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October 18, 2022 Reading Time: 12 minutes
Reprinted from Law & Liberty

Imagine a university that requires all of its students to take multiple courses on Austrian economics, basic price theory, and monetary policy. Now imagine that same university trains students across a wide range of disciplines including professional fields such as medicine, architecture, dentistry, film, and culinary arts, on top of the conventional fields of study like history, philosophy, politics, business, and economics. Moreover, this university is widely recognized as being the best in its home country and one of the best in that part of the world. It also has no tenure—faculty are reviewed annually with short-term contracts. However, the faculty are normally retained, and few are let go. Its culture and practices are based on market ideas and the application of those ideas in the life of the university. Professors even have to bid on classroom times to get the most desirable slots, and there’s a depiction of Atlas holding the world on his back at the entrance in a not-so-subtle nod to the influence of Ayn Rand. Its library is named after Ludwig von Mises.

Does this sound impossible to imagine? Actually, you don’t have to imagine it because it exists. 51 years ago, Universidad Francisco Marroquín (UFM) was founded in Guatemala City, Guatemala by the visionary businessman Manuel Ayau, to change the intellectual culture of his home country by introducing an entire generation of young, successful Latin American political, business, and professional leaders to the ideas of liberty. It’s a remarkable and frequently overlooked academic success story, one that provides some valuable insights for those observing the emergent movement towards creating alternative, more pro-liberty academic institutions in the US and elsewhere.

On a recent trip to UFM, I had the opportunity to interview its current leadership team, various members of the faculty, some alums, and associated scholars. The picture that emerges is one of a vibrant, dynamic, and influential institution that attracts top students and faculty from throughout Latin America while training a generation of political and business leaders. It is not all things to all people, and historical tensions between conservatives and classical liberals are as prevalent here as they are in the US at the moment. Still, UFM serves as an intriguing example of the challenges and possibilities of developing alternative institutions in the American academy.

Building Foundations

Ayau’s journey began, as so many of his generation did, with a trip to visit the Foundation for Economic Education (FEE) and the great Leonard Read in upstate New York in the 1950s. Ayau was puzzled why his native Guatemala could be blessed with abundant resources, fertile agricultural land, and a temperate climate and yet be so poor. After visiting FEE, he began to devour economics with a particular emphasis on the Austrians and monetary theory. He attended the Mont Pelerin Society’s meetings and helped found a Guatemalan think tank that focused on policy analysis, while he watched with concern as universities, civil society, and politicians began to pivot towards Marxism throughout the region.

Ayau began to host visits to Guatemala by prominent international scholars in the liberty movement and introduced his extensive network of friends and colleagues to both free market ideas and an impressive list of intellectuals. Erhart, Mises, Hayek, and many others came to Guatemala and spoke to business and political leaders defending freedom as Marxist ideas became even more deeply embedded in the nation’s universities.

In the course of a successful business career and after briefly dabbling in politics, in 1971 Ayau decided to start a university dedicated to the principles of liberty. It was originally located in a single small building in the capital and was initially focused on economics and business. The campus eventually moved to a beautiful location in a ravine tucked away in the center of the city.

That same ravine was once used by local residents to dump garbage and raw sewage. Now it has an arboretum, pristine gardens, and two museums dedicated to indigenous art and artifacts. One marvels at how private-sector incentives contribute to the environmental and cultural sectors of a society in a way top-down command and control simply cannot. A beautiful and thriving section of the city was created out of a dump.

The university currently offers degrees in architecture, business, medicine, dentistry, nutrition, literature, political science, and many other fields. It’s now widely recognized as the best university in Guatemala. How does the UFM leadership know this? Even prominent socialists in Guatemala acknowledge UFM is the best place for their kids to go if they want to have successful careers. The current rector of the university, Ricardo Castillo, jokes with me that at events throughout the country, he encounters prominent defenders of socialist ideas who complain to him that even their children who attend UFM now argue around the dinner table with them defending free markets.

Economic Freedom—In Theory and Practice

So how did Ayau create a university so good that even socialists send their kids there? I think there are three important factors that Ayau instituted at the founding of the school that have helped contribute to its mission and longevity: teaching the principle of liberty, offering practical, hands-on training, and a unique institutional structure. First, the university has a commitment to both teaching and living the principles of free markets and freedom. It begins in the classroom. The reason the kids of those socialist leaders can debate with their parents is that every student at UFM is required to take no fewer than four courses in free market economics. There is one class each on the thought of Mises and Hayek. Two additional classes, Economic Processes I and II, teach economics with an eye toward applied knowledge rather than merely abstract theory.

Fernando Monterroso has been involved with UFM since the beginning. As Treasurer he helped arrange the purchase of the land for the present location in the busiest area in Guatemala City. He then served as president from 1989-2003. He now helps administer and teach the general education requirements in economics through the Henry Hazlitt Center on campus. The program takes students who have no interest in economics and demonstrates its relevance: “You make it about real-world problems. For a medical student who sees poverty and malnutrition, you discuss wealth creation and distribution of markets versus the state. For psychology students, we explain that economics explores human behavior. For political science students when the government intervenes in the economy what happens?” One has a difficult time imagining such an approach to teaching economics at a prominent US or European university for substantive, pedagogical, and administrative reasons. How many assistant deans and support staff would be needed in an American university to handle the courses, not to mention the difficulty finding qualified instructors and passing it through the governance structures?

As students and faculty will attest, these courses do not transform every student into a raging libertarian. In the same way that many students in the US uncomfortably tolerate the current left-wing discourse on campuses, many of the UFM students don’t agree with the free-market principles they are required to learn. Unlike American universities, though, there is ample space to disagree with the dominant intellectual predisposition of the faculty. No one is kicked out of UFM for arguing against markets. But at a minimum, even left-wing students are exposed to the ideas, and there are surprising examples of students whose lives are transformed by the curriculum.

The university funds a full scholarship program for poor but academically gifted Guatemalan students throughout the country. I met one such scholarship student. His mother weaves textiles in a small city with dirt roads and poor infrastructure. He will be graduating this year, and after a stint in the private sector, he plans to pursue further study of political economy. He describes the impact that the ideas of free inquiry, liberty, and responsibility have had on his life and thinking. And while he acknowledges that many of the students don’t agree with the foundational ideas of UFM, he believes that just having those students aware of them is important in creating discourse among his fellow students. UFM has begun a video series documenting the remarkable stories of these students who overcome long odds to graduate from dire backgrounds.

The commitment to the principles of free markets permeates the DNA of UFM faculty and administration. As I noted in the introduction, departments, centers, and faculty must pay prices to use the physical space of the university, including classrooms, auditoriums, and other areas. There are two prices, a peak price for mornings and evenings and a lower price for afternoons. UFM’s administration realized that certain classrooms and times were more popular with students and faculty. However, they believed the best way to distribute those scarce resources was using a price system, so faculty must pay for the privilege of getting better times and classrooms. 

Ultimately it’s not merely about small things asking the staff to value classroom time, it’s also about being entrepreneurial and dynamic. The school encourages new thinking and initiatives, but unlike other universities, it seriously evaluates those programs after a few years and uses objective assessments to terminate some while keeping others. If a program isn’t contributing to the success of the university, it’s gone.

UFM also prides itself on having the latest in cutting-edge technology throughout the campus. This allows it to be agile, much like a business. Castillo brags to me that Zoom approached UFM during the early part of the COVID lockdowns for advice on how the university was using its networks and hardware to handle classes within a couple of days after the lockdowns were imposed in Guatemala. While other institutions in Europe, the US, and Latin America needed weeks to transition to remote learning, UFM did it seamlessly because it was an early and aggressive investor in technology and remote learning. It leverages those resources to reach students and faculty throughout the world: At one time, UFM had the largest “Massive Open Online Course” (MOOC) in the world (studying Don Quixote).

Promoting the ideas of liberty at UFM isn’t limited to what’s happening on campus. After more than 50 years of training business and intellectual leaders in the country, UFM now has an impact throughout the country, serving as an intellectual resource against government expansion in the economy. Much of Latin America is currently backsliding toward despotism and mercantilism, but Guatemala has passed various market reforms in areas such as telecommunications and monetary policies. The University’s secretary general, Ramon Parellada believes the university contributes to that progress. Many alums, he tells me, write opinion pieces for the national newspapers defending liberty. Some also serve in the national congress. UFM, he argues, has served as an active bulwark against socialism in Guatemala for quite some time.

Professional Education

Ultimately, Ayau recognized that while Guatemala needed a university that educated students in the basic principles of liberty, such an institution also needed to offer all its students a practical reason to attend—including those who might not agree with the ideas. From the beginning, UFM has focused on providing high-quality professional education across a wide range of disciplines. It does this while also maintaining its alternative vision of a university without tenure or many of the other undesirable elements we see in the academy today.

UFM accomplishes this in two ways. First, most of the faculty are part-time instructors who work and are at the top of the fields in Guatemala and elsewhere. Practicing physicians, dentists, lawyers, and others make up the bulk of the faculty. This means the students are receiving a more hands-on view of the careers they wish to pursue once they graduate.

This decision killed two birds with one stone: Not only did it give the students a more practical education, it also alleviated the need for tenure. They could attract top talent—people committed to the principles of liberty and well-established in their professional fields. Moreover, these professors aren’t teaching with poor or outdated equipment. President Castillo recalls that a major private university in New York had recently sent a delegation to the UFM dental school to tour the campus and facilities. At one point, several of the visitors were quietly noting with envy the quality of equipment and classrooms for the dental students, which prompted one visitor to lament to another that “they have better stuff here in this banana republic than we do in New York!”

The second way UFM tries to make its education more practical is by tracking the trends of successful businesses through its professional faculty and business connections. If you have recent experience at any number of successful businesses, you’ve probably heard of Design Thinking. It is a problem-solving approach that originated in design schools examining new products. The approach focuses on how people react to the product and tries to combine what’s feasible, desirable, and viable. There is an emphasis on framing questions well and getting feedback from users. UFM now requires that every student participate in a design-thinking-based project related to their interests and fields. These “Co-Lab” projects not only encourage practical learning, but also introduce students to the idea of collaborating in teams across disciplines, a crucial and highly desirable skill for employers today.

As Jorge Gabriel Jimenez and Isabel Moino, the directors of the lab, remind me, UFM was founded in a single building by a small group of faculty who were moonlighting as professors. Lawyers, bankers, and businesspeople came together and shared space. The atmosphere was very interdisciplinary. The Co-Lab, they argue, is in many ways a modern extension of that founding spirit. Every semester, the directors begin to solicit project ideas from faculty members such as addressing malnutrition, K-12 education reform, and water management in the capital. Like the classroom times, faculty members have to compete for students who are interested in working on said projects with a “pitch” event. Once again, market principles permeate the DNA of the school.

At the pitch session, the faculty present their projects and students list their preferred placements. Jorge and Isabel match students with projects based on subscription and need. Each of the projects uses design-thinking principles to solve problems, some in the private sector and some in the public sector. UFM students tackle their projects using design thinking and liberty-based solutions. In true design-thinking fashion, the teams are chosen to include students from a wide range of disciplines. They work up prototypes and talk to people in the field dealing with the challenge. Again students learn both how to think and collaborate, but also listen.

Ayau first managed to attract top professionals to teach at UFM simply by recruiting friends in his expansive network of contacts. But as the university grew and its reputation became established, the view of teaching there began to change. As Guy de Wyld, a long-time Board member, former teacher, and friend of Ayau’s tells me, teaching and serving at UFM has become a status symbol for professionals in the region. The school is widely seen as one of the best, if not the best training ground for professionals in the region. Being associated with UFM is a sign of professional success. 

And the university’s emergence as a desirable place to work has helped maintain the third contributing factor to its success: the unusual institutional arrangement. Like most universities, there is an executive, a rector, and administrative staff. But the school is ultimately governed and in some ways managed or overseen by two Boards. One Board is a more conventional Board of Directors that meets monthly to deal with long-range planning and strategic issues. The other Board meets more frequently to oversee the hands-on management of Castillo and his team.

Getting individuals to devote the time to serve on those Boards is not easy, but because it’s UFM, people give their time. Mario Nathusius is one of Guatemala’s most prominent business leaders and was a good friend of Ayau’s. Along with Wyld he has served on both Boards and been affiliated with the university since the beginning. They knew Ayau tried to pass on the ideals and passion he brought to his love of learning about liberty. They convince younger professionals to get involved and volunteer their time, not just their money. Despite the university’s reputation as a sort of Galt’s Gulch (the university is in a ravine after all!), volunteerism and altruism have played an important role in its history. Older members serve as examples by giving their time and honoring Ayau’s vision of a university based on the principles of liberty.

And those Boards are not just showing up and rubber stamping all of the activities of the administration. They do sometimes intervene in the process. One case helps to illustrate some of the tension that exists in any large institution that has competing interests. Jessica Paduan is the executive director of Fe y Libertad—Faith and Liberty. She worked at UFM for more than 15 years in various capacities and has many connections with the faculty and staff. She explains that like other countries in the region, conservatism in Guatemala has typically been associated with religion and suspicion if not contempt for classical liberalism and free markets. Fe y Libertad is trying to promote the gospel of free markets among Protestant and evangelical leaders as well as the Catholic hierarchy in Guatemala and elsewhere in the region, not unlike the Acton Institute in the US.

Under the previous rector, Fe y Libertad approached the university for formal affiliation and a center on campus. Despite the rector’s support, the response of some faculty and members of the boards to officially housing a religious center was unenthusiastic. While Fe y Libertad is recognized by UFM as a sort of partner, the center is not located on campus, and certain members of the community were opposed to any relationship. Paduan notes that in some ways trying to bring together religious organizations and free market proponents is always a challenge, but she worries that UFM either is or merely is perceived as unnecessarily antagonistic towards religious groups. She tells me that this is limiting the impact of the university and preventing good students from considering the school as an option when choosing their university.

A Model for Innovative Education?

In many ways, UFM’s story is the story of the liberty movement during the last 50-plus years. Founded during the Cold War in response to the threat of communist expansion, much like the American alliance between libertarians and neoconservatives, it has grown and helped defeat Marxism in Guatemala. As it has matured and evolved, it has become more mainstream but has maintained its commitment to the values of its founder and the principles of liberty.

But as an example to those looking to reform higher education in the rest of the world, such as the University of Austin, UFM’s longevity and success should provide a reminder of the challenges faced in starting new educational institutions. Austin seems to have been formed in response to the rise of leftwing ideologies on campuses and growing intolerance for dissent, much like UFM’s own beginnings. But it’s important for all of these aspiring alternative institutions to remember that universities need a selling point that goes beyond branding and courses. People want good, marketable degrees that will give them a leg up in the competition for jobs and graduate studies. UFM has committed itself not only to liberty, but also to high-quality professional education.

And UFM has chosen a path in the liberty movement that is secular and places it at odds with some groups that might be natural religious allies in its quest to keep Guatemala from veering toward centralized political and economic policies. As alternative American universities are established, they may find the same tensions within their faculty over religious issues. How they will navigate this potentially unavoidable tension will be interesting to watch.

UFM is not all things to all people in the liberty movement, but it’s certainly worked. Getting to this point wasn’t as easy as simply establishing it and waiting for the students and money to flood in. The Field of Dreams story, this is not. They built it, but to get people to come has taken a plan, hard work, and a large team of supporters and patrons. Whether it’s replicable outside of its context is an open question, but it is a question we should see answered here in the US over the next several decades.

G. Patrick Lynch

G. Patrick Lynch is a Senior Fellow at Liberty Fund.

Follow him on Twitter @plynch1966

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