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Citadel's Ken Griffin is giving $125 million of the Universoty of Chicago's economics department
Reuters/Jim Young
Chicago: Spiritual home of the dismal science.
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Ken Griffin’s $125 million gift to the University of Chicago is a big bet on the future of economics

By Oliver Staley

Ken Griffin, the billionaire founder and CEO of the hedge fund giant Citadel, is donating $125 million to fund the study of economics at the University of Chicago, bolstering what already is arguably the most influential economics department in the world.

Griffin’s donation will fund an endowment that will pay for new professors, grants for students, and an incubator for research. The last is critical, as economics research has evolved from the dismal science of studying government statistics to the creation of elaborate experiments to test theories.

The chairman of the University of Chicago’s economics department, professor John List, is among the pioneers in experimental economics, and he previously enlisted Griffin to fund one of the field’s more audacious experiments. With $10 million of Griffin’s money, List opened a preschool in an impoverished suburb of Chicago in 2011 to test whether about improved teaching or parenting would have a bigger impact on children. One finding of the research is that paying parents to attend parenting workshops can yield big improvements in their children’s test scores.

Griffin’s new donation will advance scholarship in the areas of economic growth, development, and the intersections of economics and machine learning, List says. Griffin says he has no intention of directing the research. ”The worst thing I could do is try to dictate to these thought leaders what they should do with their time,” he says.

Economists who either teach or studied at Chicago have won 29 Nobel prizes in economics since the award was first given out in 1969, including nine this century. This year’s prize went to Richard Thaler, an economist at Chicago’s business school.

“Nearly every economic innovation of the 20th century has some sort of link to Chicago economics,” says List. “Ken viewed us a good bet to further the progress of economics.”

Griffin, a Harvard alumnus, said he also wanted to support Chicago because of its need-blind admissions policies, and because the university has been outspoken in its resistance to safe spaces and trigger warnings, eschewing policies on other campuses which Griffin sees as threatening free speech. He draws a connection between the principles of free markets—famously championed by Chicago economist Milton Friedman—and personal freedom.

“At the heart of economics is the idea that when people are left to make their own decisions, they make the best decisions—and collectively, they make the best the decisions for society,” Griffin says.

Huge donations to wealthy institutions have come under fire as putting resources where they’re not needed. In 2015, author Malcolm Gladwell took to Twitter to ferociously mock hedge fund billionaire John Paulson for his $400 million gift to Harvard. “It came down to helping the poor or giving the world’s richest university $400 mil it doesn’t need. Wise choice John!” he tweeted.

Griffin, who donated $150 million to Harvard in 2014 to support financial aid for students, says the criticism would be valid if the institutions squandered the money, but universities like Harvard and Chicago have enormous impact on the world, he argues. ”My only ask is to be bold,” he said. “Let’s not be unduly conservative.”