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.


A simple sparkling cocktail

Over at About.com Lance Mayhew has posted a simple brunch or aperitif cocktail we recently came up with featuring Quady Essensia, an Orange Muscat dessert wine. The wine is delicious on its own but we wanted to play with it in mixed drinks too. This one adds in mild Canadian whiskey, Prosecco, and orange bitters; head over to About for the recipe for the Viscusi cocktail.

Incidentally the drink is named after Vanderbilt economist Kip Viscusi, whose book Smoke-Filled Rooms happened to be out on my counter while Lance and I were experimenting with drinks. I don’t know if Viscusi is into cocktails, but I hope he’ll be glad to find his name on one if he ever comes across it.


Recent reading

Wow, it’s been a long time since I’ve done one of these. And since I took the “currently reading” list off the sidebar I should really do them more often. One complication: I’ve had less time for reading since leaving DC, where I could do my online news reading as part of my job and enjoy books each way on my Metro commute. It’s been harder to work reading into my Portland lifestyle. The ideal solution would be to spend more time reading on planes while flying to exotic destinations, but unfortunately I can’t afford this. In any case, here are a few recommendations:

The Prestige, Christopher Priest — The best novel about magicians I’ve read recently. Also the only one, but still a very good book. If you’ve seen the movie then you already know the two major plot revelations, but this doesn’t detract from the enjoyment at all; in fact, it lets one appreciate writing in the early parts of the book that would otherwise be mysterious or confusing. The dueling magicians are less violent and much more sympathetic here than in Christopher Nolan’s take.

This Earth of Mankind, Pramoedya Ananta Toer — The best novel about the Dutch colonization of Indonesia I’ve read recently. And it’s not the only one, because I read the entire series of four, known as the Buru Quartet. This and its sequel are the most character-driven and accessible. The third is dense with history, while the fourth changes perspective to that of a native collaborator. All highly recommended. (Incidentally, the name for my Ontosoroh cocktail, which uses the Dutch-Indonesian spirit Batavia-Arrack, comes from this book.)

Pets in America, Katherine Grier — As with most people named Grier, no relation. A fascinating exploration of how American attitudes toward pets evolved, with numerous historical accounts and illuminating photos and illustrations.

The Rest is Noise, Alex Ross — My lack of familiarity with the music discussed didn’t prevent from enjoying and learning a great deal from this history of twentieth century composition.

Born Standing Up, Steve Martin — I’ll read just about anything from Steve Martin. This, his self-account of developing as a comedian, was particularly fascinating to me for the ways his early training in magic helped him pull off his ecstatic physicality. A bonus treat for Vanderbilt alumni is his description of how a performance at the university accidentally birthed an ending to his act that he used for years. (Though interestingly, my father was there for it and remembers the details differently. Highlight from his recollection: Martin telling security officers that his name was Carmichael Towers!)


Econ for frat boys

Tyler Cowen points to a paper [pdf] about what economics majors think of their studies. The most interesting conclusion is that having an unrestricted business program increases satisfaction in the econ department:

A much higher percentage of students were very satisfied with the economics major at schools with unrestricted-entry business programs as compared with schools with a restricted-entry business program. This is logical because many students at restricted-entry business program schools may have taken the economics major as an alternative to the business program as an alternative to the business program they could not get into, and therefore would not be as satisfied because it is not the track they would have chosen ideally…

This data suggests that the presence of an unrestricted-entry business program has a positive impact on the satisfaction levels of economics majors. When such programs exist, the economics major is not forced to balance both the goals of students who would rather be in business programs with the goals of students who would study economics either way; therefore the economics major can more easily suit all of its students’ demands.

This tracks my experience at Vanderbilt, which doesn’t offer an undergraduate business major. The economics major is the largest in the College of Arts and Science and that’s not because Vandy students happen to be particularly curious about economics. It’s because they want to make money in business or law after college and studying econ seems like the thing to do until then. As a result the classes are large and dumbed-down, exercises in mathematical problem solving disconnected from real world application or a tradition of inquiry. (One of my philosophy professors once asked a Vanderbilt economics professor for advice about how to teach the Coase Theorem; his response was that he shouldn’t be trying to teach it to undergrads anyway!)

A few years ago Vandy introduced a minor in managerial studies. According to an article in The Torch, it’s become immensely popular: 350 students were bumped from classes in one semester last year. There’s clearly demand for an undergraduate business program, but the university refuses to offer one on the grounds that it would do harm to the school’s integrity as a liberal arts institution. That may be true, but the cost is an academically weakened economics department. Students who are genuinely interested in economics are done a disservice by having to share their major with so many disinterested peers. The university might be better off shunting business students off into their own interdisciplinary program of some kind.


Gordon Gee does right

Former Vanderbilt Chancellor is one of two Ohio university presidents to sign on to the Amethyst Initiative, a movement among administrators to lower the drinking age from its current ridiculous high of 21. Gee’s actually predictably soft on the issue, but it’s good to his name on there just the same.

The complete list if signatories is here. New Vandy Chancellor Zeppos doesn’t appear. Get on it, Nick!

[Via Agitator co-blogger Ryan Grim.]


Zeppos takes over Vandy

I second Chad’s hearty approval of Vanderbilt’s appointment of former provost Nick Zeppos to chancellor. Though Gordon Gee’s fundraising prowess was phenomenal, he preferred selling a grand vision to following through on the details, and ultimately left before seeing his transformations complete. Like Chad, I also found Gee false and politic in our interactions (and he never remembered my name, either).

Nick, in contrast, was always sincerely friendly and interested in hearing students’ views even when they were opposed to the administration’s long-term plans. He’s been with the university as a law professor, provost, and chief development officer. Now that Vanderbilt has so many changes underway, I can’t think of a better guy to have at the helm.


Prodigal chancellor

Vanderbilt’s soon to be former chancellor Gordon Gee says that Ohio State is his real home. But in hiring the guy who’s held more university presidencies than any other American — this will be his sixth since 1981 — Ohio State has figured out that long-term incentives are a good idea:

Board Chairman G. Gilbert Cloyd said Mr. Gee’s contract is still evolving. But a draft of that contract calls for a base annual salary of $775,000. He would receive an additional $225,000 a year if he stays beyond five years.

Smart move.


Vandy fashion update

Delta Delta DeltaIf the epidemic of pastel Ugg boots of several years ago proved anything, it’s that Vanderbilt women should beware of strange fashion trends from island nations. That lesson must have faded from institutional memory. As Chad reports from our weekend excursion to Nashville for our college’s annual Rites of Spring concert, a new atrocity has swept across the Vanderbilt fashion landscape:

The muumuu is perhaps the worst of all worlds: it is like placing a price ceiling on attractiveness: everyone above a 5 becomes a 5 by wearing one, but no one below a 5 can become more attractive by wearing one… I’m told that no one on campus wore this before Friday, and that it was some kind of spontaneous mass early adoption. Some wore them with bows. Some wore them with belt buckles. Why? WHY??? Try a google image search on muumuu: do you notice a theme? People in muumuus look (a) very, very large, (b) very, very large and pregnant, or (c) very, very large and male. One of the pictures even has a cow wearing a muumuu. If you have a figure, or anything even close to resembling an approximation of a figure, why would you destroy it so thoughtlessly? Surely there are other ways to feel comfortable on a breezy day? What happened to the summer dress? The bikini top? Even a t-shirt?

To avoid sounding sexist, I’ll concede that Vandy men’s fashion looks just as dumb. But Vandy frat boys always look dumb, so this isn’t really news.

In the meantime, my mental image of Vanderbilt women is going to be marred for a long time by the infamous King Size Homer.


Gordon Gee gets WSJed!

Gordon Gee in the WSJVandy people, what did you think of the Wall Street Journal story yesterday on our bow tie sporting chancellor? Excerpts are below the break.

Though the article was primarily about a perceived lack of oversight regarding Gee’s spending and compensation by the Board of Trustees, perhaps the most interesting fact to be revealed is that his wife, Professor Constance Gee, received a formal reprimand for smoking marijuana in the university-owned chancellor’s mansion. The couple claimed at the time that it was to treat an inner ear ailment but are not commenting now.

I’m all for Professor Gee’s right to smoke at home, medicinally or not, and I can also understand not wanting to comment directly on the matter. I think it would be very neat, however, if she used this opportunity to come forward in support of liberalizing drug laws, as she has not been shy about promoting left-leaning policies in the past. And who better to do that than the wife of a teetotaling, LDS chancellor of a top 20 university?

For the record, there were 15 arrests and 25 disciplinary referrals for drug violations on campus in 2004.

The second most controversial part of the article is the university’s cozy parking contract awarded to Central Parking Corp., a company whose executive chair Monroe Carell sits on the Board. I remember a friend from The Torch wanting to investigate this years ago and am glad to see the story in print. The contract was never put to competitive bid, as I believe it should have been, and there may have been some undue pressure on the athletic department to continue hiring the corporation even after it wanted to switch to a new provider. (The next contract has been put up for bidding.) That said, blogger Donald Luskin provides a good perspective on just how paltry the amount in question is given Carell’s $40 million worth of donations to the university. The parking contract may be a sweet deal at the margin for Carell, but even with a discount rate of zero Luskin calculates that it would take nearly 700 years for him to break even with the university. See also Luskin’s take on Senator Grassley’s desire to federally limit university compensation.

The last major item in the WSJ story is the lack of oversight for Gee’s renovation and entertainment budget, which is very generous. It’s hard to argue that Gee’s parties aren’t good for university fundraising, however. Under his leadership Vanderbilt recently completed a $1.75 billion capital campaign. It sounds like some additional oversight could help ensure greater discretion and a better return on investment, but as long as the money keeps rolling in Gee’s entertainment budget should continue to be large.

I’ve made it clear in the past that I have reservations about a lot of what Gee’s doing and am glad to see him being reined in by the Board and the press, but the WSJ article seems that it may have focused a bit too much on the negative while not giving enough mention of what he’s accomplished. To that end, Vanderbilt has posted a rebuttal of sorts here.

Some excerpts of the article are below. Let me know if you want the whole thing.

The opening of the article:

NASHVILLE, Tenn. — At Vanderbilt University, the board is trying to rein in star chancellor E. Gordon Gee, without running him off.

Since arriving here in 2000, the 62-year-old Mr. Gee has dramatically boosted the 133-year-old school’s academic standing and overseen fund raising of more than $1 billion. Mr. Gee’s $1.4 million annual compensation is among the highest for U.S. university leaders.

But supervision of Mr. Gee by the university’s 44-member Board of Trust has “probably been a little loosey-goosey,” says trustee Edward Malloy, a former president of the University of Notre Dame. Vanderbilt paid more than $6 million, never approved by the full board, to renovate and enlarge Braeburn, the Greek-revival university-owned mansion where Mr.
Gee and his wife, Constance, live. The university pays for the Gees’ frequent parties and personal chef there. The annual tab exceeds $700,000. Some trustees’ concern was aroused when they learned that Mrs. Gee was using marijuana at the mansion. The chancellor told some trustees she was using it for an inner-ear ailment.

Now change is afoot. Trustees recently created a subcommittee to monitor Mr. Gee’s spending. For the first time, the full board will get reports about his expenditures and pay package. A second new board committee is scrutinizing potential conflicts of interest and likely will look at the university’s longtime contract with a parking company in which a trustee holds a big stake.

On the mansion:

Meanwhile, the university began renovating Braeburn, which was built in 1915. The project, which included new plumbing, heating and electrical systems, expanded the mansion by 3,700 square feet, to a total of 19,700. Construction permits estimated the cost at $2.1 million. But the final tab exceeded $6 million, according to a person close to the situation.

Mr. Hall says he knew the building was in poor repair but the extent of the work was a “surprise.” Mr. Gee says, “We indicated some of the things that we thought would be important, including creating a space for all the entertaining we were going to do.” However, he says he didn’t keep tabs on the project’s cost because he didn’t want to be perceived as trying to shape the project for his personal gain. “I was told it was done right, it was done well and it was done on budget,” he recollects. In hindsight, he agrees he should have learned the amount and kept the full board apprised.

Still, Mr. Gee says, “we paid for that house over and over and over again.” He notes that the university has raised more than $1.2 billion since he arrived and says, “A lot of that was raised in that house.” Some of the money went to build the endowment, which has grown to about $3 billion from $2 billion in 2000.

Mr. Gee estimates that Braeburn is home to several hundred events a year. The events range from five-guest dinners served by a waiter to large fund raisers for Nashville-area nonprofits where Vanderbilt pays the bill. Improving community ties “is a very good use of university resources,” Mr. Gee says. “We don’t live here to have parties for ourselves.”

In some cases, the connections to Vanderbilt are more tenuous. Three years ago, Mr. Gee and his wife hosted a party to celebrate a memoir written by their friend Marshall Chapman, a rock singer, songwriter and Vanderbilt alumna. Ms. Chapman says 300-plus guests dined at tables covered with tie-dyed cloths while she sold about 65 copies of her book. The party cost Vanderbilt more than $15,000, according to the person familiar with the situation.

On the marijuana:

In the fall of 2005, university employees discovered that Constance Gee, a tenured associate professor of public policy and education, kept marijuana at Braeburn and was using it there, according to people familiar with the matter. A few weeks later, several trustees and a senior university official confronted Mr. Gee in his office, telling the chancellor he shared responsibility for allowing marijuana on university property, the person familiar with the situation recalls.

Trembling, the chancellor replied, “I’ve been worried to death over this,” according to this person. Mr. Gee said his wife smoked marijuana to relieve an inner-ear ailment, this person says. The Gees decline to comment on the incident.

Mrs. Ingram, Vanderbilt’s board chairman, formally reprimanded Mrs. Gee for possessing and using the illegal drug. The matter was “handled appropriately and satisfactorily,” says Mrs. Ingram, who is chairman of Ingram Industries Inc., a conglomerate with interests in book distribution and shipping.

[Thanks to Renee for the tip.]


Back from Rites ’06

Yes, blogging has been light lately, and yes, it may stay that way for a short while as I work on some other things. But this weekend I had an excuse as I headed down to Nashville to visit friends, toss the Aerobie, and attend this year’s Rites of Spring concert. One of the most amusing parts of this outdoor music festival is always Vanderbilt’s hopeless attempts at making sure that in a crowd of hundreds of undergrads only the ones over 21 are drinking alcohol. Chad describes our utterly pointless troubles with The Man here.

The low point of the concert was unquestionably Clap Your Hands Say Yeah!, who had everyone within earshot commenting that they were one of the worst bands they’ve ever heard. It was amazing to hear how many people (Barzelay, for example) have said that their studio album is very enjoyable, despite their terrible live performance. The sentiment was so universal that I’m almost convinced it’s the result of an insanely genius marketing strategy: after enduring such a miserable hour of their live music, I’m almost tempted to buy the album just to see how they can possibly produce something good. Almost.


Vosges and modern entrepreneurship

I sampled my first Vosges chocolate bar last year when someone brought one into Murky. It was the delicious Red Fire Bar, and from that time on I was intrigued by the company’s exotic chocolates, though price and availability prevent me from enjoying them too often.

Last night I learned that Katrina Markoff, the founder of Vosges, is a Vanderbilt alum. Vanderbilt Magazine just ran a cover story about her. It’s worth reading for its description of the chocolates and as a look at the new face of entrepreneurship:

Katrina Markoff doesn’t look like your typical hard-driving entrepreneur. Her long, wavy, dark hair is just this side of disheveled, and over her jeans she’s wearing an untucked, Western-style shirt embroidered with red roses. Markoff looks younger than her 31 years and seems sweeter than a company president should. She has a natural beauty and warmth that seem to captivate everyone she meets, from journalists to celebrities to the young, hip staffers (who are outdressing their boss by a mile, with their sharp outfits and high heels). But it’s clear that Markoff’s drive, intelligence and charisma are the emotional as well as the creative hub around which Vosges and its staff revolve.

The author gets this one introductory paragraph completely wrong. What is “your typical hard driving entrepreneur?” The past decade should have killed off the cigar smoking Uncle Moneybags image long ago. Markoff is interesting not because she’s so different from the typical entrepreneur, but because she so wonderfully embodies the possibilities that entrepreneurship offers in a world powered by diverse tastes, the Internet, and the demand for infinitely varied brand identities. The real story is Markoff as exemplar, not as outlier. For a creative, driven person, starting a successful business can be just as much about self-expression as it is about making money, as seen in the Vosges vision of its ideal consumer:

Markoff invented a character named Sophie to help embody and market the Vosges ideals. “Sophie is cosmopolitan, but into political action,” says the cosmopolitan, politically aware Markoff. “She can lay down in the dirt and go camping, but she knows fashion. She’s a little granola, a little fancy.” Looking at Markoff (still stunning after a long day of work, though her wrinkled shirt is riding up her tummy and her mascara is descending below her long lashes), one sees a woman who has tramped around the world from market to market, who loves to ride horses, who knows fine cuisine, who looks equal parts Vogue and Mother Jones?and the obvious question is, Where does marketing end and Markoff begin?

The big challenge for Vosges is maintaining the brand in the face of great success. How does Markoff keep the boutique feel of Vosges while doing $4.5 million in sales per year?

Markoff ‘s approach to marketing came out of the fashion industry, and she cites Calvin Klein as a model: “He has a big store on Fifth Avenue that defines his brand. Then he makes volume in perfumes.We create brand in truffles.Volume is in candy bars and cocoas.” But even the candy bars are available only at Vosges stores, through the catalog, and at Whole Foods Markets.

The company also serves as an outlet for Markoff to promote the changes she wants to see in the world:

All the [truffle] collections offer an opportunity for education. Markoff uses her packaging and catalog copy to talk about the countries and cultures that inspire her collections and often are home to the spices. Sometimes the collections offer an opportunity for social action or increasing social awareness. The Aztec Collection carries the message ?Save Women in Juarez,” referring to the epidemic ofmurdered or missing young women in that city. Twenty-five percent of the profits from La Grande Hatbox — a $200 collection of chocolate products –goes to support V-Day, the global movement to stop violence against women and girls.

There’s much more, including a section on how Markoff’s passion for yoga is also integrated into the business and some very enticing photos, in the full article (click on the .pdf).

Vosges chocolates are available here.


Torch and Slant in The Scene

I can’t resist quoting this Nashville Scene review of the local student media, which gives my old paper, The Torch, a very favorable write-up:

This robust commentary magazine for campus conservatives and libertarians excises the usual harpy prattle that hinders most ideological journals. Instead, The Torch presents well-reasoned arguments without condescending to its liberal readers. Recently, Ann Coulter’s engagement as a Langford Auditorium lecturer provided an interesting point/counterpoint debate between Torch’s Coulter sympathizer and its libertarian doubting Thomas. “I felt like I was listening to an insecure friend trying to use inside jokes to show she belongs,” wrote J. David Maynard about Coulter’s speech. A rightist magazine admitting Coulter’s snippy remarks look bad for the entire conservative movement? With caveats like these, The Torch is a battalion of intelligentsia any moderate or liberal could get behind.

Incidentally, Dave’s actually more conservative than libertarian. The Torch starts it’s fifth year of publication next month.

The Slant receives some good words, too:

Think penis-joke-obsessed teenage cousin of The Onion. Vanderbilt’s mockingly caustic satirist rag ruffled a few feathers when it distributed a bogus edition of The Hustler, falsely reporting Chancellor Gordon Gee’s untimely death. Two years and a few faculty censures later, the online edition of Vanderbilt’s sophomoric publication features Gee’s beaming countenance super-imposed over a busty blonde’s pasties-clad rack. The nebbish plutocrat is a popular target for The Slant’s perpetually snarky contributors. Once the Weekend at Bernie’s-style jousting recedes, The Slant proves to be a worthy contender to The Onion’s golden throne of sarcasm.

The Hustler and Orbis are comparatively panned.


Coase-ting toward a solution to the dorm dispute

I hate to bring up the Confederate dorm issue again, but it so nicely illustrates a principle of legal economics that I’m going to anyway. The latest news is that Dr. Eddie Hamilton, a black Vanderbilt alumnus, has offered $50,000 to the United Daughters of the Confederacy if they will allow Vanderbilt to change the name of the building. He’s encouraged others to chip in as well and the UDC has stated a willingness to “look at any offer on the table.” [Thanks to Chad for the update.]

Anyone who’s done some reading in the economics of law will recognize this as an illustration of the Coase theorem, which states that resources will be allocated efficiently regardless of the initial distribution of property rights (assuming there are no transaction costs). 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 other interesting thing about this is that it makes the appeals court’s determination that Vanderbilt could void the contract for about $700,000 (the approximate value of the UDC’s donation in today’s dollars) nearly irrelevant. This was a somewhat arbitrary decision, but if the UDC’s reservation price is below that it doesn’t matter. 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. Can we imagine any other situation in which Dr. Hamilton would voluntarily write a $50,000 check to the United Daughters of the Confederacy?

Debates about this stupid dorm have raged for years in the Student Government Association, op-ed pages, weblogs, and the courts. Perhaps people will finally be happy when they let the market decide the issue.


Once more on the Confederate issue

For those who care about the issue, Vanderbilt has lost on appeal in their legal battle with the United Daughters of the Confederacy to change the name erase the first word from Confederate Memorial Dormitory. The court ruled that Vanderbilt would have to pay the UDC their 1932 donation of $50,000 in today’s money, which by one calculation would be about $700,000.

In its decision, the court made an interesting point about how letting Vandy change the name without penalty would create a credible commitment problem for universities trying to raise money:

We fail to see how the adoption of a rule allowing universities to avoid their contractual and other voluntarily assumed legal obligations whenever, in the universitys opinion, those obligations have begun to impede their academic mission would advance principles of academic freedom, the court ruled. To the contrary, allowing Vanderbilt and other academic institutions to jettison their contractual and other legal obligations so casually would seriously impair their ability to raise money in the future by entering into gift agreements such as the ones at issue here.

Chad has more on the subject here, including a mention of a humorous gaffe on the part of The Register. My previous commentary is here.

I’ll be out in the woods for the weekend, so unless Shenandoah National Park happens to be wi-fi enabled don’t expect any blogging. That means you have a two day grace period to post argumentative comments without fear of rebuttal.