Free Market U.

REVIEW SUMMARY
Focus. Free market capitalism
Industry. Education
Key. Academic proponents of free-market capitalism gain a foothold on the Gulf Coast.

At Florida Gulf Coast University in Fort Myers, every student who majors in economics and finance gets a copy of Ayn Rand's novel, Atlas Shrugged.

This isn't exactly the kind of required reading you might find at most colleges and universities. Although it was published in 1957, the book is relevant today because of its depiction of the individual entrepreneur's morally just struggle for profit against the government and a despondent society.

But FGCU now has a core group of a half dozen economists whose research supports the ideas of free-market capitalism, still an unpopular subject in most faculty lounges. They teach this material to more than 250 economics and finance students (one class is titled “The Moral Foundations of Capitalism”), organize lectures by leading thinkers, publish their research in well-respected journals and hold influential positions in groups that promote free markets.

Only a few other colleges and universities in the U.S. are known for their research on free-market capitalism, including Hillsdale College in Michigan and Grove City College in Pennsylvania. Other schools noted for their pro-capitalist bents include George Mason University in Virginia, San Jose State and Suffolk University in Boston.

“I'd like to develop a center for free enterprise,” says Bradley Hobbs, the professor of economics who is spearheading the effort. In 2009, Hobbs was named BB&T Distinguished Professor of Free Enterprise after former BB&T Chairman John Allison made a $600,000 gift to the university to encourage teaching about the contributions of free enterprise and individual liberty.

Despite the initial gift from the bank, Hobbs says it would take $3 million to $4 million to establish a free-enterprise center that wouldn't need to rely so much on annual grants or state funding. The money would allow the professors to rent space and hire staff. “I would love to be known as the Hillsdale of the South,” says Hobbs.

While operating on a limited budget, the economics department has come a long way since Hobbs joined the faculty as its lone economics professor in 1997. “We've scrambled for resources ever since,” says Hobbs, who has successfully garnered funds from the Charles G. Koch Charitable Foundation and the Apgar Foundation for faculty and student stipends.

FGCU is exactly where this kind of research can flourish, Hobbs says. Unlike most well established colleges that are populated by tenured left-leaning professors, there's no entrenched faculty at FGCU. Florida Gulf Coast University is the youngest of the state universities, welcoming its first student in January 1997. Today, the university has more than 12,000 students.

And it's located in one of the most entrepreneurial areas of the country that's less dependent on government. Still, Hobbs chuckles that as an FGCU professor he's a state employee. “It's one of the great ironies of my life,” says Hobbs, who comes from a family of entrepreneurs.

Giving up tenure
Hobbs is one of the rare professors who abandoned a tenured position at Bellarmine University in Louisville, Ky., to accept a non-tenured position at FGCU in 1997.

Although he left the job security of tenure, Hobbs saw an opportunity to help start a program from scratch in the Fort Myers-based university's infancy. “I wanted to do something more entrepreneurial,” he says.

Besides the chance to build an economics department that placed an emphasis on the free markets, Hobbs also had family in Florida. He grew up on Merritt Island, where his father owned and operated a pharmacy.

Through professional organizations such as the Association of Private Enterprise Education (APEE) and other free-market proponents, Hobbs recruited other like-minded professors such as Dean Stansel and Carrie Kerekes. Hobbs is currently the vice president of APEE, an organization of educators who believe in the benefits of the free markets and letting people achieve their own goals with minimal government interference.

Fact is, a campus of left-leaning professors can be a pretty lonely place for free-market proponents. “I wanted some people to write with,” says Hobbs, preferably young graduates who were eager to make their mark rather than be fixated on tenure. “I want to work with people who have the option to leave,” he says.

Hobbs is quick to note that students need to understand and debate free-market ideas, not simply agree with them. “We also need diversity of thought,” says Hobbs, whose own early leftist views shifted “from Marx to Hayek” later in his career. “The best debater is the one who knows the other side's argument better than they do,” he quips. “We hold students' feet to the fire.”

Hobbs says he doesn't believe scarce funding for the economics department has anything to do with his curriculum or his activities. The economic downturn has forced legislators and school administrators to trim spending across the board, he says. For example, the promise of matching funds for BB&T's $600,000 gift hasn't been fulfilled. “I'm not a conspiracy theorist,” Hobbs says. “It's a startup.”

Fundraising hopes
Besides the gift from BB&T, Hobbs has successfully garnered support from the Koch and Apgar foundations. For example, Hobbs uses some of that money to help students attend regional and national meetings of Students for Liberty, an organization that organizes conferences to discuss freedom. One FGCU student, Brandon Wasicsko, serves on the organization's national executive committee.

In addition, Gary Jackson, an economics professor and director of the Regional Economic Research Institute at FGCU, collects contributions for the economics program when he makes public presentations to chambers of commerce and industry trade groups.

But Hobbs concedes that fundraising for what he will call the Center for Free Enterprise Economics is not his forte. For example, the well-attended public lectures by leading academics and proponents in the field of free-market capitalism could be fertile grounds for finding donors. “I haven't turned it into fundraising, but I'd like to,” Hobbs says.

So far, the support Hobbs has received hasn't been local. “The support I get is out of D.C.,” he says.

Hobbs would like to move away from depending on annual grants and instead have a permanent endowment of $3 million to $4 million for the center. “It might be connected to FGCU, but we'll see what the donors want,” he says.

Leading research

Besides teaching courses on free enterprise, economics professors at Florida Gulf Coast University also are conducting research and publishing valuable information in leading academic journals on critical issues of the day. Three examples:

•Dean Stansel, associate professor of economics, recently co-authored a paper for the Reason Foundation that concluded that the tax code's mortgage-interest deduction is ineffective at promoting homeownership and distorts the allocation of capital in the economy because it favors taxpayers who itemize deductions. Eliminating the deduction would reduce excessive debt and lead to a healthier housing market in the future.

•Carrie Kerekes, assistant professor of economics, recently wrote in the Cato Journal that clearly defined and enforced property rights create incentives that lead to lower levels of pollution and an overall improvement in environmental quality. Kerekes concludes that secure property rights are preferable to regulatory policies in order to promote environmental quality.

•Nikolai Wenzel, a visiting professor from Hillsdale College who teaches free-market economics, is an expert on government constitutions and how they affect economic prosperity. For example, he recently examined how Japan and the Philippines adopted similar constitutions after World War II. Japan's economy flourished because the constitution there was sensitive to the local culture while the Philippines struggled under the Marcos dictatorship.