Thoughts on "Almost Wholly Negative"
By David Henderson
This morning, I was perusing the American Economic Association’s program for its annual meetings, trying to decide whether to do the 2+ hour drive up to San Francisco for a day on Sunday. I worked my way through the program, downloading papers that look interesting.
The one that grabbed me most–and I went on to read the whole 49-page paper–is David M. Levy and Sandra J. Peart, “Almost Wholly Negative’: The Ford Foundation’s Appraisal of the Virginia School.” (Here is the 2014 version.) It’s a fascinating look at the correspondence between James M. Buchanan and Ronald Coase, both then at the University of Virginia, and Kermit Gordon, then at the Ford Foundation. Buchanan and company were applying for what was then a large amount of money, over $1 million in 1960 dollars, to help fund their interdisciplinary program for at least 10 years. The Ford Foundation said no.
There are other players in the discussion also, Warren Nutter at U. Va. being the main one.
Disclosure: I knew Buchanan quite well, having been at many meetings with him over the years, and having interviewed him about his life and work in about 1995; Nutter somewhat, having visiting him at his office at AEI in the summer of 1973 for about an hour; and Coase a little. I liked all three a lot.
Levy and Peart do a good job with their Sergeant Joe Friday “just the facts, ma’am” approach. They do give some interpretation and commentary, but it’s minimal.
But that won’t stop me.
It won’t surprise anyone who knows me to know that I would have hoped against hope that the Ford Foundation would fund the U. Va. project. At the same time, unlike Buchanan and Coase, I don’t think Kermit Gordon was off-base in thinking that the funds would go to finance a “point of view.” Yes, there would be differences among the scholars, but the unifying theme was the idea of exploring liberty and how to create and maintain a free society. At that time, that was controversial. It still is. Gordon was a statist and it should have come as no surprise, although it seemed to, especially to Coase, that he was “almost wholly negative,” to use Buchanan’s words. Gordon was probably off-base, as Nutter asserted, in thinking that Harvard and Yale did not have a “point of view.” Great line in Nutter’s letter to Coase:
The most disturbing thing about our proposal is that the Center is tied up with a “point of view” whereas the Foundation supports national programs “of unbiased institutions, like Harvard and Yale.[“] (He really said that.)
Here’s what else I found interesting: how poor a job Coase did of trying to persuade Kermit Gordon after the initial negative response. Granted that the odds of getting the grant were very low. But had I been in Coase’s position, I would still have carefully crafted a letter to try to raise that probability, however slightly. I’m not saying that Coase went macho flash on the guy: Coase was always such a decent person and his decency shone through. But he didn’t have much of a strategy.
In his September 17, 1960 letter to Kermit Gordon, in telling Gordon what he had taken away from his meeting with Gordon, he wrote:
If the University of Virginia would appoint some Socialists or near Socialists to its economics faculty, it would at least become eligible for consideration by the Ford Foundation.
On second thought, I take back my earlier comment: this is bordering on macho flash.
Coase went on to write:
But it is sad to think that institutions which operate within the classical tradition from which our subject and your country [recall that Coase was British] sprang, should stand suspect and friendless at such a time as this.
Well, yes, it is sad, but did Coase really think that line would be persuasive?
Sure enough, Gordon reacted. Here’s his opening paragraph in his October 7 response:
I shall not pretend that I was pleased to read your letter of September 17. You have chosen, for what reason I do not know, to misrepresent most shockingly the views which I expressed to you in our meeting on September 14. To ascribe to me, even by implication, the view that the University of Virginia should appoint “some Socialists or near Socialists to the economics faculty”, is an unfounded and irresponsible utterance.
Don’t hold back, Kermit. Tell us what you really think.
Buchanan, by contrast, was much more strategic. He realized early on that they would be unlikely to get through to Gordon and their best shot was to work on Thomas Carroll, vice-president of the Ford Foundation.
Of course it’s possible that Coase had completely given up on getting funds and so didn’t take care to craft a strategic letter. I know what I would have done, though: tried to address his concerns without attributing–and let’s face it, it wasn’t fair to attribute–the idea that Gordon had wanted to have U. Va. appoint socialists or near socialists. Gordon was a statist, not a socialist.