679. Why Does Vanderbilt Keep Winning?

Freakonomics Radio

This episode explores why Vanderbilt University stands out as a rare success in higher education, despite widespread challenges facing American universities. Chancellor Daniel Diemeyer discusses institutional neutrality, political pressures, and Vanderbilt’s strategic growth.

Key takeaways

• Vanderbilt's success is linked to its policy of institutional neutrality.
• The university has expanded strategically with new satellite campuses.
• It maintains strong financial health and avoids layoffs during crises.

Transcript preview

Hey there, it's Stephen Dubner. Before today's episode, a quick announcement. We are about to launch a new project, a video show that we've been working on for a while. You could think of it as an indie TV talk show on YouTube. We are very excited about it and we're looking for Freconomics Radio listeners who want to pre-screen episodes and share their feedback. We will select a hundred people to take an early look. If you are interested in being an extension of our production crew please go to the link in the show notes and sign up. We will have a lot more to say very soon about this new show. And now here is today's episode of Freakonomics Radio. Right now is a hard time to lead just about any institution and leading a university is particularly hard. You've got your campus protests, your financial pressures, including federal funding cuts. You've got legal pressure from the Trump administration, which contends that universities have by left-wing ideologies. And it's not like the American people are rushing to support you. According to Gallup surveys, public trust in higher education is near a historic low. A lot of university leaders have crumbled under all this pressure. Many have been pushed out. But some campus leaders are, let's put it bluntly, they're winning. Over the next two episodes we will talk to two of these winners. First up. My name is Daniel Diemeyra, I'm the Chancellor of Vanderbilt University. Vanderbilt is a major research university in Nashville, Tennessee, with about 7,300 undergraduates and 6,300 graduate and professional students. Its graduate programs in medicine and education are world-class. Its business and law schools are also very well regarded. On the undergraduate side, it's already highly selective and applications continue to surge. Vanderbilt is also expanding under Deremire with four new or planned satellite campuses. Even its football team, which is usually a laggard in the powerful southeastern conference, they've been winning big lately. Perhaps most strikingly, Deeremyer and Vanderbilt seemed to have dodged the federal government's ongoing assault on the broader university system. We're a little bit of an outlier on that and we have been able to deal with its situations quite well, but that is not typical. So today on Freakonomics radio, we ask, why? Why does everything seem to be going Vanderbilt's way? According to Deeremire, one key to their success, is their embrace of a policy called Institutional Neutrality, a policy that has made Dearmeyer one of the most polarizing figures in higher ed. Not everybody agrees with me, but my strong belief, and I think there's increasingly evidence now that is supplied almost on a weekly basis that points out that we have a problem. What is the problem in American universities and is institutional neutrality the solution? Let's find out, starting now. This is Freckenomics Radio, the podcast that explores the hidden side of everything with your host Stephen Dubner. scholar of management. At the University of Chicago he became a dean and then provost. It was at U Chicago where the modern doctrine of institutional neutrality was born. The University's Calvin report commissioned in 1967 and still famous in some circles said that quote the University is the home and sponsor of critics. It is not itself the critic. So what does that actually mean at a university today? We'll start with What problems were universities like Vanderbilt created to solve? Vanderbilt was founded about 153 years ago by Cornelius Vanderbilt, hence the name. We were founded by Vanderbilt, really with the explicit purpose to create a great university to bring together all the parts of a divided country, which of course was post-civil war. We were a great university, really with the explicit purpose to create a great university to bring together all the parts of a divided country, which of course was post-civil war. We were a great regional university, our nation, our nation. always has been the Harvard of the South which we have mixed feelings about and then about 25 years ago my predecessor decided we only be a great national university and we have been on that path over the last 25 years we are we are probably the best year in our history last year whenever we look at things like student demand fundraising research activity ability to attract talent we're in a very good place right now I have seen polls showing that seven and ten I'm not one of those seven. I assume you are not one of those seven? No, I'm not. Well, let me put it this way. I think there are real issues that need to be addressed. The fundamental purpose of the university is a noble purpose. It is about providing path-breaking research and a transformative education. And that is absolutely critical for the country. We should never forget that. There's plenty of evidence that universities deliver on these promises. also are problems that we need to address and that I think where some of the root causes that have led to the erosion of trust. Name the biggest problems to address? There is a general concern about affordability and whether universities prepare students for careers. That's something that is kind of bipartisan, but also questions about inequality. That usually comes from the left side of the political spectrum. And then there is from the right side of the political spectrum, ongoing concerns over ideological drift. intellectual monocultures, lack of viewpoint diversity, these are all different ways to talk about that universities have basically become politically biased to the left. What kind of relationship do you have with President Trump and his administration? Oh, we talk to everybody. We have great relationships with our mayor, we have great relationships with our governor, we have great relationship with our federal delegation. We believe that in order to have a positive impact on the political environment for universities, we need to be at the table. I think this was really validated this belief during the endowment tax. All right, let's talk about the endowment tax. In Trump's first term, he introduced a tax on the returns from university endowments. This was a small tax, just 1.4 percent, but in the second term, he turned up the heat quite a bit. I know you have spent time in DC on that issue. What was the outcome and how did you try to influence that outcome? I was in Washington every other week, sometimes alone, sometimes together with other university leaders. This was a proposal that came out of the House Ways and Means Committee. The highest tax would be 22% and then it would go down. The critical thing you to understand is endowment is accumulated philanthropy. This is like what people have done to support the mission of the university. So if you're taxing the endowment, you're taxing philanthropic intent. And so we spend a lot of a lot, of time trying to talk to members of Congress to just basically explain that this would have very negative consequences, especially on financial aid and especially on the research performing for universities. And we were able to, at the end of the day, we meaning a whole bunch of university presidents that were active in Washington. We have now two bands rather than four and at the highest is not 22 but eight. We're affected by the end of the end of the day. We're affected by the end of the end of the end. and it will have a material impact on university. Give me a general assessment of how research funding toward universities is flowing or not flowing right now. I did speak with a Vanderbilt professor who's in the medical school who likes you by the way. Good. He said that there's a lot of concern that NIH funding in particular is pretty bottlenecked. The Trump administration has plainly come after a lot of universities including major research universities in the Ivy League. You are a major research Research University too, and that takes a lot of funding. So tell me where things stand. Multiple things going on all at the same time. The battle would be in the Federal Administration and the Federal Administration and the Federal Administration and the Federal Administration and how it's just one example. So this is about a group of universities where there is ongoing conflict between the Trump administration and universities. That's one bucket. Then the second question is research funding overall. There were quite a few cuts post as part of the budgetary process. We ended up with appropriations. that actually increased NIH funding by about $300 million and as F went down a little bit but not dramatically so. And I think what that shows is that there is strong bipartisan support for research funding and that's great because that is the right policy. Then there are questions about the speed between grants being improved and money being spent. There's clear delays, I mean we see it. Is that because there were so many people left the NIH, you just have kind of, you know bottlenecks because of you know bottlenecks because personnel shortages. That's what we're being told. That needs to happen again because we can bridge some of the cash needs in the short term but again if this takes longer then it will have a material impact. Have you seen material impact yet? We're in a good financial position but that is not true for all universities. We're one of the few universities maybe the only one in our peer group. We have not done any layoffs or anything like that. But that is not true across universities. I mean there are some universities that have laid of a lot of a lot of a lot of a lot of a lot of people cuts in particular segments, which is a whole other conversation, or because of the general uncertainty and the financial strain that's put on universities. Defenders of this administration say that they are essentially restoring sanity to America. That's the argument, including to the university system that they argue, got way off the norm. Critics, meanwhile, of which there are many from different sides, but one central critique, especially when it comes to financial matters is that the Trump administration is a essentially running the biggest grift in American history, way too much self-dealing. Where do you come down overall as a political scientist? There have been problems. And the problems have manifested themselves in an erosion of trust on both parties, but has been catastrophic among the conservative segment of the electorate. The concern there, which goes back years, is that universities have drifted ideologically to the left that the left, that they're left. is lack of viewpoint diversity, intellectual monoculture, wokism, these are all different words that talk about the same thing. That is pre-President Trump and I frankly have seen it manifesting itself in different ways. That is a real thing, okay? We have a problem particularly in fields where I would say society reflects upon itself. Those are the humanities, the kind of qualitative social sciences, and topology, and part of the law school school school. and kind of adjacent areas. We need to address that and if we don't address that we will not regain the trust of the American public. It doesn't matter whether it's the Trump administration or anybody else in there. This is a serious problem. The underlying concern over the ideological drift, monoculture is a real thing and we as university leaders need to address that. That's what we need to do. That's our job and we need to get on it. The American Association of Colleges and we need to get on it. The published an open letter last year speaking out against the unprecedented government overreach and political interference now endangering American higher education. This was signed by hundreds of college presidents but not you. Why not? The way we always think about this is that we need to do the work of being clear about our principles and then have real conversations. I'm a little more skeptical that a big proclamation will do anything. My point of view is that, I want to be at the table and I want to do the hard work on our campus and I want to try to convince my fellow presidents and chances that there's a real issue that needs to be addressed. And if you're being perceived as the villain, politicians will attack you because that makes them the hero. That's the way this works. So you have to ask yourself honestly, the real issues and then how do we address them? There is a group of universities that think there's nothing wrong, that everything's great, that everything great, that everything's great, that everything's great, and everything's great, that this is entirely an attack by an authoritarian or quasi-authoritarian government and we need to all stand together and resist. I disagree with that position and I've made that clear in public before. Let's get back to what you have described as the political drift of universities in the US over the past couple decades. How would you think about the causes and especially the consequences of that drift? The causes are complicated. I think the way you want to think about this is that most faculty members is that most faculty members are motivated by doing their work. You're a biochemistry professor and you want to be in the lab 14 hours a day and do your work. And you may trend to the political left. But in some sense it doesn't matter because biochemistry is really not about political issues. And secondly, that political identity is pretty moderate and it's not part of who you are. You choose between Democrats and Republicans on the ticket for presidential. you tend to vote Democrat. Fine. Then there is a group on campus and their point of view is that our world is structured fundamentally in an unjust fashion, that it needs to be understood in terms of power dynamics or oppressor-oppressed structures and that is critical to who they are. It's critical to their work and they talk about it of putting their teaching and research in service of this political agenda. They have very often taken over professional associations in this field and the reason why that's important because there's consequences for publication, awards, and of course curricula, you know what's happened in syllabus, including what happens in PhD programs. And then on the right, the right is not the right word here necessarily. There's some people that are conservative but it's also like a kind of classic free speech kind of John Stewart mill advocates. but they tend to be isolated and scattered and they're like three in the law school and two in economics and a bunch in the business school but they're not coordinated they're not organized and so as a consequence of that you have a very motivated well organized group that has been able to act in concert and universities just have been drifting so unless you had a president like my boss at University of Chicago the great Bob Zimmer was of course a free speech advocate on that universities will drift because many university presidents or their boards don't want any drama or they may not want to deal with these issues or they have different agendas for whatever reason and so they cut deals so you do this over 20 years and the shift starts drifting in the bad direction. Okay so that was a very good answer to the causes the consequences I'm curious to hear you talk about especially when I think about Vanderbilt and I think about going back to the mission of Cornelius Vanderbilt this desire to start a university to unite people after the civil war. The universities in this country have contributed not only to the innovation economy and the economy generally, etc, etc, but there have been huge pro-social contributions. Economists always like to talk about positive externalities and there aren't that many but education really is one tends to make everything better. So I'm curious how much you think that part of the university accomplishment or mission has been damaged. When we talk about a transformative education, right, we mean, right? that the students acquire skills on a