Austrian Economics Along the Potomac

  • Public-Policy Reform
  • 1980

A center devoted to market-based economics and philosophy, called the Austrian Economics Program, was established at Rutgers University in the late-1970s with a grant from philanthropist Charles Koch. It was promptly squeezed by a hiring freeze. The president of George Mason University, just across the Potomac from Washington, D.C., invited the program to relocate to his campus in 1980. There, it eventually became known as the Mercatus Center (mercatus is Latin for “marketplace”), and with steady donations from the Charles Koch Charitable Foundation it grew into a very active academic hub and economic think tank.

More generally, a stream of Koch support that eventually totaled tens of millions of dollars was crucial in turning the George Mason economics department into one of the best in the nation. Two GMU economists have been awarded Nobel prizes: James Buchanan in 1986 and Vernon Smith in 2002. Public-choice theory and other concepts used to assess government policies today have been honed at the northern Virginia institution.

In 1985, George Mason University also became home to the Institute for Humane Studies, another quietly influential product of long-term Koch support. With online instructional materials, lectures, debates, seminars, and scholarships that help students pursue further studies, IHS now trains hundreds of thousands of students in principles of liberty and economic success. Over 1,700 of its alumni have become professors, and they will teach an estimated 10 million students over their careers. Some will also shape public policy through their research.

The Charles Koch Foundation has greatly expanded its giving to higher education over the last decade. “Currently we’re fortunate to support over 350 programs, and over 250 colleges and universities across the country,” says John Hardin, director of university relations at the foundation. Grants underwrite everything from guest lectures by leading scholars to special student seminars, from course-development assistance for faculty to student research fellowships.