Capitalisn’t: Universities and Politics—Should They Mix?

Hanna Holborn Gray: I don’t think we teach our own students very much about universities. We teach them about the government of outer Mongolia, but we don’t teach them anything about how universities work or why.

Bethany: I’m Bethany McLean.

Phil Donahue: Did you ever have a moment of doubt about capitalism and whether greed’s a good idea?

Luigi: And I’m Luigi Zingales.

Bernie Sanders: We have socialism for the very rich, rugged individualism for the poor.

Bethany: And this is Capitalisn’t, a podcast about what is working in capitalism.

Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed?

Luigi: And, most importantly, what isn’t.

Warren Buffett: We ought to do better by the people that get left behind. I don’t think we should kill the capitalist system in the process.

Luigi: One of the great successes of capitalism in America is universities. Not only did they educate a talented workforce, but they also produced the technology that allowed America to triumph in World War II and dominate the world economy until now.

Bethany: Now, not only is America facing a host of economic challenges and technological challenge from China, but our universities have lost some of their luster. They are expensive, bloated and subsidized, and controversial.

Project 2025, the blueprint of the Heritage Foundation for the incoming Trump administration, plans large cuts to university subsidies. A big battle is looming on the role and future of American universities. That’s why we think the time has come for our podcast to discuss university governance and the future of American universities.

Luigi: To foresee the future, however, we have to understand the past. And to provide this perspective, there is no better person than Hanna Gray, emerita professor of history at the University of Chicago, author of several books on the goals of the American university, but most importantly, president of the University of Chicago from 1978 to 1993.

Yes, you heard correctly, from 1978 to 1993. She’s now 93 years old but as sharp as a tack. By the way, she was awarded the Presidential Medal of Freedom, a fact she does not mention in her memoir, An Academic Life, which is even more impressive because most academics are egocentric.

Bethany: I love something she said in an interview about her last book. She wrote about the creation of modern universities: “All this rested on a faith, pervasive in the post-war world, in the potential for education to create a better world, and to produce both social mobility and a meritocratic society that would realize the true promise of democracy.” I think it sums up why this issue of the future of universities is so important to Capitalisn’t.

Before we bring Hanna in, we need to update our listeners on some of the more specific issues we’re going to raise with her. In particular, there’s something known as the Kalven Report, which was drafted by a faculty committee at the University of Chicago under the chairmanship of Harry Kalven Jr., who was a University of Chicago Law faculty member, to elaborate, quote, “a statement on the university’s role in political and social action.”

The report states clearly that, again, quote: “The mission of the university is the discovery, improvement, and dissemination of knowledge. Its domain of inquiry and scrutiny includes all aspects and all values of society. A university faithful to its mission will provide enduring challenges to social values, policies, practices, and institutions. By design and by effect, it is the institution which creates discontent with the existing social arrangements and proposes new ones. In brief, a good university, like Socrates, will be upsetting.”

Luigi: That’s the reason why my mother was very sad when she realized I found my place at the University of Chicago, because she knows that I’m a very upsetting person. Here, I’m almost normal.

Jokes aside, the committee states that the university is “a community but only for the limited, albeit great, purposes of teaching and research. It’s not a club, it’s not a trade association, it’s not a lobby. Since the university is a community only for those limited and distinctive purposes, it is a community which cannot take collective action on the issues of the day without endangering the condition for its existence and effectiveness.

“There is no mechanism by which it can reach a collective position without inhibiting the full freedom of dissent on which it thrives. It cannot insist that all its members favor a given view or social policy; if it takes collective action, therefore, it does so at the price of censoring any minority who do not agree with the view adopted. In brief, it is a community which cannot resort to a majority vote to reach positions on public issues.”

From this premise, the Kalven Report derives the principle of neutrality, which has been adopted by the University of Chicago since 1967, and now, other universities are adopting it. Even Harvard tried to come up with something similar.

The idea is this, and I quote: “The neutrality of the university as an institution arises then not from a lack of courage nor out of indifference and insensitivity. It arises out of respect for free inquiry and the obligation to cherish a diversity of viewpoints. This neutrality as an institution has its complement in the fullest freedom for its faculty and students as individuals to participate in political action and social protest. It finds its complement, too, in the obligation of the university to provide a forum for the most searching and candid discussion of public issues.”

Bethany: As you read it, Luigi, I couldn’t help thinking how short of that many of our universities fall. But with this important premise, let’s now bring in President Gray.

Let’s start with a fun question. During your tenure as president, Queen Elizabeth visited Chicago, and there was a discussion about giving her an honorary degree. The lore is that you asked, “What has she published?” and you decided not to give her the honorary degree. Is that true, or is it apocryphal?

Hanna Holborn Gray: Well, it is an apocryphal story about me, but it is a true story about Edward Levi, because Edward Levi, before he became provost and then president, was the dean of the law school, and he said to the law faculty, because it’s the faculty that recommends people for honorary degrees . . . He suggested they might think of Queen Elizabeth, and they said, “What has she published?” It’s a very good Chicago story.

Luigi: I know, but I think most of our listeners probably don’t know, to what extent is Chicago different in this dimension? Because a lot of universities give honorary degrees to famous people, but Chicago doesn’t. Why?

Hanna Holborn Gray: We give them only to scholars. They’re often not recognized by many of the parents who come and who expect to find, I don’t know, Taylor Swift or someone like that giving the speech, but we’re just sort of hopelessly academic.

There is a story of my time when President Clinton’s office called and said that he would like to come to Chicago and give the commencement address, and we said, “Sorry, but we only have scholars doing that.” Well, they were quite upset, because they thought this was a great privilege we were about to receive.

Then they asked, rather petulantly, “Well, could he maybe say a few words?” And we said, well, we thought we could arrange that, so there was a faculty speaker, and then President Clinton gave a few remarks, after which he departed immediately for Wrigley Field. I think that was why he wanted to come here.

Bethany: You’ve written a lot about American universities’ birth and their changing role over time. What was the role at inception? What do you think it’s been in the 20th century, and what is it now?

You said in an interview you gave that the establishment of universities “rested on a faith, pervasive in the post-war world, in the potential for education to create a better world, and to produce both social mobility and a meritocratic society that would realize the true promise of democracy.” Do you think that’s still where we are?

Hanna Holborn Gray: I think that was the view that was taken about universities, the support for universities, and the expansion of higher education with a great deal of federal support, in a post-Second World War Europe. What we are seeing now are the last flickers of that faith.

When you look at the current public criticism, when you see the continuing attack, actually, on the privileges of American universities, when you see the questioning of meritocracy, and also because the world has not necessarily been improved and for all kinds of reasons, people began to doubt whether universities were doing their job.

Now, I should say one thing, and that is that universities became what they are because they became research universities. People tend to talk about them as though they were only collegiate institutions, so they’re really dealing with their critique, pretty much, of undergraduate education, of the behavior of students, of the cost of tuition, about what they think of as the kind of luxurious and entitled life that students are given in these universities.

They see faculty, who they think are, first of all, not sufficiently diverse in their outlook about the world, and secondly, who are not teaching the students what they need to learn, which is how to get a job and how to do a job well.

The reaction against the view that that is the best way to improve and to sustain a culture in America of people who will become leaders, people who will become significant in their fields and their walks of life, whatever they might do—all that is being questioned. It’s not going to end forever, and the collegiate institutions of our major universities are doing well, actually, I think.

But on the other hand, what people forget is that these are institutions that have graduate faculties, that are training the teachers of the future, that are training the people who are going to do the important research of the future. People whose scholarship and scientific findings are going to make a tremendous difference in the world.

That aspect of what a real university is and does tends to be overlooked in the national discussion—if you can call it a discussion—of higher education today, so higher education is being talked about essentially as collegiate education.

Bethany: You talked a little bit about the role that government played in creating American higher education. What do you think is the appropriate role that government should play today in higher education?

Hanna Holborn Gray: Well, when Luigi wrote me a note, he indicated that his interest was in private universities, and I would question whether there really is such a thing any longer. I mean, there is, but they’re not exactly private universities, because that marriage between government and the universities was, of course, the essential other feature of the post-Second World War era.

The government during the war had begun investing heavily in university research for military purposes, and that relationship between government and universities grew out of that enormously expanded role. After the war, with the creation of the National Science Foundation, National Institutes of Health . . . I guess it already existed, but they were hugely expanded at that point.

The understanding that great science needed great resources and that no private foundation, for example, could do more than provide a kind of drop in the bucket—an important drop in the bucket, but nonetheless, that the very large resources needed for first-rate science could only be gathered by the federal government. So, the whole system of grants and all the rest came into being.

Similarly, there was an investment in student financial aid, which was justified at the time, not by some great ideal, but essentially because you had to get these things through Congress, among other things, by interest of national security, and the Cold War fortified that, the notion that the Soviets might be ahead of us.

Those things brought with them not only new opportunities but new problems. The introduction of, or the attempted introduction of, loyalty oaths. They produced issues about openness of research, because if contracts existed that were doing classified work, people would argue—we would argue, we did argue—that classified research is inconsistent with the goals of a university, which is to help to disseminate and to collaborate in the development of knowledge.

Also, the perception that universities were becoming the instruments of rather than independent collaborators of government, and the government’s power of the purse has steadily expanded. Any university that receives federal funds, as you know, is therefore subject to all kinds of federal policies.

Almost every institution in this country, of course, receives federal funds either directly, or because students are bringing Pell grants, and so on and so forth, which they award to the college to give to the students. It expanded further with the creation of a Department of Education. Our system of higher education, after all, had been characterized by not having a central ministry of education.

While the Department of Education is not meant to be a ministry of education, it has, to some degree inevitably, tended more and more in the direction of wanting to have some say about curriculum, about admissions, about the conditions of life within a university. Some of them very important, some of them none of their damn business, if I may say so.

That means that there is increasingly a kind of encroachment of government authority vis-à-vis universities and a big expansion of the time that any university has to devote to dealing with those issues.

It’s a mixed picture, but what it does mean is that private universities are, indeed, increasingly affected—sometimes, in my view, very legitimately so, and sometimes, in my view, not at all so—by policies that emerge from government agencies and judgments and decisions made by government bureaucrats.

Luigi: American universities, particularly the private universities, unlike the European institutions, tend to be nondemocratic institutions. When you were president, you were not appointed by the students, by the faculty. You were appointed by a board of trustees. To what extent is this governance system functional to the purpose of the universities, and to what extent is it dysfunctional?

Hanna Holborn Gray: Well, I think that the private university, with its board of trustees whose fiduciary responsibilities should be looking toward the broad interests of that university’s mission, is unique, really, to our country. I think that what it has created is a system of higher education, which, in part through its decentralization, has done better than a centralized system would.

We have so many different kinds of universities, universities that have somewhat different emphases in what they do, whether it’s an MIT or Caltech, first-rate universities. They tend to be, of course, in competition with one another, and that competition is, again, I think, a stimulus to innovation. I think it’s a stimulus to caring about the quality of the product, so to speak.

On the other hand, the fact that a private university is in that kind of competition is much more consumer-oriented, and that consumer orientation is not always a good thing, in my opinion, as that competition becomes stiffer, and it has become stiffer in our system. Why? Because there are fewer 18-year-olds, and there are fewer babies being born that are going to be 18-year-olds 18 years from now.

We’re looking at a really quite drastic demographic decline, so we’re also looking at some very unsavory forms of competition, and that leads to a kind of consumerism and then to a greater disregard on the part of the public of institutions. They read about sushi bars and climbing walls and all these wonderful things that students are meant to get, and so on and so forth. The families want that kind of nice country-club life for their students.

Universities should not be spending their time giving a country-club life to their students. If, in fact, they want to make them ready for the real world, they shouldn’t be as luxurious as they are, because the real world is not that luxurious, particularly for new graduates.

However, having said that, there is at present, because of the heightened competition for students and resources. And you see every day some institution you’ve never even heard of closing down, as well as some that you have heard of. It says that higher education is overbuilt and overstretched. There’s too much of it, too many institutions.

It’s also not a bad thing that the question has arisen, should everyone go to college? Of course, we like to think they should. It’s going to be so good for them, but we also know that, of course, people should make their choices that make sense to them at the time that they are confronted with those. I think that what we’re going to see is fewer people choosing to go to college, in part for financial and vocational reasons, who will later come back and who will swell the ranks of adult education.

But in the meantime, there’s also a significantly enlarging chasm between the haves and the have-nots, and the richer universities and so-called elite universities feel that they’re not really threatened. They boast about the number of applications they get every year, as though the quality of their institution were somehow to be measured by getting 3,000 more applications than the one next door, even though they probably shouldn’t have even taken some of those applications.

That’s a very unsavory form of competition, I think, because it doesn’t help students to know what is going to be best for them individually, and because it makes numbers take the place of substantive qualities and qualifications. There is something common to all universities that is essential: academic freedom is essential, freedom of expression. Intellectual liberty is essential.

Luigi: You mentioned the freedom of expression as a fundamental value of all universities, but particularly the University of Chicago, and, of course, Chicago is also famous for its principle of academic neutrality. During some part of your administration, you had to deal with the movement for South African divestment.

If I remember correctly. I think that you rejected the idea of divestment on the basis of neutrality, but you accepted the idea of investing in companies that followed the so-called Sullivan Principles, which ensured, basically, minimum standards of treatment of the Black population.

Of course, I don’t dispute whether this was a good decision, but how do you reconcile that with the principle of institutional neutrality that is behind the so-called Kalven Report?

Hanna Holborn Gray: Well, I think on the issue of investment, obviously, an endowment is given for certain purposes, and those purposes have to do with education, and we are bound by that to use those funds for the purposes for which they were given, which are not the purposes of changing the world and all the rest of it.

On the other hand, it is not necessary for a university to invest in a bad company, and indeed, over time, an investment is unlikely to be a very successful one. In fact, if you disinvest, somebody else will buy it, and maybe they’ll do well with it. Who knows? I mean, you’re not really making any change in the conditions of that universe.

But the Kalven Report does say that there are certain circumstances . . . George Stigler disagreed with it, but that there are certain circumstances that are so bad that you don’t accept them. Would you have invested in Krupp before America went into the world wars, for example? Would you have invested in an industrial German company that used slave labor? That is a big question, I think.

You can make a decision not to because you don’t think over time a company like that is, in fact, going to do all that well, or you can invest in it because it is a bad company, but you can make a little difference in your vote as a shareholder, at least, to express an opinion or to have somebody listen to you.

I do believe that an investment committee . . . because it isn’t the university that invests. It’s basically some investment committee of the trustees that invests. I think those are appropriate judgments to be made. I think they differ from the judgments we might make in our own individual decisions, where we can do whatever we personally think, right?

But I don’t think one should invest in companies that do things so appalling that you don’t want to have your university’s name associated with it. I realize the nature of your question, but I do think that the sense in which there were American international corporations that were, to some degree, subversive elements in that South African world because they did follow policies that were not the policies of the South African government, that did treat its employees equally, and so on . . . to retain investments in companies that were, in effect, somehow subverting, and that had a big impact, I believe, on the business classes in South Africa.

You could say, “Well, people might have done that without it in mind.” I don’t think that an investment committee, however, has any business doing more than what its mission is, which is to think of the conditions of the endowment itself, what its purpose is, and to think that its duty has to do with investing for the ongoing future of the institution for which they have responsibility and for the fulfillment of its purposes, which are educational. Looking at different investments in the light of that priority or those two priorities is what they need to do.

I’m less interested in calling that neutral than I am calling it doing what they are there to do.

Luigi: I don’t know if you are familiar, but there is a group that created the Holy Land Principles that are basically a copy of the Sullivan Principles applied to Israel and the Palestinian territories. I don’t think they are particularly popular these days, but would you be in favor of applying a screening to the University of Chicago endowment in which you say you should only invest in companies that follow these Holy Land principles—I don’t know all the details, but assuming they are identical to the Sullivan Principles?

Hanna Holborn Gray: No, I wouldn’t.

Luigi: And why?

Hanna Holborn Gray: In my view, the situation in Israel, however I personally think about it . . . and you are right, the discrimination that applies to Palestinians and their lives in so many ways is something that one personally deplores and so on.

But we are talking about, in the case of South Africa, a country whose very constitution required a form of treating Black people as nonpeople. However badly Palestinians have been treated in Israel, it is also the case that Israelis have confronted terrorism, have confronted . . . After all, October 7 was an awful event, and one cannot forget that, either. It’s a much more complicated situation, I think.

Luigi: As a president, you lived through a great transformation of the role of universities. Correct me if I’m wrong, but when you started, the return on the endowment played a relatively small role in the university budget. Now, it is huge. Hospitals were kind of smaller appendices. Now, they represent a third of the revenues. And research used to be done entirely in the public interest, and with the passage of the Bayh-Dole Act, universities have become sort of venture-capital funds. They’re trying to appropriate the patents for the research they do.

Did American universities lose their original purpose? How do you see this transformation?

Hanna Holborn Gray: In some ways, you look at institutions like Stanford, for example, which is seen as, essentially, precisely what you describe, right? I’m always amused, if I may digress for a moment, by the fact that Thorsten Veblen, who, of course, was the first person to denounce the corporate university and who denounced the University of Chicago as one of them because he thought that William Rainey Harper was just a hustler . . .

But what I find very funny is that when Thorsten Veblen died, he was living on Sand Hill Road. Isn’t that nice?

Luigi: Yeah.

Bethany: That’s just fantastic.

Hanna Holborn Gray: I learned that from reading a biography of him. I loved it.

But I think that there is a great problem there, and of course, it tends to divide the humanists and that whole side of the university from some of the rest of the university.

In my view, if you’re going to have a business school—and you’re in the business school—it’s almost inevitable that kind of interest is going to exist. I don’t hold the business school responsible for this, by the way.

Of course, public policy is asking for that to happen in terms of the creation of companies, of the commercialization of university research, and so on. That then leads you to those issues of divided loyalties, divided interests—and increasingly, I think, the conditions of university research as funded by the federal government, and not only perhaps funded by private interests, look toward that kind of activity.

We’ve had less of it in Chicago, and there is the drive to have more of it. The question is, what kind of balance within an institution of this kind does that suggest? I don’t have an answer to those questions. I think those are questions that are still out there to be much more thoroughly dealt with and discussed.

I think that we have had, most recently, a board that has encouraged that more than, if I may say so, what I personally, privately, would have liked to see, but I am something of a purist when it comes to universities, or this one.

Luigi: Since you provoked me with the business school, can I provoke you back with one issue? Because I think it is a fact that the business school is taxed a lot by the university, and then if you look at donors, a big chunk of the donors at the university level are from the business school. The humanities are massively subsidized by the business school. How do you feel about that, and isn’t that an issue in terms of balance of power within the university?

Hanna Holborn Gray: This is an issue with every business school. Every business school knows that it can be self-supporting and instead is being asked to give a subsidy to the university.

I have two ways of thinking about it. One is, do you want to pay for the brand or not? That it is the business school of the University of Chicago? Maybe it doesn’t. Maybe it doesn’t. Maybe it should just be a freestanding business school.

But it is also a university that has tended to pride itself on having permeable boundaries so that different parts of the university can connect with one another, so that interdisciplinary work can take place, and so on.

To that degree, there are going to be internal subsidies. You’re not going to keep Sanskrit alive, because where are you going to find the people who are going to donate for us to keep Sanskrit alive, or some other things that are really a very important part of our culture, indeed of our civilization, in which we think the university exists in part to preserve? Probably it’s felt more here because it has been closer to the university than many business schools have been. You don’t have a separate campus the way Harvard does.

One of the things I noticed when I was involved with Harvard was the business school didn’t even ever want to have a visiting committee. That was commissioned by every department and every school of the university, but the business school of Harvard saw absolutely no reason why it should ever be visited.

Well, I also served on the board. I mean, Harvard has a ridiculous system of governance with two boards and all the rest. You should never have that. They finally agreed that we could visit them, so most of our meetings, we had sandwiches and sodas at a table. We went over to the business school, we were served a delicious meal, and then we were told about the deep need for money for the business school.

Then it turned out they were building a few more buildings and didn’t bother to ask anyone whether they could or should, and so on, but it was as though it weren’t even part of the university. Ours has always seemed to be part of the university.

Bethany: At Harvard recently, the trustees overruled the decision of the faculty in terms of which students would be allowed to graduate. Do you think that’s legitimate? What would you have done as president if the trustees had overridden a decision of the faculty?

Hanna Holborn Gray: Well, that was the Harvard Corporation. I once served on the Harvard Corporation. Formally speaking, the corporation has to approve the awarding of degrees, and the corporation was looking at a situation where these were students who had been charged with misconduct as a consequence of their conduct during the Harvard encampment.

It is an extraordinary thing, however, for the corporation to overturn a vote of the faculty, and I think if I’d still been a member, I would have said, “Come on, this is ridiculous.” But who am I to?

What I find extraordinary about the current Harvard Corporation is you have all these really extraordinary, really competent and important people on it, who behaved so strangely in ways that never would have taken place with their own companies. These are CEOs of some of the largest companies in America, and so on and so forth, and they could not be more competent at doing that, I guess.

But when it comes to university governance, trustees aren’t always as wise or as well informed as they might be. I think one reason for that is our own fault. I don’t think we teach our own students very much about universities. We teach them about the government of outer Mongolia, but we don’t teach them anything about how universities work or why.

The very universities that . . . Some of them are going to grow up, and they’re going to become their trustees and their alumni supporters and all the rest. They’re also going to become advocates for higher education, we hope, in the larger society. We hope they will be wise advisors, because it’s good to get the outside perspectives and good to get the candid observations of people with experience in different worlds.

But if we don’t teach them anything about universities when they’re at the university, that’s not a good thing.

Luigi: A friend of mine who was on the search committee at a different university was dealing with one of the trustees, and at some point, this trustee said, “But what is tenure?”

Hanna Holborn Gray: Oh, god. Well, many trustees think tenure is just ridiculous. Exactly. And, of course, they should understand that. Good trustees do, and we’ve tended to have a good tradition in trustees. For example, we do not ask the trustees to approve the awarding of degrees. We do not ask the trustees to approve every grant of tenure. That is done at Harvard.

Obviously, it’s not going to go against what departments want or what deans have recommended or the provost has approved, and so on, but symbolically, it is important because it suggests such an authority could exist over and above that of a university faculty and its president. That is not the case in this university.

But you will have noticed—and it’s of course probably not the case at Columbia—when the Columbia president testified in Congress, she talked as though she could decide not to award tenure to certain people. I was surprised that there wasn’t a bloody revolution on the spot, but it’s not a good way to start a presidency, for sure.

Luigi: Thank you very much, Hanna. It was really fantastic, and I think you should run for president of the country. I think you’d do much better than the ones who are currently running.

Hanna Holborn Gray: Oh, I’m constitutionally disbarred. I am a naturalized citizen. If a certain person wins, I could be deported.

Luigi: We’d be the two of us.

Hanna Holborn Gray: Right? And if I go on talking like this, I’ll certainly be deported, right? Any case, it’s fun talking to you. Thank you.

Bethany: Thank you so much.

Luigi: Bethany, this is my turn to ask you, what do you think?

Bethany: Well, as we were briefly discussing when we concluded our discussion with her, we want to know what she eats, what she drinks, what form of exercise she does, because, wow, amid all of today’s discussions of longevity, I want a mind like that when I’m 93. She is just exceptional.

But some of the questions we raised with her, there are big-picture answers to, but some of the governance of universities is so specific to that university that it is hard to arrive at big, generic principles on governance. Do you think that’s right, or do you think I’m overstating the case?

Luigi: No, you’re not, but I think you put your finger exactly on the right point. Universities are very different, even in the governance aspect, and most people don’t fully appreciate that. Part of it is because—and I take responsibility—I think we as a faculty have not done a good job in exposing those differences and showing how those differences can really impact outcomes.

I’ll give you a very simple difference that is not visible to most people. There are some institutions, like Chicago, where in order to be promoted, especially to tenure, you have to come in front of the entire faculty of your school. If you are a professor in psychology at the business school, your case is brought in front of the entire tenured faculty, which includes statisticians, economists, sociologists, and so forth, and they all have to vote on whether you deserve tenure.

In other, similar institutions, there is a small committee that makes all the decisions. The level of transparency, the level of knowledge, is completely different, and in my view, the quality of the decision process is very different.

Now, what we adopt is very costly from a time-consuming point of view, because it means that everybody needs to stop, and we don’t sit around the table anymore, but sit in a classroom and spend a lot of time discussing all these things. In some of that, we might be less competent than others, because if you are a psychologist, you get economics. Now, those two are even more similar, but if you get some very complicated statistics, you might not be able to follow what they’re doing.

But still, the process is very important. But also, the fact of how precisely the various positions within the hierarchy are appointed is quite interesting, because it’s true that the president is appointed by the board of trustees, and the board of trustees organizes the search.

But at least at Chicago—the dean of the business school, for example—the search committee is elected by the faculty, and the search committee comes with a list, and the list is given to the president. The president decides but most of the time decides on the first one on the list. I think there is a back and forth, but again, not all institutions are like this.

Bethany: What did you think was the most interesting thing that she said, and did you feel that we learned from her what you hoped for when we invited her on?

Luigi: Yeah. For example, I was very impressed by my pretty difficult question about the Sullivan Principles and what was done, et cetera. I like her position. Let’s just say, look, we should not use the endowment as a way to promote social change because that’s not the purpose of the endowment. However, we cannot be completely silent in some extreme cases. This is a position that is not so intellectually pure but is very wise, in my view.

Of course, this opens an enormous question of what is unacceptable, and different people disagree. I didn’t want to enter too much into the details of the Kalven Report, but then the statement of the Kalven Report is put into question, because if you don’t go by a majority view, my interpretation is you should go to an 80 percent or 90 percent majority.

Do you want to invest in Krupp during the opening salvo of World War II? No, but hopefully 90 percent of Americans at the time will be against it. I’m not so sure, but let’s assume that. But when it comes to conflicts that are much more divisive, maybe people are not willing to use that power, but it is an open issue, and I think she dealt with it very beautifully.

Bethany: I thought she did, too, and I was thinking as she was talking about the upsides and downsides of intellectual purity, because theoretically, it’s very lovely to have an intellectual construct that answers all questions, but in practice, that sometimes ends up not working.

I think back to this idea of transparency around how things work. If everyone knew whose decision it was about this or how decisions like this were going to be handled, and it was transparent and out in the open, I think that would be so much better than what we have today.

Luigi: Absolutely. And by the way, for full transparency and admiration for Hanna, she remembered that George Stigler, the namesake of the center that sponsors this podcast, not only was a member of the Kalven committee, but he dissented on one point, which is exactly this point.

Bethany: Explain that to me a little bit more. I didn’t quite catch that, and even when she said it, I didn’t catch it. What was Stigler’s dissent? What did he want, and what did the committee want?

Luigi: Stigler writes that “the university, when it acts in its corporate capacity as employer and property owner, should, of course, conduct its affairs with honor,” but “the university should not use these corporate activities to foster any moral or political values because such use of its facilities will impair its integrity as the home of intellectual freedom.”

The way I interpret this is, the Sullivan Principles were a way to pressure South Africa to change. And, of course, George Stigler was not against this change, but he said it was against the fact that a university would use, even under the most extreme situation, its corporate capacity, i.e., its economic activity, to foster political change.

This is shockingly timely because this is exactly the debate of divestment, and in 1967, this was already heavily debated as a topic at the University of Chicago.

Bethany: I also was thinking about this line that the neutrality of the university arises out of respect for free inquiry and the obligation to cherish a diversity of viewpoints, and the more involvement you have from the government—whether or not we think the government’s involvement is good, and whether or not we think the government viewpoint is right—it still forces a form of conformity to a single viewpoint, right? That also, by its nature, if you believe in the Kalven Report, then it’s problematic.

Luigi: You’re absolutely right, and I think maybe we should have another episode on the question of funding of universities, because I discovered there was a very interesting debate in the ’50s and ’60s—part of it at the Mont Pelerin Society, and part of it also involving George Stigler—about precisely the fact that who pays the piper calls the tune.

I think that this is true for the government, it’s true for donors, it’s true for students as well. I think that Stigler was concerned if the only funding was tuition, that the university would be too consumeristic, in the words of Hanna Grey. There is an important question of how universities should be funded that becomes more and more important today, given the activism that we have seen of some, for example, donors.