Separation of School and State

June 15, 2011

During my last semester of law school, we read an interesting case for Corporations class, A. P. Smith Mfg. Co. vs. Barlow, 13 N.J. 145, 98 A.2d 581.  In this 1953 decision by the New Jersey supreme court, the question (basically) was whether the corporation was allowed to donate money to charity, or whether donating would be an illegal waste of the shareholders’ money.  I won’t bore you with the legal details (the court found that the corporation was allowed to make such donations), but listen to some of the testimony in the case: 

The company had a factory in East Orange, New Jersey, and “contributed regularly to the local community chest and on occasions to Upsala College in East Orange and Newark University, now part of Rutgers, the State University.”  In 1951, the corporation also gave $1,500 to Princeton University (page 147).

The president of the company himself testified that such contributions are not only good for the recipients, but also good for the donor, the corporation—that they are “a sound investment”—because they give the company a good reputation, because the company can later hire well-educated graduates of those universities, and because the public expects corporations to spend some of their money on philanthropy.

That all sounds good, but I was especially interested in this part of the testimony (page 148):

Mr. Irving S. Olds, former chairman of the board of the United States Steel Corporation, pointed out that corporations have a self-interest in the maintenance of liberal education as the bulwark of good government.  He stated that “Capitalism and free enterprise owe their survival in no small degree to the existence of our private, independent universities” and that if American business does not aid in their maintenance it is not “properly protecting the long-range interest of its stockholders, its employees and its customers.”  Similarly, Dr. Harold W. Dodds, President of Princeton University, suggested that if private institutions of higher learning were replaced by governmental institutions our society would be vastly different and private enterprise in other fields would fade out rather promptly.  Further on he stated that “democratic society will not long endure if it does not nourish within itself strong centers of non-governmental fountains of knowledge, opinions of all sorts not governmentally or politically originated.  If the time comes when all these centers are absorbed into government, then freedom as we know it, I submit, is at an end.”

The objecting stockholders have not disputed any of the foregoing testimony nor the showing of great need by Princeton and other private institutions of higher learning and the important public service being rendered by them for democratic government and industry alike.

Now, I can hear another one of my professors in the back of my head saying that we should always ask who the speaker is, when he was speaking, and why.  This case comes from the 1950s, during the Cold War, and no doubt that goes a long way toward explaining what these witnesses said.  But that doesn’t make it any less true.  It’s not as if all other ages had been prejudiced and ignorant, and our own age impartial and clear-sighted; it’s not as if everything said in a particular era in the past were therefore presumptively false, while everything said in our (also particular) era is true.  It’s logically equally possible that the Cold War gave Americans real and urgent reasons to think clearly and deeply about liberty, government, and the relationship between them, and that we have since lazily largely forgotten about all that.

I think those leaders’ testimony was remarkably insightful and far-sighted.  I agree:  Universities (and, ideally, all schools) should be independent of the government.

In fact, I think our society should have as many independent centers of power as possible, the better to check each other, and especially to check the government.  Even more fundamentally, at least for universities, to the extent that the government controls or funds them, we can’t expect them to pursue the truth faithfully, wherever it leads them; instead, to that extent, they will tend to serve their master, the state.

You may be asking what that means concretely:  What would the universities discover or say that they won’t today, because they’re beholden to the state?  Well, the single biggest thing is the question of the size of government itself:  How big is big enough?  How high should taxes and spending be?  Is this or that thing better accomplished by private actors or by the government?

In our universities today, the answer given is usually in favor of the government.  Empirically, the professors are overwhelmingly big-government liberals.  For an illustrative concrete example, read about John Lott’s astonishing experience with academia and politics in Montana in the introduction to Freedomnomics.

In short, those corporate philanthropists and academics were right.  They did what they could in their time to keep universities independent and our liberal democracy strong, but in our time, to some extent, we have let their dire prediction come to pass:  We let “non-governmental fountains of knowledge, opinions of all sorts not governmentally or politically originated” be increasingly “absorbed into government”, and as a result, we do indeed have less freedom.

So much the better for government, perhaps, but so much the worse for us.

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38 Responses to “Separation of School and State”

  1. Snoodickle Says:

    The most hilarious part about this is that you attended a public law school. Ha ha ha.

    Also, I find it interesting how corporations are enjoying record profits these days, notwithstanding the fact that government has grown. If the corporate leaders you referenced had been able to see into the future, they would have forcefully advocated for the growth of government. After all, it is profit that matters most.

    Check and mate. jk.

    • Tevyeh Says:

      “…corporations are enjoying record profits these days, notwithstanding the fact that government has grown.”

      Corporations generally? Man, why don’t I start a little lawn care business and incorporate it? Then I can get my share of those “record profits.”

      Oh, wait…you must be referring to corporations like G.E., which are getting fatter and fatter from an unprecedented level of government largesse. But you make a good point, though…conservatism is all about enriching big-shot corporate executives and major shareholders, right? So if bigger government helps them accomplish this goal, what are these conservatives complaining about?

      Or maybe…just maybe…the “Conservatism Favors The Rich” narrative is largely a relic of the early 20th Century, and you’ve just thrust that rapier wit of yours through a straw man older than your Grampa.

      • Snoodickle Says:

        If you don’t think that the so-called “conservatives” in this country are all about making the rich richer, then you truly are an idiot. A relic of the early 20th century? ha ha ha. Good grief. Nearly every conservative in this country supports lower taxes on the rich, lower or no estate tax, lower corporate taxes, less corporate regulation, etc. etc.

        P.s. I have a rapist wit.

      • Tevyeh Says:

        So, there’s no coherent theory proposing that a lower, flatter income tax curve and/or lower corporate tax rates accrue to the benefit of the population generally? Or is that one of those right-wing theories that can be debunked by reference to one or two data points?

        Liberals never look beyond the first iteration of economic logic. If you disagree with me, you truly are a stupidhead dumdum. Good grief, Charlie Brown.

      • Snoodickle Says:

        Didn’t you just imply that the little guys (i.e. the lawn mowers) are not doing well in today’s economy? Why haven’t the Bush tax cuts helped them? Why don’t you provide a data point showing that low tax rates help the common man? Even during the exalted Reagan era, it is my understanding that the trickle down effect was minimal. Again, the rich got richer.

        I admit that I know nothing about economics, but it somehow appears you know less.

      • Tevyeh Says:

        Welcome to Economics 101. I will be your instructor, Professor Tevyeh.

        As is the standard protocol in introductory economics courses worldwide (I think), we will begin today’s lecture with a discussion of an essential concept in economic modelling: “ceteris paribus” (Latin for “other things equal.)

        When proposing a causal relationship between two variables, ceteris paribus is, if not explicitly stated, at least implied. For example, I propose that a smoker is likely to live longer if he quits, ceteris paribus. By the caveat of “other things equal,” I disclaim predictive power if the smoker swaps smoking for shooting up heroin and sharing needles with Zambian prostitutes.

        The proposition that tobacco smoking is causally related to shortened lifespan is empirically testable via carefully construced observational studies. By comparing thousands of smokers and non-smokers and carefully controlling for other variables (lifestyle, diet, genetics, etc.) medical researchers have found compelling evidence for this proposition. The large sample sizes from an enormous, heterogeneous population of smokers and non-smokers has enabled them to tease out the “signal” from the “noise” and establish a negative correlation between tobacco use and lifespan.

        Unfortunately, politically motivated pundits and hack researchers often attempt to “empirically” prove or disprove a causal relationship between two macroeconomic variables, referring to an extremely small sample size (often a sample size of one). For example, some supporters of Ronald Reagan have pointed to the increase in federal revenues following the income tax cuts of 1981 and 1986 as “proof” that a reduction in tax rates leads to higher revenues. Similarly, some point to the 1993 tax hikes under Bill Clinton as proof that higher taxes lead to the kind of economic growth and prosperity that we witnessed in the mid-late 1990’s. Unfortunately, these hacks are attempting to build their cases on a foundation of sand.

        I cannot think of a practical, reliable way to empirically test the hypothesis that a change in tax rates has a causal relationship–CETERIS PARIBUS–with employment, economic growth, or any of the other social/economic variables that tax rates are supposed to impact, one way or the other. How would we measure changes? By longitudinal observation (i.e. before and after the change in rates)? Unless you can hold all other relevant variables constant (which you can’t), ceteris paribus fails. How about international comparisons? Don’t make me laugh…ceteris paribus likewise fails.

        Why haven’t the Bush tax cuts helped the little guy? Well, how do you know they haven’t? Do you have a window into a parallel universe identical to ours in every way, except that the 2001 and 2003 tax cuts weren’t enacted? How are they doing over there? (Actually, you’d need several parallel universes with and without the Bush cuts if you want to establish correlations).

        So if we can’t support macroeconomic theories empirically, how do we support them? Well, the insufficiency of the available data leaves us groping in the dark (whether we realize it or not), so I propose that we use our brains instead. Human beings are obliged daily to make important decisions despite inadequate data, so ideally we default to reason and logic.

        Want to discuss why I think aggressively taxing top income earners is harmful across the board? We can have that debate (hint: the phrase “trickle down” doesn’t do the theory justice). Just don’t whip out the porcelain sword of empiricism, and don’t try to send me on the fool’s errand of finding my own empirical support.


      • Editor’s note, to the reader:
        In case it affects your interpretation of their conversation, I should admit that I was not able to approve Snoodickle’s most recent comment (“Game. …”) until after Tevyeh had also submitted his most recent comment (“Welcome to Economics 101. …”).

      • Snoodickle Says:

        An impressive trick, writing a post that long without making a single real argument.

      • Tevyeh Says:

        Oh, man, didn’t he just post a link to that arch-hack, Paul Krugman! HA! Logical fallacies are Krugman’s specialty.

      • Tevyeh Says:

        Hey Snoodickle, did you hear a “whoosh” sound as you read(?) my post?

      • Snoodickle Says:

        When are you going to win your Nobel Prize?

      • Tevyeh Says:

        Laying aside that Krugman got his Nobel for his work on international trade (which only tangentially relates to macroeconomic policy generally)–you do realize that appeal to authority is considered a logical fallacy, right?

      • Tevyeh Says:

        If you’re comfortable with appeals to authority anyway, I’d be happy to refer you to at least two other Nobel laureates who say that Krugman is full of crap.

      • Snoodickle Says:

        Has the moderation feature been eliminated?

    • Snoodickle Says:

      I’m merely pointing out that your arguments are terrible. Don’t take it so personally.

      • Tevyeh Says:

        On the contrary, you’re not “pointing out” anything; you’re making bare assertions. Care to point out where and how my argument fails?

      • Snoodickle Says:

        You’ve only made one argument that I can see and that is that American conservatism doesnt favor the rich. I pointed out that this is ludicrous and you’ve failed to counter, instead relying on abstract economic assertions that are virtually meaningless.

      • Tevyeh Says:

        Again with the bare assertions.

        You asked me for data supporting the proposition that tax cuts help the “little guy,” I responded with a lengthy explanation for why I think a hunt for empirical support for macroeconomic causality—one way or the other—is a wild goose chase. If you disagree with my reasoning, please make a coherent argument to that effect. “Ludicrous” is not an argument.

        You’re correct that I haven’t laid out my argument for a lower, flatter tax curve. Just a warning, though: it’s going to be “abstract.” If abstract reasoning isn’t your strong suit, we should probably just call it quits.

        Shall we continue?

      • Snoodickle Says:

        I want concrete data.

      • Tevyeh Says:

        You’re messing with me, right?

        I can’t tell if you’re being flippant or just dense. It’s hard to tell with a liberal.

      • Snoodickle Says:

        Tevyeh is the new Chillingworth.


    • I think it’s already clear who won this debate (in which “your arguments are terrible”, “without making a single real argument”, and “virtually meaningless” mean “I didn’t understand and/or I didn’t listen to anything you just said”), but I will add this:

      Before this discussion, only one person on this blog had talked about how great he thought corporate profits were, and it wasn’t a conservative, or a caricature of a conservative; it was Snoodickle, arguing that it doesn’t matter if unemployment has been c. 9% for Obama’s entire presidency, because what we should really care about is these allegedly “record corporate profits”.

      Of course conservatism is not “all about making the rich richer”, far from it—so far from it that I didn’t even understand what Snoodickle was trying to say (in his original comment above) until Tevyeh rebutted it—but even if I thought it was, Snoodickle himself could audition for the part of his straw man as well as conservatism could.

      • Snoodickle Says:

        He’s back! Although only four people read this blog, if anyone else happens to stumble across this thread, they will laugh at you.

      • Tevyeh Says:

        Appeal to ridicule…yet another logical fallacy.

      • Snoodickle Says:

        I’ll tell you one thing I do appeal to, and is that hot college girls. I mean, seriously, if you could see the girls I get with, you would understand why my own stupidity doesn’t bother me a bit.

      • Tevyeh Says:

        I get it…you’ve got that “I’m so stupid I’m cute” thing going for you. Well, as long as you’re into the kinds of girls who are attracted to that archetype…

        I’ll help you with the obvious response:

        “Huh-huh…huh-huh…hey Beavis, he’s ‘into’ them. Huh-huh…huh-huh.

        “Yeah. Heh-heh…mmm…heh-heh-heh.”

        (If you don’t get the reference, then I really am getting old.)

      • Snoodickle Says:

        Ha ha ha! Joke’s on you, I’m the smartest lawyer in Ohio!

      • Tevyeh Says:

        And Moe was the smartest of the Three Stooges.

      • Snoodickle Says:

        So that would make you and Chillingworth Curly and Shemp. Congratulations.

  2. Tevyeh Says:

    I largely agree with the thoughts expressed in this post, but there’s a flipside: just how tolerant would the dean of Upsala College have been of a subordinate academic openly advocating a position contrary to the interests of the A. P. Smith Manufacturing Co.?

    I’d much prefer a national academic climate in which hundreds or thousands of moneyed interests compete for economic control of academia, instead of the overwhelming government control over the purse strings that we see today. Still, we shouldn’t entertain the delusion that such an academic environment would be intellectually “free.”

  3. Tevyeh Says:

    From the article: “…I’m not sure what “dynamism” means…”

    No kidding.


  4. […] called before for a “Separation of School and State” on the grounds that the education itself is different—and not as good, for the recipient or […]


  5. […] and study whether there’s a relationship between them.  This is difficult to do, as “Professor Tevyeh” explains, because the world is complex and there are a lot of confounding variables.  Some would say that […]


  6. […] Remember, if you pay taxes, you are sponsoring this event.  (If you pay taxes in Ohio, of course it’s an Ohio state school, but if you pay taxes anywhere else in the United States, remember that both public and nominally private universities today are largely funded by student loans from the federal government.)  This event is one more great argument for the separation of school and state. […]


  7. […] “Separation of School and State” […]


  8. […] Give Mr. Ploof some credit:  As he has phrased it, the question he raises already contains the germ of the answer.  He is aware at some level that if we want to know whether employers are discriminating on the basis of sex, we must compare not simply what all men and women earn on average, but must compare men and women all other things being equal. […]


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