A Coasean solution to Vanderbilt’s Confederate problem

When I was an undergrad at Vanderbilt University (2000-2004), one of the most contentious topics on campus was the status of the Confederate Memorial Hall dormitory. Constructed with a donation from the United Daughters of the Confederacy given in 1933, the name became viewed as out of place on an increasingly diverse campus, and the administration sought to change it. In 2005 an appeals court ruled that it could not do so without compensating the UDC, resulting in a stalemate that lasted until this week:

Vanderbilt University has settled a long-running lawsuit so it can rename Confederate Memorial Hall. The school will pay $1.2 million to the United Daughters of the Confederacy, which is considered present day value of the original $50,000 donation more than 80 years ago.

It took a long time, but this is roughly the outcome I suggested in a 2005 blog post about the dorm controversy, offering compensation to change the name, and the Coase theorem:

As long as this dorm dispute was tied up in the court system, the name was stuck as is. Bargaining has begun now that the appeals court has determined that the right to name the dorm belongs to the UDC. The transaction costs are not insignificant, but if there are enough Vanderbilt alumni who care about this aspect of the university’s image, the name will change. […]

The existence of a well defined property right forces each side to take the other’s interests into account: the UDC has to ask itself if keeping the name “Confederate Memorial Hall” on an increasingly progressive campus is worth the opportunity cost of whatever else it could do with a sizeable amount of money while the university community considers whether it’s worth compensating the group to change the name.

That’s exactly what happened. Until now, the university’s position has been that it would spend funds “for other purposes rather than enrich an organization whose values it does not share.” But now anonymous donors have put up enough money to settle the lawsuit with the UDC and permanently remove the name from campus.

It’s an imperfect solution — I can think of a lot of groups I’d rather see with an unexpected $1.2 million before the United Daughters of the Confederacy — but it’s good to see the dorm issue finally peacefully resolved. And in the bargain, Vanderbilt professors get a new case study to use when teaching students about the Coase theorem.