The real secret of George Mason University.

The stadium scene.
March 28 2006 4:24 PM

The Secret of George Mason

What its Final Four basketball team and its unusual economics department have in common.

Unlike his neighbors, George Washington, Thomas Jefferson, and James Madison, founding father George Mason has rarely gotten his props from historians and the public. Until recently, the same could be said of the university bearing his name. But the advancement of Mason's basketball team to the NCAA's Final Four is only the school's latest surprise win. The GMU economics department—which didn't even award Ph.D.s until 1983—has two Nobel Prize winners on its faculty. The law school ascended to the first tier several years ago, a striking achievement for a new program that 10 years ago was being run out of an old department-store building. What's remarkable is that GMU's freewheeling basketball team and its free-market academic teams owe their successes to very similar, market-beating strategies.

GMU has excelled on the court and in the classroom by daring to be different. Its basketball team and academic programs began with the (correct) assumption that they couldn't hope to compete against the top schools in their fields—say, Harvard Law School or the Duke Blue Devils—by directly imitating their methods. GMU lacks the resources and reputation to recruit McDonald's All-Americans or Alan Dershowitzes. So instead, GMU has hunted for inefficiencies in its markets. Coach Jim Larranaga follows the Moneyball model of recruitment: hunting for the undervalued players—the ones who everyone else thought were too short, too thin, or too fat—and then building them into a team. In its astonishing defeat of UConn, GMU's players were giving away 4 inches at nearly every position. 

Advertisement

Picking undervalued players wouldn't be possible if the market for jocks worked perfectly. In an efficient market, jocks—like stocks—should be valued no more nor no less than what they are actually worth. So, why isn't the market efficient?

One reason is that coaches who take chances on oddball players risk making themselves look foolish. A coach who goes after the same jock that everyone else wants, or an investment analyst who picks the same stock that everyone else recommends, at least can't be made to look worse than average. Herd behavior means that unpopular opportunities remain unexploited. An unusual coach who's willing to look unfashionable with the in-crowd has a chance to excel.  

This is also the idea behind GMU's free-market-oriented economics department. The department got started with a heretical premise: The academic market is inefficient, so how can we exploit it? GMU knew it couldn't afford to be a first-class MIT and didn't want to be a second-class MIT, so successive chairs of the department, backed by entrepreneurial university presidents George Johnson and Alan Merten, looked for unexploited opportunities.

James Buchanan, GMU's first Nobel Prize winner, has never had an Ivy League position and indeed he has never taught above the Mason-Dixon Line. Gordon Tullock, a potential future Nobelist, has no degree in economics and took only one class in the subject. Vernon Smith, who moved his team from the University of Arizona (again, no Harvard) to GMU in 2001, had to fight to get people to treat experimental economics as more than a cute parlor game.

In the academic market, herd behavior is compounded by political correctness. In the 1960s, James Buchanan and Gordon Tullock were joined at the University of Virginia by Ronald Coase (who would later win his own Nobel). But the university administration and powerful organizations like the Ford Foundation thought their free-market ideas (limited government, tax cuts, selling radio spectrum!) were disreputable, and they worked hard to push them out of the university. 

From the 1960s into the 1980s, a small university such as GMU could hire conservative and free-market thinkers of true genius for the same kinds of reasons that, in the mid-1960s, a middling school like Texas Western University could recruit some of the best basketball players in the nation, so long as they were black, and win the 1966 NCAA championship. Conservative and free-market economists were so undervalued that GMU could afford the best of them.

Today, blacks are no longer undervalued in the market for basketball players, and neither are free-market economists undervalued in the market for university professors (even if free markets remain undervalued in the world at large). As a result, the George Mason economics department must work ever harder to pick winners.

GMU remains an underdog in both basketball and economics. But Coach Larranaga has a plan to succeed in the long term and so do GMU's professors. Click here to read about how GMU is seeking out different new kinds of undiscovered geniuses.

The odds are still against GMU on the court and in classrooms. Neither in basketball nor economics is GMU a top-10 school. We cannot match the endowment of a Harvard or Stanford. Building with the odds stacked against you is difficult, but GMU proves it can be done. Look for undervalued assets, eschew political correctness, and take the long view. But don't try to imitate Mason. The opportunities Coach Larranaga found will dry up. A small economics department today is more likely to succeed by assembling a quality group of socialists than free-marketeers. Bring it on! We're ready to play.

Alexander Tabarrok and Peter Boettke are economists at George Mason University. You can reach Tabarrok at Tabarrok@gmu.edu and Boettke at pboettke@gmu.edu

TODAY IN SLATE

Politics

The Irritating Confidante

John Dickerson on Ben Bradlee’s fascinating relationship with John F. Kennedy.

My Father Invented Social Networking at a Girls’ Reform School in the 1930s

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

The All The President’s Men Scene That Captured Ben Bradlee

Medical Examiner

Is It Better to Be a Hero Like Batman?

Or an altruist like Bruce Wayne?

Technology

Driving in Circles

The autonomous Google car may never actually happen.

The World’s Human Rights Violators Are Signatories on the World’s Human Rights Treaties

How Punctual Are Germans?

  News & Politics
The World
Oct. 21 2014 11:40 AM The U.S. Has Spent $7 Billion Fighting the War on Drugs in Afghanistan. It Hasn’t Worked. 
  Business
Moneybox
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
  Life
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 21 2014 1:12 PM George Tiller’s Murderer Threatens Another Abortion Provider, Claims Right of Free Speech
  Slate Plus
Behind the Scenes
Oct. 21 2014 1:02 PM Where Are Slate Plus Members From? This Weird Cartogram Explains. A weird-looking cartogram of Slate Plus memberships by state.
  Arts
Behold
Oct. 21 2014 12:05 PM Same-Sex Couples at Home With Themselves in 1980s America
  Technology
Future Tense
Oct. 21 2014 4:14 PM Planet Money Uncovers One Surprising Reason the Internet Is Sexist
  Health & Science
Climate Desk
Oct. 21 2014 11:53 AM Taking Research for Granted Texas Republican Lamar Smith continues his crusade against independence in science.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.