Tenure--Posner's Reply to Comments

A number of interesting comments, as usual. I respond to a number of them here. On whether unions promote efficiency, a commenter was correct to point out that unions can benefit members, but they do so but restricting competition among workers. While this may raise the wages of unionized workers, it harms nonunionized workers (as well as consumers). If because of unionization an employer's wage bill rises, its demand for labor will decline, which means that fewer workers will be employed. By the way, in response to another comment, the decline in unionization in the private sector seems to me better evidence that union-protected employment is less efficient than employment at will than a study would be. It is the real market test. One commenter suggests that tenure increases the incentive of workers to invest in specialized skills. This may be true, but observation suggests that employers are able to encourage such investment without granting tenure. All sorts of nontenured private-sector workers, including doctors, lawyers, and engineers, invest in specialized skills. Becker explains the mechanism: specialization in firm-specific skills may make a worker more dependent on his employer, but it also increases the worker's value to the employer. One comment perpetuates the very natural error of thinking that Einstein was employed by Princeton University. He was employed by the Institute of Advanced Study, which is located in Prdinceton, New Jersey, but is not part of the university. Princeton U. has garnered a great deal of prestige from the co-location of the Institute! Another and more germane misunderstanding is that tenure is guaranteed employment. That is not correct. If a college shuts down, it does not have to continue paying the tenured faculty. And I think without being certain that if a university closes a department, it doesn't have to retain the faculty of that department on its payroll. In effect what tenure guarantees is that you won't be replaced--even by a better candidate! Iincidentally, I do not suggest that a university or other employer should be forbidden to offer a tenure contract if the employee is willing to accept a compensating reduction in wage. The problem is asymmetric information. If the employee asks for such a contract, the employer may wonder whether the employee has private information that he is not sharing--for example, that he doesn't intend working hard any more. I agree that tenure protects academics against being fired because of their unpopular ideas, but there are other forms of retaliation that are almost as effective. If there is a market for the unpopular idea, the fired professor can find another job. If there is no market, he's likely to be ostracized by his peers. I would like some examples of where tenure made the difference between production and suppression (presumablly temporary) of a genuinely important idea. One comment misunderstands me as advocating abolition of tenure for civil servants. Not so. All I said was that I didn't think the Supreme Court in the name of the First Amendment should have abolished the spoils system. I emphasized that when performance measures are unavailable, which they often are for public services, the creation of a "high commitment" environment, including tenure, as a substitute for high salaries to compensate for risk of being fired for nonobjective reasons, may be optimal. A spoils system may well be less efficient than a tenure system, yet the tenure system may be less efficient than employment at will in settings in which performance measures are feasible. I do think tenure for judges makes sense, because without it the judiciary would be excessively politicized. I do not have tenure in my part-time teaching job at the University of Chicago, and I think that's fine.

Comments

[Chris J]

A person who enters into a given field of employment that offers tenure does so because they value a tenured position more than they value a non-tenured position, ceteris paribus. This value is subjective across individuals as person A may very well not care about tenure while person B sees its sex appeal. Now, whether or not tenure is viewed as a positive or negative aspect of certain types of employment is also in the eye-of-the-beholder. A person who has tenure and is tired of their current job may quit whenever they feel like it in pursuit of something more fulfilling, whether it be a new job, family, travel, basically whatever they deem to be of utmost value to them. If they want a higher wage then they should submit to non-tenured employment and join the at-will employment universe. However it is worth noting that at first this person did value a certain wage ceiling for tenure more than he did value the higher wage for no tenure, now his values have switched for whatever reasons. But it is the switch that I think is the most important idea to focus on. If, for example, we lived in a society where there was only tenured employment or vice versa, things would be a lot different. Without the freedom to chose between which type of employment you wish to pursue over your lifetime our choices would be severely diminished. Certainly tenure has its caveats, whether seen as advantages or disadvantages, but it promotes certain levels of diversity that are necessary to promoting market processes that without we would be at a loss, whether or not you feel tenure is a good or bad thing. I think that doing away with tenure would lead to negative events, most notably the further decline in people seeking higher degrees for tenured positions as professors.

The debate about the qualifications required to obtain tenure, whether or not a person deserves such a position, whether or not somebody could do it better, etc. are worthy of an entirely fresh discussion.

[anon]

"If there is a market for the unpopular idea, the fired professor can find another job."

True, but there are switching and search costs. These are often real and substantial. Look at what happened to a (formerly) Wheaton professor that converted to Catholicism.

"If there is no market, he's likely to be ostracized by his peers."

'ostracized' is a verb above. It implies that people are intentionally excluding a person. This, to me, is a little bit different than a lack of a market. A lack of a market may not be intentional. People may be oblivious to the lack of the market. With ostracism, the ostracizers are often aware of the person or idea they are excluding. Keynes has a quote that says something to the effect that it is better to fail conventionally than succeed unconventionally. I kind of agree. People, including management, enjoy commiseration with others who enjoy the same plight.

"I would like some examples of where tenure made the difference between production and suppression (presumablly temporary) of a genuinely important idea."

Some people might not want to teach in certain public schools given lack of tenure. The discipline problems with kids are so high that the job is too low paying and too risky without tenure. I am very not sure on this. I suppose someone could argue that tenure and bad teachers perpetuate bad schools. Anecdotally, I do not see support for this latter argument. Many kids in the U.S. have access to more stable and stronger people through teachers and administrators at public schools than through their mom and dad at homes. Tenure attracts stable and consistent people to work in otherwise difficult situations.

[Corey]

The problem with tenure as something bargained for in Posner's free contract world is the same information assymetry he mentions, but viewed from the workers point of view:

Imagine that you are a hard worker who wants to trade a lower wage for increased job security. How can you bargain for this? You know you intend to work hard, but the employer thinks you want job security because you intend to be lazy. The minute you ask the question you are rejected for the job.

Unions make this easier because the bargaining process is not conducted against the background of judging individual worker's potential commitment to the company.

It is nearly impossible to ask for job security outside of collective bargaining or industries where tenure is regulated. Treating tenure as a matter of individualized bargaining is just a way to ban it from practice without looking like you are doing so. Only the few most excellent and desired candidates will ever have the leverage to ask for tenure.

[Eteraz]

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[Kossuth]

To add to Corey's point above: the assymetry of information between workers and their employers is larger still--to the poin that it undermines the idealistic free market principles that Judge Posner advocates. Workers don't know what share of value they add to a product. Moreover, they lack so many other metrics about what they produce and worse yet (for them), without some kind of place at management's table, they lack a context within which to situate these metrics.

Moving from acknowleding this asymmetry between worker and employers, I can't help but wonder if it is, in fact, the source of a larger counterpoint against Judge Posner's notion that the "free market failure" of unions is the conclusive evidence of their inefficiency. Sure they're inefficient, not as workers, but as a group of people shut out from knowledge of the market they work within--hence their need for unions, i.e. their need for a unit that matches the corporation's ability to manage and track the information of the marketplace (sorry, the owners don't share).

I also can't help but wonder, too, if Judge Posner might in fact mean profitability for the owners, period, rather than simply the ability to generate value via product, when he talks about efficiency, for when we think of efficiency as a group of workers' ability to add value, efficiency might be measured differently than it is simply on the employer's bottom line. In Judge Posner's view, are unions less efficient simply because they take profits away from owners and spread them out, as salary, to the people who do the work? Looking forward to more on this, though the rest might have moved on to this weeks' posts.

[Elton]

Workers don't know what share of value they add to a product.

I'm not sure why they need to in a free labor market -- they only need to know what they can earn at similar jobs from other employers. If it's a competitive industry, then the marginal value of that employee will be priced into what companies are willing to pay him or her.

[Thomas Brownback]

--The Externalities of Unpopular Ideas--

"If there is a market for the unpopular idea, the fired professor can find another job."

Unpopular ideas might provide some value to society as a whole, even when providing very little to employing institutions.

These unpopular, unmarketable, even wrong ideas encourage others in the field to think and write on the subject, perhaps developing more robust theories as they go, developing more good ideas.

Academia often works in dialogue, so employing some devil's advocates or straw men along the way might not be so terrible. Certainly, any individual institution would prefer not to employ the straw men, though the system as a whole might benefit.

Our intellectual history isn't a succession of completely independent and original thought, but from countless brilliant responses to problematic ideas.

Basically, I'm just suggesting that an idea can be "genuinely important" even without being widely adopted, or even though it might be quickly rejected.

On the other hand, even without tenure, I'm not sure we'd have a real shortage of bad ideas. (Some people use the internet to contribute their bad ideas to professors in their spare time, for free!)

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