Fink, the former vice-president of Koch Industries, drafted the “Structure of Social Change,” a plan to put their libertarian philosophy into action. The plan involves transforming university economics education to extol the virtues of free-market capitalism. This would reform the country in a variety of ways: students could become political or academic leaders drafting policy proposals, tenured academics could publish papers that think tanks could use to push policy, and other students could become activists to get these policies passed. Four decades later, this plan has not changed; the Center for Public Integrity obtained audio recordings in 2014 of Koch lieutenant Kevin Gentry describing how university donations create a “talent pipeline” of libertarian activists that can influence state policy.

A comprehensive history of Koch university activity would require its own article, but there are relevant case studies. Many of the grant statements for schools receiving over $1 million require that departments that support “research into the…impact and appreciation of economic freedom” to promote “social progress, human well-being, individual freedom, opportunity, and prosperity” — basically, free-market research that would lead to a predetermined outcome of benefiting humanity. At some schools, like Florida State University, the Charles Koch Foundation’s donations gave it control and veto power over curriculum and faculty hiring. Closer to home, Texas Tech has recently come under fire for their Free Market Institute, set up in 2013 with over $11 million in donations from the Charles Koch Foundation, Koch affiliates, and political friends. Naveena Sadasivam and Jordan Sigler of The Texas Observer reported donor efforts to get the Free Market Institute faculty to gather survey data regarding the effectiveness of the free market curricula on changing students’ minds so that “pro-freedom” policy makers could change their strategies. While rich donors creating institutes in the university system are commonplace, few are so targeted and systematic as the Charles Koch Foundation’s cultivation of free market cheerleaders.

Of course, this is not to imply that anything quite so insidious is happening at UTD. The alumni and JSOM invited the Koch Foundation, and the donation of $390,000 is paltry compared to the amount given in its most flagrant attempts at seizing control of universities’ economics education. But that Koch money would not be present if CAFÉ was not advancing the Foundation’s educational and political goals.

CAFÉ’s claim to present objective and accurate information about free markets is also complicated by the institutional involvement of its leadership with libertarian organizations, or like-minded activity. While engagement with a political philosophy that extols the virtues of free market capitalism makes sense for those engaged in their academic study, a lack of ideological diversity raises questions regarding the ideology fellowship participants are expected to graduate with.

CAFÉ is headed by Dr. Peter Lewin, its Director; Dr. Stan Liebowitz, its Co-Director; and Pamela Villarreal, its Associate Director. The three have published a great deal of market-defending op-eds in a variety of publications, highlighted by CAFÉ’s News section. Dr. Lewin has written about the need to rehabilitate the use of the word “capitalism” into something positive for the Foundation for Economic Education and the benefits of price gouging during natural disasters for the Dallas Morning News (in conjunction with Ms. Villarreal). Dr. Liebowitz has argued against net neutrality for Inside Sources. Ms. Villarreal discussed plastic bag bans, the minimum wage, and Social Security with the Heartland Institute and opposed Bernie Sanders’s job guarantee plan in the Daily Caller. While academic research and opining on the findings of that research often go hand-in-hand, the publication of these op-eds as CAFÉ’s “News” seems to indicate that the program identifies itself with the values endorsed by such pieces.

Dr. Liebowitz is an adjunct scholar of the Cato Institute (formerly the original Charles Koch Foundation), the world’s most famous and influential libertarian think tank. The Cato Institute consistently argues for and publishes policy papers for ending government regulation, privatizing government agencies, and opposing unions, among other libertarian policy hallmarks. CAFÉ’s Associate Director, Pamela Villarreal, has a decade-long history of doing policy work for a free-market research organization and is a faculty advisor for the UTD chapter of YAL, Young Americans for Liberty. The UTD chapter hosts meetings, discussion groups, guest speakers, and activities on and off campus to foster and further libertarian principles.

Dr. Lewin, on the other hand, spent the majority of the 1970s studying at and receiving his Master’s and Ph.D. from the University of Chicago economics department. This was during the time the school was promoting “Chicago school” economics and the final years of famed Nobel economist Milton Friedman’s professorship at the university. The Chicago school of thought is known for its aggressive promotion of free markets. Its department is famous for churning out Nobel prizes, greatly reforming economics, and producing economists that wielded wide influence in places such as the Reagan administration, the Thatcher administration, the International Monetary Fund, The World Bank, and multinational firms. Dr. Lewin’s receipt of degrees from this university program is exceedingly praiseworthy for his credentials and expertise, but that educational background is steeped in an economic theory designed to extol the virtues of free, unfettered market capitalism.

None of these academic and professional backgrounds are inherent issues. As Dr. Lewin informed me in conversation, CAFÉ is committed to being strictly an academic organization. He claimed that every academic program has political and value implications, and the implications within CAFÉ are an appreciation for how free enterprise has played a part in achieving unprecedented prosperity. But this gets to the heart of the difficulty of an organization such as CAFÉ ever advancing an “objective” understanding of free-market principles. By selecting what is relevant to study and extol, CAFÉ creates the ideological framework and filter through which its students and conference attendees are interacting with free-market ideas, gearing participants toward a specific political philosophy. Studies of the historical roles of free markets, however, need not always be coupled with praise.

Firstly, the outcomes one prioritizes as “good” are quite determinative of what warrants praise. An example of this in the context of the historical role of free markets can be found, actually, in what some Chicago school graduates, the “Chicago Boys,” were up to during Dr. Lewin’s time at the university. From one perspective, the “Chicago Boys,” graduates of an initiative to bring Chilean students to learn Chicago school thought, were busy creating the “Miracle of Chile,” instituting aggressive economic liberalization, privatization, and social program cuts. For some scholars, these initiatives saved the nation from the failures of its socialist and Marxist policies, paving the way for Chile’s GDP to skyrocket from $9 billion in 1970 to $260 billion in 2014.

To other scholars, the “Miracle of Chile” represents the unfreedom associated with the introduction of aggressive free-market economics in resistant countries. It involved targeted sanctions and boycotts from the Nixon administration, the cooperation of the Chicago Boys with virulent dictator Augusto Pinochet to institute their policies amidst the vulnerability left by the murder of leftist and impoverished dissidents, the advice of Milton Friedman to Pinochet to institute these economic reforms amidst the shock of his political genocide and austerity measures, and the creation of a nation with gutted social programs and much greater economic inequality. The role of free-market policies in increasing Chile’s GDP versus other factors is also debatable.

One’s view of the free-market in this case depends on one’s value systems and priorities — for example, GDP versus inequality as an economic measure, and the relevance of the way free market policies are implemented. This is up to the individual to decide, but the political and philosophical associations of CAFÉ indicate that it would push students toward an intellectual path of free market defense.

Ironically, this point could be heard by CAFÉ students when they attended LibertyCon 2018. One of the few oppositional voices president, Elizabeth Bruenig of the Washington Post, debated the merits of socialism. In her debate, Ms. Bruenig argued that “that the average person under capitalism does not really control much of his or her own economic activity, much less his or her own destiny,” based on capitalism’s predetermination of needs and wants for consumers, its fostering of addictions, and its alienation of individuals from the reasons for their own work, among other examples. Here, one’s definition of “freedom,” agency, and control are quite determinative of one’s designation of a system as virtuous. When a system, such as free-market capitalism, and its outcomes are preemptively determined to be “good” and praiseworthy by a fellowship such as CAFÉ, its capacity to approach an issue with academic objectivity is compromised.

There is ample reason for organizations such as CAFÉ to academically focus on free markets. For such an organization, the line between academic study and the advancement of economic ideology is thin, and hard to define. But as it stands, CAFÉ is inoculated with donor money and organizational affiliations encouraging it to advocate for how the libertarian economic model makes the world a better place. At a time where universities are receiving constant criticism from the U.S. presidential administration, the Texas state government, and conservative talking heads that universities are not places of academic inquiry but rather training grounds for the propagation of leftist ideas, the opposite, on a smaller scale, is currently taking place at UTD. Needless to say, if a similar program were established at UTD advancing defense of, say, socialist economic principles, UTD would be a prime feature on Fox News before the program got off the ground. When the dean of a school as powerful as JSOM is extolling the benefits of a program opposing political trends and influencing the political beliefs of its students, alarms should go off. UTD is a public university, and students should question its academic resources being used for the implied purpose of training future leaders to advance a specific political cause. Free market principles should be studied, and the findings should be debated in an academic environment, but UTD students should not be groomed as pawns, in any program, to carry out its donors’ political aims.

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