Getting Out the Word: Alternative Research, Teaching, and Outreach

0:00Good afternoon, everyone. It's a great pleasure to be here with you at the Mises Institute to talk about how we get out the word. I noticed in beginning his luncheon speech, Lew Rockwell mentioned that Joe Salerno and Gary North had stolen some of his thunder. Well, Rockwell proceeded to do the same to me by stealing quite a bit of my thunder from what I was going to talk about this afternoon. But I'll see how I can do. As Doug mentioned, this is a talk about getting out the word. So you've heard quite a few talks already this weekend presenting some of our radical alternative perspectives on current events, on the causes of the economic situation we're in, what to do about it, and so on.

0:47So take it for granted or stipulate for the purposes of discussion that we have a viable alternative perspective. But it is, as the title indicates, or my subtitle indicates, it is an alternative perspective. So the Austrian position on the business cycle, libertarian, social and political theory more generally is clearly not in the mainstream of American or world political, social, economic discourse. You know, what do we do about that? How do we change things? How exactly do we educate? How do we communicate? How do we persuade? Right? We have great ideas. We have the great legacy of the Austrian economic tradition that has been bequeathed to us. It's a living, active, evolving tradition.

1:38We have many great writers and thinkers and scholars and teachers, but we cannot assume that these good ideas will sort of sweep the field on their own. Right? Ideas matter, but Actions are required as well. We have to do something to try to get the ends that we seek. It reminds me of the story of the religious man who wanted to win the lottery, and he prayed every day without ceasing for that one thing and that one thing only. Every day he would say, oh God, please, please let me win the lottery. It's all I seek in this life. If you would just let me win the lottery, I would have peace and happiness, fulfillment, and Tentament. He prays this day after day after day. And one day he's out walking and the clouds begin to move.

2:28The clouds part and there's a bright light and a booming voice coming down from the heavens saying, Jerry, meet me halfway. Buy a ticket. So we've got to meet people halfway, or at least part of the way. How can we influence, for example, academia? How can we spread the ideas from our research? How can we increase awareness of Austrian business cycle theory within economics departments, for example, not to mention the media and so on? How do we spread the ideas of Mises and Hayek and Rothbard and others among scholars, among should we sort of work within the established institutions of scholarship, the established universities and research organizations and so on, seek to infiltrate them as it were, seek to shape them, seek to push them in one direction or another, or should we build up our own alternative parallel institutions and sort of bypass or outflank the established prestige universities and institutions?

3:46How do we influence the next generation in our teaching? We have many skilled and accomplished teachers of Austrian economics. Do we try to place them in established colleges and universities? Do we try to write textbooks and sell them to mainstream institutions and so on? Or do we again try to set up our own alternative set of institutions for spreading the word to the next generation? Do we want to sort of complement or do we want to supplant the establishment? That's research and teaching. What about outreach to the lay public, to practitioners, to business people, to journalists and so on? What do we do?

4:32Do we try to get on CNN and write in the New York Times? Do we run for public office or do we seek out alternative mechanisms, the alternative media, social media, new networks and so on? So in research, in teaching, and in outreach, what do we do to try to have an impact? Now these are not easy questions with obvious answers. And these are not generally, with some exceptions, not generally matters of what the Austrians would call a priori theory, but rather questions of wisdom, practical judgment, and so on. But I want to suggest that there are a few things we can say in general about this problem and give you some examples of some different ways that we might try to put some of these solutions into practice.

5:24So I'll start by referring to the fields of industrial organization and business strategy. When I took my PhD, one of the fields in which I was formally trained and certified was what we call industrial organization or industry studies. It's a well-developed field in many courses and journals, both college texts, graduate texts, and also managerial-oriented books on strategy and competition. Well, we know a lot about how firms compete with, how they interact with their rivals. For example, a lot of this literature has looked at how entrance, how upstarts, new firms seeking to get into an industry or a sector can compete with large established dominant incumbents.

6:18Incumbents would prefer to keep new people out, to keep new competition out of the industry. And incumbents use a variety of tactics to create what economists call entry barriers. Those could be government grants of monopoly privilege, including intellectual property protection. They could be economies of scale, customer loyalty, upfront capital expenditures, and so on. New entrants, on the other hand, seek to take on or to subvert or to go around the established players through innovation, right, by introducing better products, newer products or by producing the same products at lower cost, with better technology, with new distribution mechanisms, and so on. Maybe charging lower prices or targeting particular audiences. There are lots and lots of strategies that firms can use to try to get a toehold in a market like this. This characterizes what the great economist Joseph Schumpeter called creative destruction.

7:26What Schumpeter described as the perennial gale of creative destruction is the process by which new technologies, new firms, new players in different markets seek to supplant the established incumbents. Now, naturally, incumbents do whatever they can to resist the actions of these entrants, right? Through aggressive pricing or advertising or marketing and distribution or trying to to lock up particular suppliers or retailers through exclusive contracts and so on. Now, assuming they aren't employing the machinery of the state to try to keep rivals out of the market, there's nothing obviously illegal or unethical about this kind of aggressive behavior. One of the lessons that we get from looking at history and thinking theoretically about what kind of strategies might work for entrants and incumbents is that entrants rarely prosper by taking on the incumbent head-to-head. Incumbents rarely prosper through direct head-to-head competition with an established dominant incumbent. Rather, successful entrants tend to employ a niche strategy or some kind of outflanking strategy by going through or beside the incumbent

8:46rather than trying to topple the incumbent off of his perch. Lots of examples. You know, The technology sector is a great place for examples. Think of Microsoft supplanting IBM as the dominant maker of computer operating systems, not by producing mainframes, but by producing what in the early 80s was considered a sort of a niche product, a fringe product, the personal computer. Who in his right mind would want to own one of those? So by producing an alternative product that ended up doing the same things much more effectively Microsoft was able to overcome the dominant players of its day, IBM and many other digital and Wang and other large hardware makers.

9:34Think about Google taking the place of Microsoft in the 2000s as the dominant player in the technology field, not by producing desktop operating systems and a full-fledged office to compete head-to-head with Microsoft but by developing an alternative revenue model in the search space by revolutionizing ways that people make money from electronic commerce, from doing business on the web, etc. Again, you can think of Google's strategy as going around Microsoft rather than trying to do exactly what Microsoft did and doing it better. Even think of Walmart, right, which took on in the 1960s and 70s the dominant retailers of its day, Montgomery Ward and so on.

10:19Again, not by competing, not by putting in stores across the street from the incumbents, but by targeting a different demographic, right? Low-income consumers in rural, underserved communities and eventually reaching the place where it could, where it replaced Sears and Ward and so on. A less sort of sexy example might be Nucor Steel, which is now the US's largest steel company taking on US steel and the other incumbents by introducing a different technology, so-called mini mills that are smaller and more specialized using scrap metal as input, which the incumbent firms were not effectively doing. So going around the establishment tends to work better than taking on the incumbent head-to-head.

11:10What about our industry? What about the industries of research, teaching, outreach, the industry of academic work, of scholarship, of education? What lessons can we learn from industrial organization and strategic management theory that might be useful to us here? Well, let's take research, teaching and service in turn. Let's start with kind of the status quo. Well, in research, it's pretty obvious that the problem is, there is too much of it, and what is done is typically of pretty low quality, okay? There was a very controversial piece that ran in the Chronicle of Higher Education this past summer in June. It was titled, We Must Stop the Avalanche of Low Quality Research.

11:56And there were five authors representing a variety of economic disciplines, Disciplines, Natural Science, Humanities, Social Science, and so on, arguing that, quote, the amount of redundant, inconsequential, and outright poor research has swelled in recent decades, filling countless pages in journals and monographs. And they pointed as evidence to the number of journals and the number of journal pages, the number of authors in journals, and declining rates of citations to articles in journals. And they said, these authors went on to say, quote, instead of contributing to knowledge in various disciplines, the increasing number of low-sided publications only adds to the bulk of words and numbers to be reviewed. Even if read, many articles that are not cited by anyone would seem to contain little useful information.

12:46This avalanche of ignored research has a profoundly damaging effect on the enterprise as a whole. Not only does the unsighted work itself require years of field and laboratory or library research, it also requires colleagues to read and provide feedback, as well as reviewers to evaluate it formally for publication. Then, once it is published, it joins the multitude of other related publications that researchers must read and evaluate for relevance to their own work. Reviewer time and energy requirements multiply by the year. The impact strikes at at the heart of academe. You know, I think this assessment is generally on target, certainly for the fields that I'm closest to. You can ask most scholars in a field like economics, you know, how many journals, how many journal articles do they actually read from front to back?

13:39How many journals do they subscribe to for the purpose of actually reading the articles when they come out rather than having them to display on the shelf? Surprisingly small numbers. In this particular paper, the authors, I think, did not hit on exactly the right solutions, because they did not identify the heart of the problem, which is government funding. Think of how much the research university establishment has swollen, certainly in this latter half of the 20th century. There are simply too many universities, there are too many institutes, too many research faculty, too many granting agencies, too much research money, and so on. Now this sounds surprising to university professors who think that they're in a climate of extreme financial austerity and there are never enough research funds to go around.

14:32They're always fighting and struggling for the next research dollar. But again, when I say there's too much research, I mean relative to some notion of how much research there should be and would be in a free society, not relative to how much research university professors would like there to be. And, Lew already mentioned this in his talk, you know, the amount of, and he's mentioned in other talks too, the amount of sort of federal direct and indirect subsidy for higher ed is just astonishing, particularly at the so-called private universities, that many of the so-called private universities, Yale and Stanford and Chicago and so on, once all sources of federal, state and local government funding are taken into account, research grants, student financial aid and so on, easily get 60-70% of their budgets from government.

15:27And that's often more than nominally public universities receive in government assistance. So the whole higher ed establishment is almost completely a servant of the state, of government, at least in terms of where its funding comes from. We certainly wouldn't expect a system like that to produce high-quality research, right? I mean, in a sense, this is sort of a miracle that any good research gets done at all under those kind of conditions. What about teaching? I mean, there's sort of a growing backlash against overcrowded university classrooms that are staffed by under-qualified faculty, that are uninspired curricula, and so on. Students attend college not because they think they're going to learn much of value, but because they see it, rightly or wrongly, as a necessary credential to get into the workforce.

16:22And even that credential may be less valuable going forward than it has been in the past. And of course students want to party and meet members of the opposite sex and go to sporting events and so on, but it's not clear that going to an established four-year college Peter Wood, who heads the National Association of Scholars, had an interesting piece last year. He described it this way. He said,

17:09and Self-Satisfaction. On most campuses, mediocrity can rightly pride itself on being a whole lot better than the conspicuous dreadfulness of a handful of professors who dedicate themselves variously to the nine muses of bad teaching. Boredom, mumbling, disorganization, confusion, forgetfulness, stridency, PowerPoint, textbook and vacuity. I see those around me every day at my university. He's actually talking more about, in this particular piece, he's complaining about or talking about the increasing use of sort of non-tenured adjunct temporary faculty at universities and colleges as a cheaper alternative to full-time tenured faculty.

17:55And many faculty are concerned that if this trend continues, eventually there won't be any need for full-time tenured big shot professors. Most of the teaching can be outsourced to lower cost, hired labor, maybe over the internet, from India or something like that. But don't universities at least challenge and enlighten students by exposing them to alternative points of view, by raising their consciousness and so on? Isn't education really all about diversity? So a lot of critics, critics on the right, have written a lot about problems with university ideology and, you know, but I want to, you may think that college campuses at the US are, you know, dominated by conformity and narrow rigid ideology, but I want to assure you that that's not true.

18:51You might think the typical professor is sort of a Birkenstock-wearing, bike-riding, Prius-driving, New York Review of Books reading, granola-type person, but I assure you that all professors are not sort of left-leaning social democrats. At our campus, that's certainly not the case. They do occasionally like to hear from the other side. They like to hear from the extremes. Last year I saw this announcement come across my desk that the chairman of the U.S. Communist Party was going to speak on campus, you know, thus exposing students to the other point of view. You have socialism at one extreme and communism at the other extreme, and the full range of opinion is covered.

19:38Now actually what I'm more interested in today is not so much the ideological issues, but But more kind of the structural issues, how higher education institutions are organized and governed, their size and shape and scope and mission and so on. Fortunately we have a lot of, we have many new entrants into the game, in teaching and in research, you know, we have things like wikiversity for example, which is a Wikipedia style online instructional resource with materials and readings and lectures and so on. We have Academic Earth as a portal to online courses offered at established major universities.

20:27Of course you have TED. Many of you are familiar with the TED Talks. There was a very nice piece in the magazine Fast Company last month on TED essentially She's saying, you know, if you were going to start a top university today, what would you do? You'd bring in the best minds to speak on topics in which they are experts. You would deliver it online at low cost. In other words, it would look nothing like Harvard or Princeton or, you know, the University of Michigan or whatever. It would look like TED, right? And here at the Mises Institute, we have developed our own alternative teaching platform. Besides our regular student conferences, in particular the Mises University, we also have the Mises Academy, which Doug mentioned, where students can sign up for online short courses on a variety of subjects in economics and political theory and so on.

21:24Short courses, longer courses, these are not degree-oriented. It's not a degree-oriented curriculum, at least not yet. And it doesn't try to present, to duplicate, the standard four-year curriculum at a mainstream college or university, and why would it? In fact, if you think about these entrants, potential and actual entrants to the academic marketplace, one thing that characterizes them is variety or heterogeneity or real diversity. Not ideological diversity, but organizational and structure and managerial diversity. Why should every academic program have the core curriculum and stretch out over four years and a certain number of hours per course and a certain kind of examination and so on?

22:16Why must we have conformity within academia? Academia. In fact, you would expect in a free market to have a lot of experimentation, a lot of variety, as entrepreneurs seek to create and discover new techniques, new models for content, for delivery, for distribution, and so on. I mean, you know, part of the challenge in discussing education is that most people think of education as sort of a homogeneous blob, right? Everyone has a right to education. What does that mean? Does that mean primary school only? Does it mean primary and secondary school? Does it mean college? Does it mean a four-year college education? What about a two-year education?

23:02Does it mean Greek and Latin and the humanities, or should it be more vocationally oriented? Should it be easier or harder? Should it be longer or shorter? Should it be standardized or should it be up to the students to design their own curriculum? Who knows, right? Ex-ante, we have no way of saying what the model would be and we certainly wouldn't expect there to be only one model if we had a genuine free market for education. My guess is, my intuition is, we would have many, many different types of institutions with different shapes, colors, sizes, you know, and smells, right? And that's exactly the way it should be, just as we find with automobiles or computers or whatever.

23:48We don't have simply one product. We have a variety of products. One of the challenges in thinking this through is that the typical mindset within the establishment is one in which education is one thing and it's done one way with one set of outcomes and metrics and so on. There was a very influential piece in 2007 in the New York Times, almost, it was pitched as sort of an expose of the University of Phoenix and for-profit educational institutions more generally. Even the Times headline gave you a pretty good hint of where they were going. The headline was, Troubles Grow for a University Built on Profits. That's sort of per se suspicious.

24:34This was right around the time, shortly after the New York Times was in all kinds of trouble for, you remember the Judith Miller scandal, you know, I was thinking about, you know, what about a headline, you know, troubles grow for a newspaper built on profits, you know, you don't see many of those in the stories about the New York Times. But what was interesting about this article is not so much the conclusion, which predictably denounced online for-profit education and Phoenix in particular, but what the Times thought was wrong with it. And the article really didn't discuss the content of the courses as much as the structure of the university, right? So the specific complaints about the University of Phoenix that were listed in this article include that it, one, relies on part-time contract faculty, two, uses an accelerated schedule in which students graduate in about half the time as traditional programs, three, that it does not have an expensive campuses, but locates in suburban office buildings near

25:33highways. Four, that it exploits economies of scale by centralizing course design using a standard syllabus for each course at all campuses. And five, that it relies heavily on online instruction with reduced in-class interaction between students and professors. Now, none of this strikes an organizational or managerial scholar as in any way odd or suspicious. Right? I mean, why not experiment with those alternatives? Right? Maybe that's a better structure than the dominant one. But in other words, you know, economists always, mainstream economists, always very worried about monopoly. Okay? And it's important to have, you know, free and open competition in a level playing field, and let the little guys in to compete with the big guys when they're talking about industry.

26:22But when it comes to education, oh my goodness, heaven forbid that a smaller guy should come in and try to build a better mousetrap. Try to do it a different way from the establishment. Now, it's true that the University of Phoenix in particular and some other for-profit institutions are certainly not above working the system. There's been a lot of complaints that they sort of manipulate the financial aid establishment to get government grants for their students. I certainly wouldn't condone anything like that. And I'm not making a statement about the University of Phoenix per se, that specific institution, but more about the model, right? I mean, in short, one of the professors quoted in the New York Times piece, Columbia University education professor was complaining about their business degree.

27:07He said their business degree is an MBA light. You know, you can imagine sort of saying this with a sneer to the New York Times reporter. He says, I've looked at their course materials, it's a very low level of instruction. Well, I mean, compared to Columbia University, yeah, it probably is a low level of instruction. You know, a Toyota Corolla is not the same thing as a 7 Series BMW. Okay, but so what? I mean, does everyone have to drive a BMW or go without a car? To conclude, let me leave you with... Oh, well, sorry, I forgot to plug my book. Heaven forbid I should forget that. No, I did want to mention briefly some alternative sort of research and publication institutions.

27:57The Mises Institute, as you know, not only publishes academic journals and distributes academic articles, Publishes a number of original scholarly books, like my recent book, The Capitalist and the Entrepreneur. Republishes many older works that have gone out of print. Lew mentioned The Law, Bastiat's The Law, which has been reprinted. And you can find, of course, thousands of full-text important contributions to the scholarly literature on Mises.org, available online for free. I actually have another, this book came out late spring early summer and it retails downstairs. The list price is $15 but it may be on sale. If you want to, if you buy one this weekend I might be able to get you an autograph. I know some people. I have another book that has just come out, an edited volume called The Elgar Companion to Transaction Cost Economics, published by Edward Elgar Elgar, which does a number of scholarly books in economics and business, and it's about the same size as the capitalist and the entrepreneur, and Elgar has priced it at $185.

29:05So the capitalist and the entrepreneur, you can not only get it for $15 or less, you can actually read the whole thing online for free as a PDF on Mises.org or at the Scribd site. It's a different model for dissemination, right? It's very much like the discussions about intellectual property that we've been having. Getting out the word is more important to me than any royalties that I might make on a $185 book. And once I buy one and a couple of libraries buy one and my mother buys one, that's going to be pretty much it on the sales of the Elgar Companion. The journals tend to serve a sort of a gatekeeper function. The prestigious academic journals, you know, getting an article accepted by the journal is kind of a stamp of approval for the article.

29:56But that gatekeeper function, like so much else, thanks to the web, is becoming increasingly democratized. Right? There are so many more ways to get both scholarly and popular communication out that the role All of the gatekeepers may, it's not clear, but may become less important, that scholars and students are just as likely to take seriously and read something that appears in a blog or a wiki or a non-peer-reviewed article than they do something that is in sort of the peer-reviewed scientific literature. To conclude, I just want to refer you to Murray Rothbard's writings on strategy, which are are extremely important. Rothbard talked about the importance of having both research and teaching programs, not only to educate those who are hearing the ideas for the first time, not only to spread new ideas, but also to encourage and to develop the sort of hardcore of the movement itself.

31:02And these kinds of activities, research in the development of new ideas, education of various strata of society, including members of sort of the hardcore movement themselves, along with fellow travelers and the curious. That is an essential part of the educational mission at the Mises Institute and other organizations like it. And that's why we're so grateful to you, our supporters, for providing the resources that allow these alternative institutions to proceed. Thank you very much.