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02/27/2005

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Corey

There are 1437 words in this post about university governance.

Not ONE of them is the word "student"

Of course, to be fair, it is about Harvard and
Harvard has very little to do with its students.

"But of course there would be no danger that the employees would stage a vote of no confidence, because every employee would take for granted that a CEO can be brusque, can chew out underperforming employees, can delegate as much or as little authority to his subordinates as he deems good for the firm, and can deny accusations of discrimination."

That's what I have been saying for years... corporate structures are fascist. The employees wouldn't dare vote.

Cornel West is a far more interesting and dynamic individual than Summers could ever hope to be. Their interaction is a perfect example of how intelligence and freedom of thought can be silenced or chased off by the exercise of CEO power.

I think it is time for everyone to admit that Harvard has become a parody of itself and find some new academic gods.

Palooka

Good post. What you describe seems to be a common institutional problem with governmental and non profit organizations (where the caretakers or employees seize control of the institution's mission). This phenomenon extends to public elementary and secondary education as well. Teachers believe the schools exist for their benefit, rather than to serve the public. Teachers' unions believe what is good for teachers must be good for students (not that they are always in conflict, but it does happen).

Corey

"This phenomenon extends to public elementary and secondary education as well. Teachers believe the schools exist for their benefit, rather than to serve the public."

Oh please, the teacher's unions are the only thing standing in the way of the final conversion of our educational system into a discriminatory for-profit standardized test training academy.

Teachers contribute a larger percentage of their take home pay directly back into their work than does ANY other profession. Next time you do your taxes, check out line 23 on the 1040 form. Teachers spend so much of their wages on supplies for the classroom that we have given them a special deduction to show our gratitude. I am still looking for the economist expense deduction.

The CEO spirit at Harvard nearly destroyed the best Afro-American studies department in the country, disappointing the settled expectations of hundreds of current students. Personally, I think Summers was just jealous because Professor West got to be in the Matrix movies. :)

If you want to see what private business interests do to a school, look no further than U Chicago, which specializes in... big suprise... promoting private business interests in every sphere of life. But hey, they have a record number of winners of the famed "Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel."

RWS

Judge Posner's analogy to worker's coops is excellent. I believe that how we design institutions is a critical factor in how they progress and develop. Non-profits consistently have the value-inhibiting problem of being dominated by the employees, who maximize short-term gain at the expense of long-term institutional effectiveness.

The problem is exacerbated where such employees have access to enormous sums of money in trust funds or endowments, which tend to insulate them from market pressures. Such is the case with universities, where faculty are armed with a virtual entitlement to slices of endowment money and tenure. These two factors are a major reason why Professor Becker's confidence in the market seems misplaced--market forces are very weak with these perpetuities in place.

I used to be in graduate school in the humanities. I left, because I could not personally tolerate the political correctness and the insulation from challenge that the endowment entitlement created. Trustees generally are deferential to faculty, because their own self-interest in long-term institutional effectiveness is altruistic, not financial (as with shareholders). They would understandably rather be cordial with the university community than make the tough choices that shareholders, for example, are accustomed to making.

Hopefully, once in a while, they will rise up and stand for the institution.

Jason Ligon

I don't understand the position that faculty should dictate policy.

Again, to abstract to the non educational world, it is generally accepted that he who pays for the factory gets to decide what to do with it. If the workers actually acquire the assets of a company either by being original investors or by buying out other owners, THEN they get to make administrative decisions concerning those assets. It is certainly not the case that just showing up to work entitles you to any discretionary authority. This arrangement, at a minimum, serves to prevent uninvested parties from dictating policy to those who are paying the bills.

In what sense has ownership of the assets of Harvard been transferred to its employees?

mums

Are all organizations the same? Do they differ not only in terms of composition, but also in terms of mission, purpose, vision, etc.? Even if we assume that universities can be compared to profit-making firms, what exactly is the product that universities sell? And who exactly are the customers, stakeholders?

When thinking about such questions, the case can be made that major research universities are different from liberal arts colleges are different from community colleges are different from high schools are different from pre-schools, etc. And that's not getting into differences between private, parochial and public schools in terms of management tools available to executives at each.

What a CEO can or cannot (does or does not, should or should not) do in the business/corporate world depends on the type of organizational culture s/he works within and the particular industry in which the firm exists. Industry determines many basic assumptions of a given business model (business model being shorthand for a particular understanding of the firm's mission, customers, shareholders, employees, stakeholders, product, market, role of capital, etc.).

mums

And what are the primary measures of success among universities? Is it endowment size? Is it "influence" in public discourse? Is it popularity? Is it reputation? Is it profitability? Is it stakeholder satisfaction?

Jonathan

Like Summers' remarks, this posting is itself very interesting and provocative. It is indisputable that faculty members have shorter time horizons than a university itself, and it is sometimes the case that their interests are not always perfectly aligned -- though in many cases they will be. But by this same metric why do you believe that Summers will act as a better agent for Harvard than his faculty? His time horizon as president is significantly shorter than that of most tenured faculty, and his own career interests are not perfectly coupled to the success of the institution either. Witness the fact that you declare Summers "the most exciting and dynamic president that Harvard has had since James Conant" without any reference to whether his leadership has actually benefitted Harvard.

Your answer appears to be that the trustees of the Harvard Corporation -- who presumably have nothing other than the interests of Harvard at heart -- will cure the principal-agent problem and ensure that Summers acts only in the institution's best interests. Putting aside for a moment the problems with this view that Professor Becker raises, you fail to take into account the fact that Summers helped appoint three of the seven members of the Board of the Trustees; and Summers himself is the fourth member.

Individuals with personal loyalty to Summers thus comprise a majority of the board. Regardless of how much a trustee might fear a loss of reputation were he seen as performing badly, it is untenable to suggest that a trustee would place this possibility of inchoate disapprobation ahead of the value of his professional friendship with Lawrence Summers (particularly after Summers has already demonstrated the value of said friendship, and particularly given the difficulty inherent to measuring whether a trustee is indeed doing a bad job).

By consequence, there is little reason to believe that the board will actually restrain Summers or move to replace him if he actions disserve the university unless the opposition to Summers is extraordinarily mobilized and impassioned. Why, then, will he necessarily act as a more loyal agent to Harvard than professors who have devoted far greater proportions of their careers to the institution?

John

Judge Posner is lucid and sensible, as always. I would offer just one technical revision: the CEO has not commonly been seen as the agent of the stockholders; rather, he/she is the agent of the firm, since the firm (through its board), not the stockholders, controls the CEO. Of course, as a practical matter, if a majority of the stockholders were sufficiently determined to have the CEO removed, they could vote out the current board and vote in a board that would be committed to the CEO's removal. But the stockholders do not directly have a say in whether the CEO stays or goes, and a board would be justified in retaining a CEO who they thought was best for the firm even if they also knew that a majority of the stockholders wanted the CEO removed.

I would also add that I have been a student at four universities -- 2 middle-tier large public schools, 1 highly regarded small private school, and (within the last 10 years) Harvard. Based on my experience, Harvard's reputation for academic excellence is entirely deserved.

David

Interesting post. I am no expert on college administration, and I do not know much about Harvard in particular, so my comments can only be general.

Universities are set up differently than corporations for a reason. They want to encourage independent thinking and academic freedom. Corporations do not want too much dissent, and their main concern is the bottom line. Thus, a university president is not like a hard-driving CEO. Faculty members expect to be treated with a bit more deference than the corporate guy in the cube. In fact, that's one reason why people forsake the financial rewards of the corporate world to become academics. They obtain a better lifestyle, more respect, and more control over their own work and work environment.

The presidency of a major university is an inherently political job. Sometimes, hard-driving tactics might help shape up a troubled institution. But they also will create enmity and thus should be avoided unless there is no choice. Is Summers a little rough around the edges because he needs to be or because he does not have the patience for politics? If the former, I applaud him; if the latter, his troubles are deserved.

Final note: if the CEO of a biotech firm stated, even hypothetically, that women are genetically inferior to men at science, he would be facing a revolt from within his workforce, and rightly so. It is bad management to make unsupported, provocative statements that can do no good and can only offend. Summers should have thought twice about what he said before he said it. It is a fair point that the under-representation of women on science faculties might be the product of forces other than discrimination. But there are more politic ways of saying that.

Michael Martin

The problem with limiting a university president's accountability to faculty is that there isn't another group _better_ informed and interested in proposed policies. While it may be true that tenured faculty do not have the long-time horizons, their horizons are at least longer than the students', or other employees'. Perhaps trustees know more about the financial implications of the president's policy decisions, but there are plenty of other implications for most decisions, even most financial decisions. Besides, in addition to English professors, there are economics professors, law professors, and physicists who might have meaningful contributions to make to the debate. There are more Rabis in the academy (especially at schools, like Harvard, with the huge endowments that presidents are responsible for) than Judge Posner is giving credit for.

RWS

I think one of the problems with excessive faculty discretion and control is that the endowment entitlement entrenches attitudes that can tend to place unrealistic or even counterproductive weight on the importance of debate and reflection, as opposed to real world understanding and the facts of life.

A major reason why the faculty tend to be systemically biased is because all of them are either partially or mostly funded by (1) the endowment perpetuity, (2) government funding, or both. It is this systemic bias, combined with the unfettered nature of tenure, which creates the need for the Trustees to exert some counterbalancing weight on the faculty as a whole.

A major purpose of the Rule Against Perpetuities, as well as state constitutional restrictions on monopolies and perpetuities, was to break up absolute power structures that can entrench themselves when an endowment, whether it be of land or money or title of nobility, becomes close to an absolute right. Universities and the faculty in particular have succeeded in capturing a big perpetuity. At Harvard, it's now over $20 billion!

Michael Martin

What has become abundantly clear from the emerging differences in opinion between Becker and Posner is that Becker is the only one with bona fide conservative creds. Haven't faculties been the university for a long, long time (since faculties, after all, are what makes a university)? Maybe all those years of deciding cases rather than making them have made Posner flabby in his conservative principles. I wonder if anyone has ever shown whether newer judges tend to be more incrementalist in their judgments. Circuit court judges must grow accustomed to receiving so little feedback on their decisions. Academics, to effect change, have to be persuasive. That in itself may be a reason to leave the status quo alone.

Couldn't the university circumscribe faculty involvement in decisionmaking without eliminating it entirely in favor of oversight by trustees?

James

It might be worth considering the real value that students get out of attending a school like Harvard. Certainly, part of it is the education itself. Still, it's hard to believe that the instruction is so much better as to justify Harvard's "premium" - its ability to attract the best students and some of the best faculty in the country. In all probability, many students attend Harvard as a signal to future employers: see, I got into an extremely selective school, I must be brilliant. There is circularity here: Harvard can afford to be selective because it gets so many applicants, and it gets so many applicants in part because it is selective (and can thus send a meaningful signal about its students).

So I think we have the ingredients for path-dependency. It's a coordination game in which the best teachers and students identify a focal point and go there. It could as easily have been somewhere with better weather. In this view, Summers is fine as long as he doesn't disturb the equilibrium enough for a new focal point to emerge. In fact, he sits in a position of unique power, since the accidents of history have made his school the preeminent university in America. I suspect that this is the real reason for the controversy: control of this focal point is a valuable ideological tool, and interest groups are flexing their muscles to assert their dominance.

Of course, being the most selective isn't the same as being the "best." Summers can help decide if Harvard will be a dynamic source of new ideas, like the University of Chicago, or a backwater college with a mediocre football team, like Williams.

Loweeel

James, Williams is THE best D-III athletic school in the entire nation, which is why it is the only current D-III school to have been awarded the Sears Cup. Incidentally, it's also currently ranked #1 among liberal arts colleges, and has been for the last several years. When was the last time Harvard -- or Chicago, for that matter -- was ranked #1?

Harvard also has substantially more students than Williams just on the undergraduate level, not to mention the hordes of graduate students.

If you want to talk about inferior backwater colleges, look no further than AmHerst.

Charlie Bourne

I would suggest our universities are unique institutions that have developed organically over several hundreds of years in free societies, with their origins and enduring distinguishing features in ecclesiastical communities, not corporate business. There is no reason why business methods might not be usefully employed to examine the contemporary operation of these institutions that have so many modern elements (in purpose and funding as well as governance and structure), but it will not in the end help explain their internal processes. For all the innovations in size, cost and government regulation of higher education, the role of fundraising, and the impact of race, the university still wears its medieval costume to conduct its business.Faculty (especially in humanities and social sciences), like their ecclesiastical predecessors are as much ideologues and sectarians, as workers - even if they are committed to and produce top rank independent research (Professors Posner and West are excellent examples). There is nowhere where their conflicts are likely to be more intense, or triggered by small or symbolic statements by those who possess leadership status than in the places where they are the ministers. They have their flocks - their students - to think about, and their extended flocks (their readerships). It was the same when heads of Colleges espoused a (new) ecclesiastical vision, which it was believed represented its imposition.There is much arrogance and vanity in this, and even dementia, but even allowing for this, the relationship of academics to their institutions and to their leaders (in the University and their departments) will never be properly explained in rational terms. That University Presidents fall foul of one or another of the forces that have led them, eagerly, to take up their posts (and it is not a simple matter of appointment to a job, but the outcome of long a long process with many formal and informal components). Periods of great success and harmony may turn into conflict, failure and bitterness. The history of the American presidency is not complete without considering Woodrow Wilson's time at Princeton. Any University head who has the independence of mind of say what he thinks, will nevertheless looks at the institutional complexity with which he has to work, in which mamy will have the ability to frustrate him even if they can do nothing constructuve, and decide whether or not there is an issue worth fighting. If not, it is best to placate and get on with power.That said, one should add that since the 2000 and 2004 presidential elections, the liberal elite (who dominate the university faculties) have in their frustratio turned with increasing venom on any Bush-substitute. Summers is in part the victim of this essentially empty but dangerous thrashing, and he is is well advised to placate it, and watch it soon turn on another.

Corey

"the liberal elite (who dominate the university faculties) have in their frustratio turned with increasing venom on any Bush-substitute."

That is silly, this has nothing to do with Bush or a Bush substitute, and by the way Larry Summers was a CLINTON cabinet secretary. At issue here is corporate governance of universities, and since BOTH political parties in the US are to varying degrees pro-corporate, your attempt to characterize this issue as part of the FOX News "culture war" is rather unhelpful to the debate.

The only people likely to oppose Posner's CEO-ification of universities are 1) the students, who would perceive it as yet another obstacle to self-determination in education, 2) the faculty, who as someone pointed out often chose academia for its non-corporateness, and 3) those few remaining fans of free-thought in the US/UK.

And of course category #1 and 2 would have to exclude those students and faculty at places like U Chicago who are willing to sacrifice their own free thought to the double-plus-good agendas of the ruling class in the hopes of diversifying into some scraps from the bacchanal of lassiez-faire capitalism. (Present company excluded of course.)

Fred

At the risk of seeming a simpleton, I'm not sure anyone has yet explained what the purpose of a university is.

Is the main goal to educate students who will go on to create a better-functioning world? Is it to gather great minds who will do important and useful research? Is it to create a space free of the pressures of society where pure thought can gain purchase? Is it (more realistically) a diploma mill that punches young people's tickets on the gravy train? Is it a sort of self-sustaining quasi-corporation that needs to regularly raise money to keep on going?

Who does the University primarily serve? The students? The faculty? The administration? Society?

Until we have decent answers to these questions, it's hard to say what the place of a college president actually is.

TheWinfieldEffect

"Their interest is to get as much from the institution as they can before they retire; what happens afterwards has no direct effect on them unless their pensions are dependent on the institutions continued prosperity. That consideration aside (it has no application to most professors' pensions), their incentive is to play a short-run game, to the disadvantage of the institution...."

Posner ignores that professors are not solely motivated by cold hard cash. Some professors are interested in their legacies and reputations, which are bolstered by the continued and future prestige of the institution where they spent the majority of their careers. Legacies' and reputations' value exceeds one's lifetime; they can also be a gift to one's children and grandchildren, or an indicator of quality (e.g., Black's Law Dictionary is highly prized as a reference tool because Black made a name for himself). Any professor interested in his legacy or reputation would seek to improve the institution where he is tenured. He would not seek to exhaust the resources before he is gone, but rather would consider himself a trustee of the institution's purpose and ideals. He would not have a short-term view. Posner is wrong.

James

Loweel- Yes, Williams has had a run of good luck with its football team, punctuated by regular devastating losses to Amherst. If the term "backwater" means anything, though, it's no contest between Amherst and Williamstown. One thing we can all agree on, I think, is that the western side of Massachusetts has far better schools than the eastern end.
By the way, the first Heisman trophy was won by a player at the University of Chicago.
Finally, Corey (who wrote "And of course category #1 and 2 would have to exclude those students and faculty at places like U Chicago who are willing to sacrifice their own free thought to the double-plus-good agendas of the ruling class in the hopes of diversifying into some scraps from the bacchanal of lassiez-faire capitalism.") - get a life! Students and faculty at the University of Chicago are some of the most independent-minded in the world. If you don't like the traditional Chicago approach to economics, fine - but recognize that:
1. Chicago is not monolithic. Its faculty provides a wide array of viewpoints on economics. See Steven Levitt, both Posners, et al.
2. Even if Chicago truly were in thrall to free-market economics, that would be far from pro-corporate. In general, corporations are not big fans of the rigors of the marketplace, and they seek to circumvent it as much as possible.
3. Of course, motivation is something that can only be guessed at, but I suspect that most Chicago faculty could make far more in the private sector than they do teaching. They do it at least in part because they reject corporate constraints on intellectual curiosity. If they truly were scrounging for capitalist scraps, surely they could do better than the south side of Chicago and a teaching salary.

Marc Gersen

Before claiming that the trustees can best guard the true interests of the university, Posner ought to define what the objective function of the university is.

RWS

Intellectual honesty and freedom to express hypotheses without facing a witch hunt would be a convenient starting point.

The point of this controversy is not what the raison d'etre of Harvard or any other college is. It is the fundamental idea that good faith, plausible hypotheses should be treated with calm, rational deliberation. Getting the vapors over something which may be uncomfortable and instigating a vote of no confidence does not contribute to that basic platform... especially among science faculty. That's what makes the whole thing so ridiculous.

R

From what I've seen, U Chicago students, in all departments, are extraordinarily weird people. For many, that is a bad thing. If you are weird yourself it is comforting. Regardless, it is hardly a school of pre-corporate conformists. There is a difference between an econ nerd and a soulless pre-MBA (a big difference). For the latter try Duke University.

Now someone will jump on and sing the praises of Duke. Let us all praise our alma maters and cease talking about policy, about which everyone on this thread only speaks nonsense anyway.

Corey

Cornel West was one of the few academics at Harvard that was able to recognize the racist nature of capitalism and competition.
Competition between people of unequal natures will naturally lead to the person of lesser ability into slavery.
That is what I mean when I say capitalism leads to slavery. Because it embraces difference between people and speaks of comparative advantages, it must also embrace the master-slave dialogue.
I would not be looking to Cornel West for answers were it not for the inherent racism of lassiez-faire economics.
Furthermore, let me add on the teaching issue, that holding teachers accountable is merely a wedge of the right. Allow me to elaborate:
As anyone who has gone to public school, from kindergarden to undergraduate studies (and nonreligious private school for undergraduate studies) teachers obviously have liberal biases. I don't deny that. But that isn't what is at issue here. The right will say that they are brainwashing our children with their propoganda, will speak of "parents rights" and lead us to a complete privatizing of education, where people get taught what they wish to, rather than what the government mandates.
If we are to continue this country, we must allow the government to have its say to young people from a very early age. That

Jason Ligon

"Competition between people of unequal natures will naturally lead to the person of lesser ability into slavery.
That is what I mean when I say capitalism leads to slavery. Because it embraces difference between people and speaks of comparative advantages, it must also embrace the master-slave dialogue."

Let me be up front in stressing that there are numerous dimensions along which this argument makes no sense to me. Without implying anything whatsoever about racial differences from my perspective, it seems to me that the basis of this argument is extraordinarily racist. What does unequal natures mean here? Aren't you saying that capitalism's failing is that it is intrinsically UNINTERESTED in race, instead focusing on the ability to compete?

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