A Wall St. Titan’s Foray Into Philosophy

While billions of dollars in gifts flow to academic programs in health, business, and the STEM fields, people who work in the humanities could be forgiven for wondering when it will be their turn. For some at the Johns Hopkins University, it turns out, that turn will come sooner rather than later.

In January the institution announced a gift of $75 million from William H. (Bill) Miller III to its philosophy department. The largest donation ever to a department in that field, it will create endowed professorships, support graduate students and postdocs, and eventually increase the number of full-time faculty members to 22 from 13.

Miller is a legendary investor, famed for beating the S&P 500 Index for 15 years in a row. A “value” investor who seeks out relative bargains, he spent most of his career at Legg Mason and now has his own firm, Miller Value Partners, in Baltimore.

Academic philosophy may seem an odd interest for Miller, but he was once, perhaps improbably, a Ph.D. candidate in the field. He finished the coursework and qualifying exams at Hopkins, but when he was due to start his dissertation, he considered the tough market for teaching jobs and left for a career as a stock-picker.

He spoke with The Chronicle about how philosophy made him a better investor, what it takes to change a department, and his philanthropic plans.

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Why philosophy?

When I was in college in the late 1960s, early 1970s, I really didn’t have any exposure to it. I had the mistaken impression that it was rather fuzzy thinking and idle speculation, with little rigor attached to it. I was persuaded by a classmate to take a six-week class — not even a full semester — the last part of my senior year.

The class was in the philosophy of language, which is quite rigorous and analytical. That got me interested. I had to go into the Army during Vietnam (I had a very low draft number), and while I was in the Army I read a fair amount of philosophy. When I got out — casting about for something to do — I thought about going to law school, thought about going to business school, and neither of those things really appealed to me. And so, more to kill time than anything else, I thought maybe I’ll go to grad school in philosophy.

I found it as interesting in grad school as I had in the Army. I finished all my coursework and the qualifying exams for the Ph.D. but decided that spending several years writing a dissertation wasn’t going to do me much good since, (a) it’d be hard to get a job, and (b) I wasn’t sure I really wanted to be in the academic world anyway. So I left, and found my way to the investment world.

Philosophy served two purposes for me. One was that I found it intellectually, psychologically, and emotionally enriching. My life is a lot better for having studied it. Second, and maybe more surprisingly, the critical-thinking skills, the analytical skills, the rigor of philosophy were extremely valuable to me in analyzing capital markets, where there are a lot of different opinions, a lot of ambiguity, a lot of uncertainty — the very sort of thing you find in philosophical problems.

What philosophical ideas were most helpful to you in your investing career?

Philosophers try to figure out what’s true or not true. There’s the correspondence theory of truth, the coherence theory of truth — they have their pluses and minuses. I took some classes on the American pragmatists. Two of Hopkins’s early Ph.D.s were Josiah Royce and John Dewey. Charles Sanders Peirce, probably the intellectual godfather of pragmatism, taught there.

The issue the pragmatists focused on was the notion of: Is the idea useful? Can it get you from one place to another and advance your thinking? That for me was extremely valuable in analyzing capital markets.

How did this donation come to pass? Did you wake up one day and just decide to give $75 million to Johns Hopkins for philosophy?

The woman who runs my family office prevailed upon me maybe a year and a half ago. She said, You need to think about what’s going to happen when you’re no longer here, because unless the government is your favorite charity, you really need to figure out a way to get the money to something else. The government’s going to take half of it away.

I said: Well, good point, the government is not my favorite charity. I pay my taxes and am what I hope is a good citizen, but it doesn’t have the first claim on my philanthropic affections. Also, I’ve reached the point in my life that museums would call the deaccessioning phase: getting rid of stuff as opposed to getting more stuff.

There’s an enormous number of very worthy causes. But the way I thought about it was that if I gave money to the American Cancer Society or the Nature Conservancy, those things were already well-funded. There’s never enough money for them, but compared with other things, they are very well-funded. I wanted to think about things that had an impact on me, where significant money could really move the needle. I thought philosophy was a good place to start.

I talked to Ron Daniels, the president of Hopkins, and I know a couple board members. We had a meeting, and I asked what it would take to change the trajectory of philosophy at Hopkins. Beverly Wendland, dean of the Krieger School of Arts and Sciences, got involved, and the discussions came up with a number somewhere between $50 million and $75 million. The objective here is to get into the top-20 philosophy departments as soon as possible. And then, over the next seven to 10 years, to get into the top 10.

You’ve made strategic investments for a living, and The New York Times called this a “bet” on academic philosophy. Did philosophy seem, from a donor’s perspective, like a value proposition?

It depends on how the donor values the liberal arts — or anything that he or she is going to give money to. The $75 million, as far as we can tell, is by far the largest amount ever given to philosophy anywhere in the world. But John Paulson gave $400 million to Harvard. So there are a lot bigger numbers that are going into different areas. The broad question is: How much does the donor value the area?

I agree with the comment that Stanley Fish, a former Hopkins professor and literary critic, made about what the liberal arts are good for. He said they’re good for nothing. Instead, they are good in and of themselves; they don’t need further justification. I didn’t study philosophy because I thought it would help me in my career to make a lot of money, but it’s certainly done that.

Of course, when Paulson gave $400 million to Harvard, outspoken critics like Malcolm Gladwell challenged his decision.

To the extent that somebody has made money fairly and ethically, they can give it to whatever they think is useful. If it’s a popular choice, that doesn’t diminish the value of it. If we didn’t have private philanthropy, then the money would all be allocated by the government. Governments are going to allocate money for political, not economic, reasons. And so you wouldn’t have all the stuff the Gates foundation is doing with respect to malaria.

From my standpoint, I wanted to give to where it would make a difference, and to something unlikely to otherwise get funded.

You left a Ph.D. program in philosophy because of a difficult job market. What would you say to someone in a similar position today?

It’s basically what the lawyers call facts and circumstances. Some people are so committed to it that they would go with it and bounce around from a visiting slot to an adjunct to this or that. Other people, like me, did not consider the several years to do the dissertation to be a good value in terms of time versus the output. My son has a Ph.D. and teaches Victorian literature. He’s lucky that he got a job, but he likes that stuff, and great.

What are your future philanthropic plans?

There’s more to come. This was the first, partly because of the amount of time I spent in philosophy and the value that it had for me.

Ron Daniels gave me the hard sell on how much better it would be to do it now as opposed to in my estate, when I won’t see the benefit. If I want to, I can also get involved. I’m going to get a year of this behind me and see how it’s going. Probably the stuff that I will do in the future will again be similar to the Hopkins thing — it will be done sooner rather than later.

What kind of reaction have you gotten?

Usually these things have a very short half-life, but the folks at Hopkins have said that among the gifts they’ve got, this has had a long tail in terms of continuing feedback.

It’s good that people are paying attention, and it would be great if it encourages people like Carl Icahn, Leon Black, Peter Thiel, Reid Hoffman — all these guys who were philosophy majors or philosophy grad students with plenty of money — to give money to philosophy.

This interview has been edited for length and clarity.