Hey there. It's Stephen Dubner. Before today's episode of 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 Frekenomics radio listeners who want to pre-screen episodes and share their feedback. We will select 100 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 Frekenomics 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 become captured 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 D'Amira, 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 Deermeyer 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, Deermeyer and Vanderbilt seem 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 the situation quite well, but that is not typical. So today on Frekenomics Radio, we ask why? Why does everything seem to be going Vanderbilt's way? According to Deermeyer, one key to their success is their embrace of a policy called institutional neutrality, a policy that is made Deermeyer 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 Frekenomics Radio, the podcast that explores the hidden side of everything, with your host, Steven Dubner. Daniel Deermeyer grew up in Germany, but has spent most of his academic career in the U.S. as a political scientist and a scholar of management. At the University of Chicago, he became a dean and then provost. It was at UChicago 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 "the university is the home and sponsor of critics. It is not itself the critic." So what does that actually mean at the University today? We'll start with what Deermeyer says is an important and often overlooked question. 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 regional university. Our nickname always has been the Harvard of the South, which we have mixed feelings about. Dan, about 25 years ago, my predecessor decided we wanted to be a great national university and we have been on that path over the last 25 years. We are very happy and where we are. We've had 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 7 and 10 Americans believe the higher education system in the US is headed in the wrong direction. I assume you are not one of those 7. I don't know why 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, but there 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 the 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. Then there is from the right side of the political spectrum ongoing concerns over ideological drift, intellectual monarch cultures, lack of viewpoint diversities. 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? We talk to everybody. We have great relationships with our mayor. We have great relationships with our governor. We have great relationships with our federal dedication. 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 Endowment. 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? Yeah. So I wasn't washing every other week, sometimes alone, sometimes to get with other university leaders. This was a proposal that came out of the House Ways and Means Committee. The highest tax would be 22 percent, and then it would go down. The critical thing here to understand is endowment is accumulated philanthropy. Okay. 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 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 profonding 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 it's not 22, but eight, but we're affected by the endowment tax, 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 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 batter would be in the federal administration and Harvard is just one example. So this is about a group of universities where there is ongoing conflict and battle between the Trump administration and universities. That's one bucket. Then the second question is research funding overall. There were quite a few cuts posed as part of the budgetary process. We ended up with appropriations that actually increased NIH funding by about 300 million dollars, 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 with being grants being improved and money being spent. There's clearly lays. I mean, we see it instead because there were so many people left the NIH. You just have kind of 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 have 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 off a lot of people because of funding.
cuts and 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 essentially running the biggest grift in American history way too much self-dealing. Where do you come down overall as a political scientist? They 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 there is lack of viewpoint, diversity, intellectual monoculture, vocism, these are all different words that talk about the same thing. That is free 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, sociology, parts of the law 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 universities 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 Universities 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, okay? 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 chancers that there's a really issue that needs to be addressed. If you're being perceived as the villain, politicians will attack you because that makes them the hero. That's the way this works. You have to ask yourself, honestly, are there real issues and then how to address them? There is a group of universities that think there's nothing wrong, that everything's great, and that this is entirely an attack by an authoritarian or quasi-authoritarian government, 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've described as the political drift of universities in the US over the past couple of 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 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. 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, the presidential day, 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 pressure or pressed 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 it has consequences for publication, awards and of course curriculum. What's happening in syllabus, including what happens in PhD programs and then on the right, the right is not the right word you're necessarily. There's some people that are conservative but it's also like a kind of classic free speech kind of John Stuart Mill advocates. They exist but they tend to be isolated and scattered and they're like three in law school and two in economics and a bunch in the business school but they're not coordinated, they're not organized. 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. Unless you had a president like my boss at University of Chicago, the great Bob Zimmer was of course a free speech advocate that is clear about that and has an aligned board 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. You do this over 20 years and the shift starts drifting in the bad direction. 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, et cetera, et cetera, 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 that the students acquire skills on a particular area, their majors or whatever the field that they're studying, that they're ready for meaningful career and then the third thing we think about that they are prepared to be citizens and leaders in a free and democratic society. Those are usually the way we think about a transformative education, at least in Vanderbilt. The problem is that there's a subordination of scholarly standards under an ideological agenda that manifests itself in research and in teaching. I'll give you just two examples of that that I thought were both very striking or I'll give you three actually. One was look at a statement made by the American Anthropological Association where they basically say the following, it is the professional standard anthropologist to put their research and teaching in service of dismantling institutions of colonialism. So basically saying to be a proper anthropologist, you have to be aligned with the decolonization agenda. It's a striking thing to say, okay. Why? That may seem obvious to you but why? Well decolonization is a particular ideology, right, is a particular content. It is not the definition of anthropology. It's an ideological agenda. The second example is we have seen the studies known on syllabi that we can do now because we can use large language models. So there was a particularly striking example done by two professors at Claremont. They looked at syllabi and they're basically pick three areas. Criminal justice is a Palestine abortion. And then they ask basically, what is the relevant kind of different point of views on that? Well established in literature and all these point of views actually reflect an undergraduate curriculum. So the example that they picked was this book, The New Jim Crow, which I'm really simplifying there, but makes the argument that the mass incarceration after the war on drugs basically was intent and had the conspense of suppressing African-American communities. Very controversial book. Of course, there was back and forth and people criticized it. That's what the academy should do. No problem. Great. That book in there because it's important to understand to take a provocative contribution there and you want to debate it. But now you have to have the criticisms as well. What they found is that 94% of the syllabi only had the book, but none of the criticisms. But would actually pair it with even more kind of radical points of view. So if you are now taking a class on criminal justice as an undergraduate, you believe that the state of the field, but it's not the state of the field. It's a particularly biased view of the field. There are a lot of academics who had argued that that's not an ideological position they're taking. It's just a factual one that racial discrimination and policing and law enforcement in America has a long and deep history and it's a bad thing and therefore people need to be educated about it. And we don't necessarily need to spend time defending the previous status quo or looking at modern critiques of the current argument. What that's an assertion, right? That's an assertion about facts and our job is to now kick the tires on that and see is that true and to what extent are the mitigating factors and once you do a proper statistical model and you control further factors, do these things still turn up? I mean, that's what will work means, right? So this widespread embrace of a certain kind of text, where does that come from in your view? Is it pure pressure? Is it the chilling effect?
we hear about, is it? Maybe more of a natural expression of the kind of people who become university professors? We have certain disciplines now that are basically looking at the world from one point of view only, is the belief that our world is structured in a fundamentally unjust fashion and that these structures of oppression need to be dismantled. That's the position. Then it manifested itself in multiple different ways. Number one, the free speech crisis that we had a little over 10 years ago and I lived through a year as a Chicago. The way this was manifested is that we had the speech codes and we had the shouting down of speakers that were not in line with this point of view or were challenging that. So it's so-called controversial speakers. That's better now. It's not done, but it's better now. Why? Because we had clear principles, Chicago principles. It wasn't so easy anymore. It wasn't free anymore to basically cancel speakers. So that was chapter one. Chapter two is institutional neutrality. We had it since the late 67th, Chicago had it in the Calvin Report in 1967, but it came to the forefront really after October 7th because the debate there was what the activist group wanted us to do was to take a position, which is to denounce Israel genocide, divest, cut ties with vendors that had any connection with Israel. That's much better now too because we had a clear principle institutional neutrality and there was this pressure that came from alumni Jewish community that basically said, "Look, universities, you got to get out of this position taking game." And the political pressure probably played a role. The third chapter knows what happens in the classroom, what happens in research journals, what happens in the practice of research and teaching. That's a much harder problem, but all these three things on manifestations are think of the same problem. Let's talk about you a little bit more in your research. So you're a political scientist by training and the work of yours that I've always found, especially interesting, although I haven't read all your work. Well, we have to fix that. It's riveting. Okay, I'll try to read some more, but the work I do know is around reputation and reputational management. You write about moral outrage. So to me, it seems like you are made for these times. I'd love to hear you apply your research lens to your administrative job now. I have done multiple things in my life, but I think the two areas that I'm most known for is the one you just mentioned. So that's about understanding reputation, particular crisis settings, the relationship between companies and society. And of course, it's just point out that applies to university just as much. The second area of my research, it was on studying institutions. So I was trained as an applied game theorist and then did a whole bunch of empirical work as well. There, I tried to understand how institutions work. So I was particularly interested in political institutions, legislatures, coalition governments and so forth. And what you learn there is that the details really matter. Setting things up the right way can make a big difference. And you have to be very, very conscious on that. Now, neither one of these areas, when I was a researcher, I had any inkling that this would be related to my later work as a university leader. And of course, I didn't know I would be a university leader, but even being in those roles, I think it was pretty clear that the reputation crisis stuff was immediately valuable. Look, reputation for university is absolutely critical. When families make a decision where they send their sons or daughter for university, it is one of the biggest decisions they will make as a family. For many people, that's the second biggest investment that they will make after their house. And very often, they will have no personal experience with the university. And even if they're alums, they were alums 30 years ago. It's a different place. So reputation is really critical. It's critical for applicants, for hiring great faculty. It's critical for fundraising. It's critical for attracting research grants. So everything that is driving this success of a university is driven by its reputation. Having studied reputation and moral outrage, why do you think that the Palestinian cause became a flashpoint on so many US college campuses? Very, very good question. We had underneath already some tensions that were kind of ready to explode. That had to do with a certain radicalization of parts of students and also parts of the faculty. And then the question is what's the trigger? October 7th, what particularly horrific event. And as you may remember, there were very quickly statements by students at Harvard and so forth. I would say putting the blame more on the Israeli government that created a lot of drama at Harvard. Usually when you have student protest or activism, it's the students against the administration. That was not true in this case. You had student groups against student groups or alumni group against faculty or faculty against faculty. The campuses were split in some cases ripped apart. That was different. And that I think created a tremendous amount of additional pressure and difficulty. I think many universities were not ready for that. There was mission drift, there was lack of consistency, there was lack of clarity. One reason I think why we got through this much better than most universities is because we had years ago thought hard about what is our purpose, what are operating principles. And then when the challenge came, we were basically ready to put them into action to apply them. We didn't have to think this through. Okay, so what is your purpose and what are your operating principles? The way we think about this is that the purpose of a great research university is to provide path-breaking research and the transformative education. That's what we believe. So we do not think that universities are political parties and they are not members of political or social movements. And this is something that you've become known for as a practitioner of institutional neutrality. Do you like that term? That's one of the operating principles. In order to have path-breaking research and in order to have a transformative education, you must have an environment of open inquiry where ideas can flow freely. And so we believe that there are three pillars on that. The first one, which we call open forums, which is about free speech, that's very similar to the Chicago principles. We had it actually very early already. It's not something that is new to Vanderbilt. We had already in the 60s. For example, we have a policy on campus that student groups and faculty can invite us because as they see fit, they don't have to be checked. In the 1967, our students brought Stokely, Carmichael, Storm, Thurman, and Allegginsburg all to campus at the same time. 1967 and Nashville. That must have been a fun night. It was interesting. Okay. So I was very young at the time, but that's a pillar that has been with us for a long time. Second pillar is the institutional neutrality piece, which means that universities, university leaders will not take positions on policy issues or political issues unless they directly affect the core function of the university. Right. But the university presence who do get involved with political statements say, well, everything affects the core mission of the university because we're teaching young people how to think about the entire world. So your response to that would be what? We wanted to teach how to think, not what to think. We want to create an environment where our faculty or students can take different positions on something and do the hard work of figuring things out. We don't want to tell them from the top. That's the right answer and that's not. If I give you an example, the DOPS decision on abortion. There are some universities that have said that this decision is inconsistent with the values of the university. That is not institutional neutrality. How would you think of a point of institutional neutrality on that? You would say we have people that have different points of view on the DOPS decision on campus, including among our faculty. For example, we have members of the law school that may have the following position. They may say abortion should be safe legal and rare, but it's not the supreme court that should decide that decision but Congress or state legislature. And they may say that Roe v. Raid was not decided correctly on judicial grounds. That's an argument that constitutional lawyers will make that is a well-established position among people in law schools. Now, I want that position to be debated. I'm not going to say from the point of view of the president you're wrong. You know, if you as a university president say this is the right outcome, then it's shield's debate. That is a real thing. Have you seen that in your academic career? Well, I was fortunate enough to be at Chicago and at Vanderbilt, so we're committed to institutional neutrality. But you're interacting with professors and researchers from all these other institutions. Oh, yes. Did you feel it from your peers elsewhere? Absolutely. Absolutely. You hear it from faculty kind of sort of voucher, you know, when they talk to you. This is particularly a problem for young faculty members that are not 10-year-old or for graduate students. It creates the sense of a party line or institutional orthodoxy that is a terrible thing to have at a university. The point of universities is to do the hard work. They're all about expertise. We really look into details and we have gone through a lot of process of learning and and research. We are certified as a
experts in a particular field, that's what entitles you to teach in a law school. Now, if I come in and, I say, the DOBS decision is inconsistent with the values of the university, I'm basically pretending like I'm a constitutional lawyer, which I'm not. I'm sending exactly the wrong signal to faculty and our students. So institutional neutrality is really about leaders. There's a separate question about what happens in research areas. But this institutional neutrality really needs to be understood as a restrained on university leaders, presidents, provosts, board members, but also deans, departments, shares, and so forth. You are giving three pillars we got to chew. The third one is Vanderbilt's commitment to civil discourse. We are a community that lives and learns together, that uses arguments, that uses fact-based reasoning, that has a commitment to listen to each other, that doesn't demonize each other just because we have a different point of view. That's more cultural thing. In addition to principles, you need to foster culture. We do an enormous amount of work on that with our students. And those three pillars together have really served as well as we were trying to navigate the last three years. Coming up after the break, how much a Daniel Deermeyer's perspective comes from his own history? There were landmines, there were fences that if you touch them, you're automatically killed by automatic machine guns. The whole thing was just horrible. I'm Steven Dupner and this is Frekenomics Radio, we will be right back. Deerbilt's campus sits a mile south of downtown Nashville. But on the day that I interviewed Daniel Deermeyer, that is not where he was. I'm in Munich today, Munich, Germany. What are you doing there? I attended a technology conference and then I had lunch with my mom earlier today. She lives right outside of Munich so it was a wonderful day for me. So you grew up in West Berlin, is that right? That's true. Okay, tell me about your childhood. Let's start with when you were born and I'm curious what your parents did for a living. I was born in '65. I think there are really two aspects of my childhood that were important to me that motivate me to this day. The first one was that I was a first generation student. I'm actually the first of my family to graduate from high school. My dad was trained as a tailor and then became a middle of the range moderately successful fashion designer. So not even so long but something much more moderate than that. And my mother did drawings for fashion magazines. That's how she met him and then she raised me and my sister, my sister's a beautician. There is really nobody in my close family that really had any academic inclination. So what happened to you? How did you become such an outlier? That's a good question. So I loved school right from the beginning. I was one of the kids that couldn't get enough. I couldn't decide between classics and history and physics and biology. So everything was of interest to me. And that really became then the goal to become an academic. And the second thing is where was born. So I was born in West Berlin, the divided city. We all know it from a John Le Carré novels and the wall and all of that. And what was formative as a young person was the experience of living in a free society right next to a totalitarian state. And this was a nasty border. People may not remember this very well, but the wall of course went right to Berlin. There were landmines, there were fences that if you touch them, you automatically killed by automatic machine guns. There were German Shepherd dogs, AK40. And of course it was a border that was not intended to keep people out but to keep people in. So there were many examples of people trying to flee. East Germany, tragic stories, stories of incredible heroism. And so that was an important experience. And then later on when I was in my teenage years I would go to East Berlin frequently. Oh. And next German we couldn't go to Checkpoint Charlie. We had to take the subway, Friedrichstraße. And you leave this bustling, vibrant West Berlin and you come out on the other side and all the color is sucked out. There's no street life, there are no cars, there's no cafes, there's nothing. Why did you go there? What were you doing there? I was just so interested. You have to remember the experience when you grow up in Berlin at the time as you go for a restaurant, you have a great time. You stand right in front of the wall and then each German border guard is looking down on you. So that's constantly there. You want to go on vacation. You have to cross the border twice. It's a scary thing. So it's a constant part of your consciousness in your daily life. I want to understand the ideology behind it. You know Marxism, Leninism and all of that was I think a tremendous fascination to me. But then the final chapter of that was when I was able to get a fellowship in the United States, I was there for one year and then came back to Germany and then the wall fell. And I was in Berlin when the Brandburg Gate opened and the same nasty East German border guards that would give you a hard time a day earlier, the next day when it was possible to cross the border with only checkpoints, where the nicest people you ever going to meet. They would take pictures, polaroids at the time. They were immediately markets that sprang up where people were selling their uniforms or their insignia. It was an amazing thing. And I think the lesson to me was people are people and institutions are really important. Okay. There's a lot in there. I want to ask a few follow up questions about because that's interesting and that puts you in an unusual space for an American university president plainly. Here's a big-ish question. What lessons do you think there are to be learned, positive or negative about the way that East and West Germany and East and West Berlin were unified, reintegrated? Oh, that's a big question. I remember these days very, very well. The first thing was how absolutely amazed I was by just the skill of getting this done. I was right there when the Brandburg Gate opened. I was on top of the wall. I ripped my jacket actually getting up there. I still remember it to the stage. Nobody would expect the Beethoven's lines and cheap champagne and all of that, but there was a chance to call President Bush 41 and Francois Lameater on walking by maybe 10 yards away from me. And I remember very vividly how well this was executed. This was a tricky, tricky situation with the weakening and then collapse of the Soviet Union with reservations from Prime Minister Margaret Thatcher, with the meet along, the whole question of European unification at the same time. But I take away as a big lesson was people were absolutely clear on what they wanted. And Chancellor Kohl, I think, was very clear that he felt that that was a moment for German unification and it had to be seized no matter the cost. And I think particularly the American foreign policy leadership at the time was absolutely incredible. Then there was also hugely important a lot of trust that was established because these were tricky two years and the personal relationships that the German Chancellor had built particularly with Francois Mitterrand, there was a famous scene when they held hands in front of the battlefield of Verdun. There was a lot of personal trust that really was necessary to get this enormous accomplishment done. You say that with some marvel in your voice, so I recognize that you appreciate how important that was and maybe unlikely. Let's say you're going into a situation right now where there's very little trust between whether countries, people, corporations, the university and the public, whatever. How do you think about creating or building a trust where there has been such a stark division? And I ask as an American who's fairly concerned about these things on the macro level. When I was in high school, there was a lot of criticism of Chancellor Kohl and I was certainly not a big supporter of his politics when I was 15 or 16 and you just have your own ideas and you start thinking about politics but he was almost made a figure of ridicule. It took me a while to really appreciate what he brought to the table and there's something I think humongously important in his countries are lucky when they have the leaders that are required for this moment. So Kohl was not a great economist and I think he underestimated the economic costs of the German ineffication and there were a lot of mistakes that were made but he was a historian and he understood history and he understood that this was a historical moment that needed to be ceased. The second point was which brings me back to your trust question is what Kohl realized is that strategy's important institution is important but leadership is important and personal trust between leaders is critical. Because the French government, Francois Mitterrand, had to trust Kohl if you will waive through a proof the German ineffication and then had to trust him that they would not give up on European integration because these things were out of sync if you will. So what's the big lesson here? It's very, very easy to demonize the other side and to focus on what divides us and to see like well you know if you have this point of view I'm outraged by that and then there's what something is called a rush to righteousness often in politics. So we not only disagree but we think that the other person really is immoral based on having those beliefs and my strong sense from this is that there's so much we haven't commented.
people. And we need to emphasize that. And what he did, he emphasized the history with the personal suffering from the Second World War as a motivator for European and German unification. And that brings people together. Sharing a meal brings people together. Family stories brings people together. There are these very important things that just remind us that we are we're all people and we all have our stories and we all have our struggles. And creating this commonality is enormous important. You said that having a leader for the moment is important. I think we can all recognize and appreciate that. How do you see Donald Trump as a leader for this moment? Well, I think what we have is the tremendously polarized country right now. And I think the politics of all our country reflect the polarization. Do you think Trump is more an emblem of that as opposed to a primary driver of that or no? Politicians in a democracy are they're both a reflection that can reinforce things? When you're lucky, you have somebody who is exactly the right person. There's so many complicated aspects to this. How we think about the political situation right now. But no doubt is that having a focus on depolarizing, bringing people together is a very good idea. So I really understand politics. I know why people take positions on that. I see it in a variety of different ways. I see it in different levels of government. But our job I think as people that have responsibility in particular parts of society is to focus on what we are supposed to do in the my case universities and then look at how we fit into the broader issues and the dangers of having countries ripped apart by polarization are not trivial. Let's say someone in the Trump White House is listening to this conversation and says do your Meyer gets it and he's got the history with Germany. He's got a political science background and he understands how institutions work, how they rise and fall and how trust is a main lubricant of that. And we in the Trump administration think that we have some work to do. So let's bring him down here. Let's bring him in. Sit with the president and make a may trust czar for a couple of weeks or months. What do you do? Well, I think the key thing is always to focus on the concerns and the goals that people have in common. So just to bring it a little bit back at a more manageable scale for me. We're in national national is a democratic mayor. Then we have a Republican governor. We have a Republican state legislature. And of course, now we have Republican federal government and we had before a Democratic one. We need to work with everybody. That is absolutely essential for us. And the way I think you do this as a leader is you find the type of things that people can agree on. The magnets if you will rather than the wedges. So what are the magnets in the US right now? Well, I think there's critical questions about economic competitiveness, national security. Of course, there are issues such as innovation in general. Universities can play an enormously important role in that in addition to the educational mission. And they have almost every technology that we can think of right now either was invented or had a tremendous contribution being made by university researchers. That's an important thing. And that is not a partisan issue. So universities as this massive contributor historically in the United States, especially to the innovation economy. It's pretty obvious if you think about it for a minute. Silicon Valley wouldn't exist without Stanford. And you can see that across the country. How do you look at that contribution right now? Do you think it's declining a little bit or a lot? Or maybe you're going to tell me it's not that I think is going really well. Of the multiple ways in which universities and society interact, the innovation machine of university is really humming. Whether you look at cancer therapies, whether you look at quantum, advanced manufacturing, national security. I mean, every aspect of that you can think about an AI, of course, university is doing great work. And so that is going super well. From the outside, I could imagine that there's concern though only because seems like the momentum is moving out of the universities now. If you're a really good university researcher, you're going to be targeted by private firms immediately. And maybe you won't leave, maybe it'll just take on a consulting role, but your time may certainly be divided. Also, we hear more and more about the kind of researchers who would come to the US from elsewhere and are no longer coming in such number or maybe leaving and so on. So give me some data to back up. You're continuing enthusiasm for this movement. It's very hard to get systematic data on that. There's multiple things that one needs to look at. One of them is what's the transition form university researchers to the private sector. Where we do see that to some extent is in AI, right? With a hyperscale lesson, so forth. Now, again, not the first time we've seen this, we've seen, for example, when the birth of Google and eBay and so forth, there was a sudden interest in people to understand auction design and things like that. That is perfectly fine. But you can also see, of course, is two years ago, everybody would have said, in station will demand for programmers and now people are cutting their workforce. So this is just the way this goes. It's like if there's a particular demand in a particular development need where university professors are research just dead level of talent is needed, they're competing on that and then as the businesses move on and there are other challenges that changes again. So that doesn't bother me so much. The more fundamental question is that the tools that are being provided by, you know, Open Eye and Thropic and so forth, they will have a revolutionary impact on doing research. That's for sure. And that we're seeing and there were to a large extent not developed inside of universities. But again, it's not the first time in history this happened when we had, you know, particle accelerators, they were developed by national apps and then university research would participate in that. Now negotiating this relationship is complicated, but these things tend to happen in waves. We're certainly not seeing a big exodus. The second stream is like a people leaving the country. Again, very hard to get that on that. We have to be careful that this anecdote or that is not kind of dominating the conversation. We really have to have systematic data on that. When you look at what are the opportunities right now, and by the way, nobody should relax about the threats to funding and the funding uncertainty and all of these things that are going on with research funding right now. That's a big deal. But is that enough so that people will pack up and go to Britain, go to Germany, go to Canada, or go to China? Moving to a different country, if you have, you know, your research that's a big deal, they have tremendous funding challenges in the UK. The Middle East, of course, with the war there is not an attractive place to be. And then you go to France or you go to Germany that's an entirely different thing and the funding levels are just not comparable to what you have in the United States. And unless you are like a Chinese national or Chinese origin, do you want to go to China? So my worry is more like about the other side attracting talent, particularly for graduate students and postdocs. The ability to attract the world's leading scientific talent is absolutely essential for the country. Always has been certainly since the Second World War. So it's especially interesting to hear you say that as a German, because of course Germany had the most influential university system in the world for most of the 19th century, part of the 20th century, I don't know whether you would attribute the decline and fall to Hitler per se. But how do you think universities today, including your own and others in the US, stack up to that model? Do you see Germany as a cautionary tale in any way? A hundred percent. It's a very cautionary tale. I mean, the University of Berlin, which was found in 1810, was the model for the great modern research university. It heavily influenced the creation of places like Hopkins University of Chicago. And was the greatest university in the world. They had like one-fourth of all Nobel laureates, where from that one university, Planck was there, Einstein was there, was unbelievable. And then of course the Nazis destroyed it. And then that created this tremendous exodus of scientists to the United States. And you just look at the names for Neumann, for me, just on the physics side. Amazing talent. That was absolutely critical for establishing science leadership in the United States, including the Manhattan Project, of course. Many of them were foreign-born. So to be a destination for the world's great talent is really a good idea, because you're getting the best and the brightest, you're getting the very, very top from around the world. They have received a lot of education already, and they're motivated, and they're willing to take risks. There's a tremendous asset. So where would you put the US now? Because there are some people who say that the Trump administration and the general public turn against the mission of the university is severe enough to really damage the US university reputation. Well, I think these are two different things, right? There's one question about the reputation of the universities, which we need to dig in a little bit deeper. That is a very serious question. And of course, the reputation leads also to actions being taken by the administration and by Congress. If we just focus on the research funding, my sense is is that it's a bit of a flesh wound right now. If it continues for longer, that would really be destructive, because we cannot be a scientific superpower without funding, and without being a destination for the world's great talent.
Coming up after the break, Vanderbilt University may be coming soon to a city near you. I can't replicate this in Nashville. You need to be there on site to take advantage of this. I'm Stephen Dubner. This is Freakonomics Radio. We will be right back with more from Daniel Diermeyer. Daniel Diermeyer became chancellor of Vanderbilt University in July of 2020. He recently had his contract extended through 2035, a major vote of confidence from his board. So most university presidents, including you, start off as university professors. And at some point you get chosen for or steered toward the administrative path. Do you think that makes sense? Because running university these days is like running a mid-size corporation or maybe a conglomerate. And no offense to you or your peers. But most people who set out to be professors have very little experience in that realm. So I'm curious what you think of this process for choosing presidents or chancellors. It's a very good question. People sometimes say it's the hardest shop in America. I actually disagree with it. I think it's a great shop. But the reason why I think it is so challenging, especially today, is because it's really three jobs. Job one is you have to have domain expertise. And you have to constantly make decisions on that. How do you think about it? Education, if you're on an AI, do you want to invest in quantum? Yes or no? And then there's all the intricacies of just running an academic institution. Number two is you are basically the CEO of a mid-size business. And it's a complicated business. It has the educational part. And that's what most people think about. They think the university, chancellors, president is like a headmaster of a school, but a little bit bigger. We have a 1.3 billion dollar research activity every year. We have a corporate real estate function, which is extensive. We have an asset management business. If you want to call it, that's our endowment. We have a relationship with the hospital. We don't run their hospital, but we have a close partnership. It's almost kind of a private equity relationship. And then, oh yes, we also have college athletics at the highest level in the SEC. And then the third role is you are like a mayor of a small town, your politician, with all the challenges that comes with that. And you have to have relationships with a real mayor of Nashville. So these are different skill sets and great presidents in some sense are able to do all three. So you're correct that most academic leaders come from the first pillar, if you will. They are academic leaders and they know this very well. They've been usually deans or provost or something like that. Now, they may not have run a complicated business and that's a challenge. And they may also not know or may not like to go to Washington, interact with members of Congress or the administration, which is a whole nother skill set. Now, the question is, if you pick somebody who was a CEO or people sometimes pick military leader or senior politicians to run a university, now you're missing the first one, which means in practice that the provost is running the academic site, because it's too complicated. And I think the analogy you want to think about is, let's say you're big law firm. Lawyers are not trained as managers either. They usually have a career as a partner in a law firm and then they're being picked in a managing director. My sense is that we absolutely must do a better job in educating academic leaders in the nuts and balls of the business site and the political site. But I think it's very difficult to do that without having real academic domain expertise. Fair enough, but let's say you do have great academic expertise and someone is identified, someone like you who plainly was identified as having those other abilities as well. I mean, you were teaching in a business school, correct? That helped, yes. But let's say someone doesn't have that. I mean, universities have been around a long time. Why has a better training channel not been set up for that to take the talented academics who you want to be running an academic institution, but don't necessarily have those administrative skills and train them up. Because to me, it seems like a fairly random process at the moment. I'll be honest with you. I think that's a fair point. What's the reason I can only speculate? I don't have any data or anything like that. I think it is a little bit you have to be bilingual or trilingual. If you don't want to talk about the balance sheet or the income statement or the HR function, even training will not get you there. I think you have to have a taste for it. If you say $50,000 on elevator repair, you can take the $50,000 and change the life of a nursing student forever. So a lot of colleges and universities are failing going out of business or in deep financial distress. I just read a piece in maybe the chronicle of higher ed about how a lot of schools are hiring interim CFOs to stop the bleeding. Vanderbilt, meanwhile. You're expanding. There's a new San Francisco area campus from the California College for the Arts. There is a New York City campus opening in former seminary buildings in Chelsea. Talk to me about this expansionist appetite, how you're able to do it, what the goals are. We're doing four things at once. You mentioned San Francisco, you mentioned New York. We are also in the process of building a campus in West Palm Beach. And we are also in the process of building what we call a quantum campus in Chattanooga, Tennessee. And each one of them, there's a strategic vision behind these four entities, but they all have their specific instantiation and way to think about them. The premise is that great universities today and for the future need to be deeply integrated with their innovation ecosystems. Once you believe that, then where you are matters. I was fortunate enough to start my career at Stanford from '94 to '97. So I was there when the internet was born and it was this incredible symbiosis between Stanford and Silicon Valley. Magic was created and we've seen this in a couple of other areas of the country as well, Pittsburgh, robotics as an example. So we're not trying to do what people sometimes call a franchise system. We're not trying to do what we're doing well in Nashville and now do that in San Francisco as well. You're also not opening satellites in the Middle East, which many universities have done. No, we're not doing that. And why is that other than the fact that it might be seen as a pure cash grab? We never even thought about it seriously. Whenever we do something, it needs to be a clear strategic rationale. So what's the strategic rationale in Chattanooga? Well, I start with that because that people usually ask, that's kind of well, why Chattanooga? That's just an hour and a half away. Well, we have the capability and the possibility to be one of the leaders in the quantum revolution, quantum engineering, quantum science. Chattanooga, 15, 20 years ago, built the best fiber optics network in the Western Hemisphere. And in the last few years, they have developed a quantum test bed. They're already some kind of corporate partners there. But they have difficulty attracting PhD level talent at the level that we can attract. So we're going to have about 50 faculty. They're 100 students, mostly graduate students, but also destination for undergraduates. Because you need to be there on site to take advantage of this. In New York, it's very different. In New York, we think that our students and our faculty would benefit to have the ability to spend some time in a great global city. Because if you want to work in healthcare or you want to work in entertainment, or you're going to work, for example, in mobility, national is fantastic. It's great. But if you want to work in media, you want to work in the arts, you want to work in finance. New York is fantastic. So this is a campus for students to go for four years or more to rotate through. No, no, no, think about it. Study away. Let's say you are a senior. You really have an interest in a career in the media. And so it's very important that we're deeply connected with internships and with companies there. We can house around 100 students per semester. We have faculty there. So that's what the campus does. That's New York. Florida is really very different. West Palm Beach is exploding. And there we're interested in business, particularly the intersection of business and technology and certain areas of engineering. Space, defense, clean tech are really great in that area. And so these are areas that we have a lot of interest and we have already strength in universities. But again, defense tech, there's just not that much around us. How big will that be? Probably about 1,000 students and 100 faculty, mostly graduate students, again, with a destination for undergraduates that want to work in this area. San Francisco is still very much in the planning phase. What's attractive about San Francisco is arguably the world capital of innovation. And it has the strong artistic community as well. How much were you involved in the choosing of the sites? Did some of this predate you? No, that's all that's all. That's all you. Wow, you've been busy. It's a great role. It's a great responsibility. So what's the larger goal here is Vanderbilt trying to become a national brand? What would you do with that kind of market power? We're already a national brand, I would say. So we've seen, in part, because of the, I think the way we handled October 7th better than many of our peers, we've seen a tremendous increase in applications. I know universities love to drive down the acceptance or admission percent, which to me is a strangely paradoxical goal for a university, which is to open up learning to
everyone but you become more successful by being more exclusive. How do you think about that paradox? There's a good debate to think about how do we broaden our impact on students, but right now that's what we do. We want to be a destination for the most talented students and we want to compete for them. We want to be an environment where people can perform at the highest level and that includes being surrounded by people that have a similar level of determination and background and so forth. If I see demand for students going up to Vanderbilt, particularly the type of students that I want to track to Vanderbilt, that's a good thing. You have been very patient in answering my many questions about problems and the things that worry you. What lights you up these days? I think that is utterly critical for everyone who is in a leadership role today is that there are these foundational institutions that are, I think, at the core, at the root of the success of our societies. Their universities, their democracies, rule of law, market-based economies, media. There's a bunch of them. All of them right now are under attack and all of them have lost their trust to a certain extent. I think we have a tendency to focus on the problems and that's great. We need to reform. We need to get things better, but let's not forget the tremendous good that many of these institutions do every day when I interact with our undergraduates and I do it on a regular basis. I have dinner with a group of undergraduates. I see how they've embraced a culture of civil discourse on campus, how they live that and how much they are motivated by having an impact in the world. It's amazing. This may sound like an overstatement, but I don't really care. When I look at these students, let's say 30 years from now, they run the country-run fine-shape. It's enormously impressive to see what they're doing and they're doing it the right way. That again was Daniel Deermeyer, Chancellor of Vanderbilt University. Let me know what you thought of this episode or if you have any ideas for future episodes. Our email is
[email protected]. Coming up next time on the show, we hear from Dartmouth president Cian Bylock, another scholar turned administrator who spent time at the University of Chicago, but her background is in psychology. We're in the business of helping young people reach their potential, so it's something I pay a lot of attention to. We'll talk about what schools owe their students. I actually think that we should be responsible for our student outcomes and how they need to deliver it. We're not a political organization, we're not a social advocacy organization. We have a very clear mission, and when people trust in that mission, they trust you. That's next time on the show. Until then, take care of yourself, and if you can, someone else too. Frekenomics Radio is produced by Renbud Radio. You can find our entire archive on any podcast app. It's also at Frekenomics.com where we publish transcripts and show notes. This episode was produced by Pete Madden, edited by Gabriel Roth. It was mixed by Jake Lumis with help from Jeremy Johnston. The Frekenomics Radio network staff also includes Augusta Chapman, Delvin Abouaje, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Alaria Montenacort, Mandy Gorenstein, and Teo Jacobs. Our theme song is Mr. Fortune by the Hitch Hikers and our composer is Luis Guerra. As always, thanks for listening. We had a very good year in football. We were terrible six years ago. And nobody thought we could do it. I mean, we had an op-ed in the Tennessee, and when I started, that basically said, Vanderbilt should leave the SEC because of your embarrassment to the conference. And so, looking back to that, now we can say, "Wow." The Frekenomics Radio Network, the hidden side of everything.
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