Summers' Resignation and Organization Theory--Posner

On February 27 of last year, almost exactly one year ago, I posted a longish note about the organizational issues raised by the controversy between Harvard President Lawrence Summers and his faculty critics, a controversy that has now culminated in his resignation. Here is what I said (with a few deletions and other minor changes), based on my almost 40 years as either a full-time or part-time university faculty member and my current interest in organization theory (I am also an alumnus of the Harvard Law School): "The 'case' against Summers made by his faculty critics is a four-legged stool: he had the temerity to challenge the absenteeism of a prominent faculty member, Cornel West, who as a result resigned in a huff; he is peremptory, perhaps even rude, in his dealings with faculty; he refuses to consult faculty on administrative matters, such as the expansion of the campus into Alston, across the Charles River from the traditional campus; and, most notoriously, he challenged the conventional left-liberal view that any underrepresentation of a group in a prestigious activity (e.g., women on the science faculties of Harvard) must be due to discrimination rather than to preferences or capabilities. "For these actions, Summers--the most exciting and dynamic president that Harvard has had since James Conant--has been (or at least has felt) compelled to undergo a humiliating course of communist-style “reeducation,” involving repeated and increasingly abject confessions, self-criticism, and promises to reform. He has been paraded in a metaphoric dunce cap. "To appreciate the sheer strangeness of the situation, imagine the reaction of the CEO of a business firm, and his board of directors, if after the CEO criticized one of the firm’s executives for absenteeism, ascribed the underrepresentation of women in the firm's executive ranks to preferences rather than discrimination, dealt in peremptory fashion with the firm's employees, and refused to share decision-making powers with them, was threatened with a vote of no confidence by the employees. He and his board would tell them to go jump in the lake. 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. "If, however, for employees we substitute shareholders, the situation changes drastically. The shareholders are the owners, the principals; the CEO is their agent. He is deferential to them. Evidently the members of the Harvard faculty consider themselves the owners of the institution. "They should not be the owners. The economic literature on worker cooperatives identifies decisive objections to that form of organization that are fully applicable to university governance. The workers have a shorter horizon than the institution. Their interest is in getting 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 institution’s 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--and for the further reason that while the faculty as a group might be able to destroy the institution and if so hurt themselves, an individual professor who slacks off or otherwise acts against the best interests of the institution is unlikely to have much effect on the institution. "All this is true of Harvard. The faculty are interested primarily in their own careers, and what is good for their careers and what is good for Harvard are only tenuously connected. The individual faculty member who denounces Summers knows that his denunciation is unlikely to bring about Summers' departure, and even if it was decisive, and even if Summers is the best president that Harvard could find, an inferior replacement would be unlikely to do so much harm to Harvard as to have a discernible impact on the career of the denunciator. What is more, that replacement might be more inclined to kow-tow to faculty, enhancing their careers at the expense of the long-run health of the institution. "Apart from the misalignment of faculty and university interests, faculty at research universities, like intellectuals generally, tend not to be responsible participants in collective action, such as university governance. The academy does not select for people who have interpersonal skills, because most academic research is either solitary or conducted in groups of two or three, though there are exceptions, primarily in the hard sciences. In addition, faculty are highly specialized, many in fields wholly unrelated to the financial and other practical questions that loom large in a university as large and affluent as Harvard. "Universities are increasingly complex enterprises. Harvard has a multibillion-dollar annual budget. It is ludicrous for English professors to think they have a useful contribution to make to decisions involving budgetary allocations, building programs, government relations, patent policy, investment decisions, and other key dimensions of modern university governance. They are in no position to balance Summers' strengths in these areas with what they consider his weaknesses in relations with faculties, or his ideological views that they find offensive. "Because universities are organized as nonprofit entities, there are no shareholders, and hence no owners in the conventional sense. As a practical matter, the university's trustees (the members of the Harvard Corporation) are the owners; they control the endowment and the other assets of the university and they appoint the president, who in turn appoints the administrative staff of the university. The trustees' interests are better aligned with the university's interests than the faculty's are. The trustees do not have a personal financial stake in the university's success, but the position of a trustee of a major university is prestigious and even visible, and trustees who botch their job will experience embarrassment and loss of reputation. "Of course, as part timers and (mostly) outsiders to academia, the trustees cannot actually manage the university. Nor do they try. Their principal function, besides general supervision and assistance in fund raising, is to hire a president, and to fire him if he performs badly. (So they are much like the board of directors of a business firm.) That is a limited function which a board of trustees should be able to discharge competently. The president is the CEO and he has both a reputational and a financial stake in the success of the institution. The president and his administrative staff, not the trustees--and not the faculty--should manage the university. The role of the faculty should be teaching, research, and appointments (subject to override by the president or provost) within their field of academic specialization. "So I would like to see faculty think of themselves as employees and leave governance to the university’s president. And for the further reason that preoccupation with governance is a distraction from teaching and scholarship, and so reduces faculty output. In doing so it compounds the bad effects of academic tenure, an institution that reduces the productivity of many academics. "Against all this it can be argued, first, that competition among universities will assure good performance regardless of the governance structure and, second, that a comparison of American with foreign universities shows that our universities must be doing something, or rather a lot of things, right, because our universities are the world's best. Competition is indeed a powerful force for efficiency, but interuniversity competition is blunted by a variety of factors, including the lack of a profit incentive and the difficulty of evaluating a university’s output. "I agree that our universities are the best in the world, but comparisons of this sort are invitations to complacency. (If the Harvard trustees were complacent, they wouldn't have appointed Summers president!) When the United States had monopolistic regulation of the telephone industry, as it did until the breakup of AT&T, we had the best telephone system in the world. When we lost the war in Vietnam, we had the best armed forces in the world. When the Civil Aeronautics Board administered an airline cartel, we had the best airlines in the world. We have the best universities, but I believe that they would be even better if they were governed differently. My belief is supported by the fact that American universities are evolving in the direction of greater conformity to the principles on which private businesses are run. The time has come to retire the faculty slogan '“we are the university.'” __________________________________ The passage of a year has reinforced rather than undermined what I said about university governance. It is clearer now than it was then that Summers' policies--ranging from greater emphasis on science, on modernizing and rationalizing the undergraduate curriculum and improving undergraduate teaching (a serious Harvard weakness since time immemorial), and on intelligent utilization of Harvard's extensive real estate, to tuition remission for students from families of modest means and blocking weak tenure candidates in weak disciplines--are entirely sound. It is also clearer now than it was a year ago that Summers' blunt manner (I would prefer to call it forthright) were not the decisive factor in the faculty revolt that has led to his fall from power. (Whether he was forced out, or he merely concluded that he could no longer be effective as president without the unwavering support of the Harvard Corporation, is unimportant.) What was crucial was that he challenged the worker'-cooperative model of university governance (a model adhered to more closely by foreign universities--which is one reason they are on average inferior to our own), that an influential fraction of the faculty rebelled, and that a timid and inept set of trustees were unwilling to back Summers against the rebels. I knew a year ago that Summers was embattled; I never thought it a battle he could lose. I am greatly disappointed in the Harvard Corporation and would be gratified to see its members resign in embarrassment. One sign of the Corporation's ineptitude is its decision that there shall be an 18-month period in which, in effect, Harvard will have no president and the faculty will consolidate its power. But as serious is the signal that the Corporation is sending to potential candidates. The signal is that only individuals willing to be weak presidents need apply for the job--individuals willing to concede a veto power to the Faculty of Arts and Sciences and devote their presidency to fund-raising, glad-handing, and back-office management. Eugene Robinson, in a good-natured column in the Washington Post defending Summers' resignation but expressing hope that Summers, whom Robinson appears to admire, would become an active member of the Harvard faculty, argues that such a change in roles would mean that he was "no longer an ineffective herder of cats but once again the big cat he was meant to be." Cats cannot be herded, but faculty members merely do not want to be herded. They have soft jobs with life tenure. The loftier the institution, the greater the salary and prestige and the softer the job. So little is demanded that retirement has few attractions. The result is a faculty many of whose members are both smug and superannuated. Summers' resignation should, but will not, precipitate serious thinking at Harvard about transformative change. The following suggestions, quixotic in the short run, are offered as aids to thinking imaginatively about the governance of the nation's most prominent university: 1. The members of the Harvard Corporation should resign; their successors should rescind Summers' resignation. 2. The reconstituted Corporation should redefine the lines of command of the university, making clear that faculty are not the owners or "citizens" of Harvard, but rather are honored employees. 3. A purely consultative University Senate should be created so that the university administration can obtain reliable, representative expressions of faculty opinion. 4. The president of the university should be authorized to appoint the department chairmen. 5. The anachronistic institution of tenure should be reexamined and perhaps jettisoned. The market for university professors is highly competitive; a good person whose contract is not renewed can get a comparable job elsewhere. (See my post on tenured employment of January 15 of this year.) 6. A generous buy-out program should be instituted in order to encourage early retirement and thus provide greater career opportunities for young academics. If the suggested measures precipitated some, even many, resignations of faculty, the quitters could easily be replaced with individuals of equal or higher quality.

Comments

[Bild]

Snowball,
If, hypothetically, a sociology department deserved to have its budget cut or even increased more slowly, what are the chances that you could find a sociology professor to make this judgment -- even the most astute sociology professor?

[Aaron Bergman]

Kirk -- the number of academic jobs will remain the same. It's the quality of the people that you have to worry about.

And, given that our higher education system is one of the best things this country has, I'd sort of like to have a nice supply of quality people in there.

[snowball]

Bild: Of course a sociologist will defend his field. That's to be expected. But one of the reasons to *ask* before deciding that a particular department isn't worthy of support is that the department might, you know, change your mind. For example, someone in the department might have undertaken some particularly valuable or insightful research that helps explain a long-misunderstood phenomenon, or that helps give insight into a thorny policy problem. The decisionmaker deciding resource allocation might (gasp) actually learn something and shed unfounded preconceptions.

It seems that many members of the Arts and Sciences faculty came to believe that Summers was making such decisions based on his gut feeling about the relative worth of scholars in various fields. Given his comments (i.e., that economists are smarter than political scientists, who are in turn smarter than sociologists), that suspicion may have been correct.

In any event, Judge Posner's suggestion was that resource allocation is essentially a technical matter unfit for the non-technical types in academia. That is simply silly. Resource allocation, in this context, is not a technical decision. It represents a value judgment about which fields are essential to a research university, and also a strategic judgment about which fields may contribute to the long-term health of the university. I can't imagine why faculty members should be shut out of that conversation.

[Corey]

UChicago has wholeheartedly adopted the unitary executive/corporate governance form. Here its project seems to be export.

Apparently (based on Becker's post and reports from students) Chicago is a contentious, harsh, and competitive academic environment. Most if not all of the scholarship and blogging from UChicago supports the unitary executive and corporate governance form. These generalizations are linked.

Harvard faculty have successfully resisted a transition to this model. I have no love for Harvard, but I celebrate this as a victory. I suggest we let UChicago have its cold-hearted competitive model. I further suggest we let Harvard attempt to rebuild its Afro-American Studies Department and proceed in all departments to provide a valuable cooperative counter-discourse.

What happens if every University adopts the corporate governance model? Well, then the corporate governance model is the only model that can be conceived. All else becomes crime-think.

The only idea that the marketplace of ideas can't admit is the idea that something exists beyond the marketplace. You cannot sell continental critique at UChicago. If you don't believe me, try comparing Law Reviews. Everything is alienable once corporate governance rules the day. Summer's admitted project was rationalization of the curricula. As Adorno and Horkheimer said: "Enlightenment is Totalitarian"

[Corey]

"If the suggested measures precipitated some, even many, resignations of faculty, the quitters could easily be replaced with individuals of equal or higher quality."

Quality eh? What an objective sounding word. I bet we could even come up with a ranking of quality and publish it in USNews. Perhaps we could supplement the rankings with opinions on individual quality from intellectual luminaries like Posner and Summers.

Oh and of course quality would have nothing to do with the degree to which the professor's scholarship reaffirmed the status quo, right? And of course sarcasm is intended.

I think that Cornel West was an individual of the highest quality. I do not think that he, or Appiah, can or will be replaced. Perhaps Afro-American studies is one of the "weak disciplines" that Posner refers too, it is not clear from his post. I think it is a vital and exciting department, importantly located in an elite institution with a history of excluding such things. Was it harmed by Harvard's experiment with corporate governance? Was the entire school harmed by Summers' experiment with sexism?

[Mark]

The supposition that tenure is a major factor in the recruitment of faculty perhaps misses the reality of real-world decision-making. I would submit that those interested in a cushy, well-paid situation with a high level of job security would opt for federal and state bureaucracy or the like. In the social sciences, public school teaching offers similar pay, easier tenure, and no research requirement.

My experience is that academics choose the academy not because of dollars or security, but because they enjoy the life of the mind. This is not easily quantifiable, but ask your neighbor the academic why they suffered through grad school and I doubt they will respond by gleefully proclaiming "tenure!"

Assume that the hypothesis of tenure being a motivation is correct. The current job market, especially for humanities PhDs, is dismal. There simply aren't as many tenure track positions around, due to existing tenured professors' delaying retirement and institutions' financial calculus. One would expect that the decreased chance of landing a tenure-track position would be reflected in a paucity of applicants for graduate programs. Has this been the case? If not, perhaps we should re-evaluate the tenure hypothesis.

[Mark Vaughan]

One issue that doesn't seem to be getting much attention in the discussion--the impact of large government subsidies on university governance. Won't the size and structure of these subsidies slow down much-needed reform?

[Rad Geek]

Posner: "The economic literature on worker cooperatives identifies decisive objections to that form of organization that are fully applicable to university governance. The workers have a shorter horizon than the institution. Their interest is in getting as much from the institution as they can before they retire ...."

This attempt at a nutshell summary of a brief against worker co-operatives seems to commit a serious economic fallacy.

It's true that workers (industrial, professional, or otherwise) generally have "a shorter horizon" than the "institution" that they work for. But that's true of all mortal human beings, not just employees, and the "institution" makes no decisions and takes no actions independently of the decisions and actions of mortal human beings.

So the proper comparison here is not between the horizons and incentives of workers as against the horizons and incentives of the institution, but rather the horizons and incentives of shareholding workers as against the horizons and incentives of shareholders not working for the institution (henceforward: absentee shareholders), and if your concern is for the long-term flourishing of the institution, the questions at hand become (1) whether absentee shareholders have longer "horizons" than shareholding workers, or vice versa; (2) whether absentee shareholders are less likely than shareholding workers to milk the institution for personal gain within the "horizon" of their own relationship to the institution at the expense of the long-term flourishing of the institution, or vice versa; (3) whether absentee shareholders are more willing and/or better able than shareholding workers to discover the best means of serving the interests of the institution within their short-term horizons, or vice versa; and (4) whether absentee shareholders are more willing and/or better able than shareholding workers to discover the best means of serving the interests of the institution beyond the short-term horizons of their personal relationship to the University.

These questions are important, and I think not obviously to be answered in favor of control by absentee shareholders, at least not in every imaginable case. (And since the structure and goals of the University make it an atypical case compared to factories, restaurant chains, shipping companies, and other for-profit enterprises, it seems like special caution is needed here.)

But they remain unasked as long as we pretend that the mystical body of The Institution will somehow be making decisions once mortal workers are no longer playing a substantive role in decision-making.

You're going to need a much stronger case before you can justify such a radical set of policy proposals as the "accountable to none save the Board" platform for University CEOs that you've outlined here.

[Robert]

An observation: Summers headstone should read-
"Here lies Larry Summers,
Victim of Political Correctness"
The only trusim in this entire sordid chapter is that placating the P.C. beasts only whets their respective appetites for greater concessions. Churchill's description of appeasement, i.e., the belief that if you feed the crocodile he will eat you last, is entirley applicable. Summers' mistake was in groveling to the P.C. crowd in the wake of his controversial--and yet highly defensible--comments concerning the number of women in the sciences. Rather than sate the appetities of those who were offended, such acts and statements only signaled weakness and invited greater boldness on the part of his opponents. The eventual result was the end of Summers' presidency at Harvard (and proof that the inmates are running the asylum?). Do we dare take this lesson as proof of how we, as a country, must act in light of a world filled with terrorists and their P.C. apologists/defenders?

[Aaron Bergman]

This is not easily quantifiable, but ask your neighbor the academic why they suffered through grad school and I doubt they will respond by gleefully proclaiming "tenure!"

I would. I know plenty of other who would, too. So, maybe I'm overgeneralizing from my own experience (in the sciences), but I can't imagine going through all this crap without the hope for tenure down the line.

One would expect that the decreased chance of landing a tenure-track position would be reflected in a paucity of applicants for graduate programs. Has this been the case?

As usual with economic arguments, this neglects the fact that people aren't rational decision makers. Most of the peopel I knew in grad school knew that the number of jobs were small, but had large enough egos to think that it would be the other person who wouldn't get the job.

[Student]

You need to echo these sentiments in an op-ed in either the New York Times, the Washington Post, or the Wall Street Journal. It is important that people hear what you have to say, Judge. I am genuinely worried about the state of our great American universities. The larger they become, the more I worry that their quality might falter for organizational reasons. Please contact one of the papers. It is important.

[N.E.Hatfield]

At the Macro level, the Summers/Harvard issue is somewhat akin to the Napoleon/Europe analogy. Here is a strong willed and perceptive indvidual who dragged Europe into the modern age Kicking and Screaming. And for his efforts was sent to Elba and St. Helena. Same with Summers, on only a much smaller metaphorical scale.

Where as, on the Micro Level, it's an interesting study in group dynamics and interpersonal relationships and organizational behaivor. Perhaps the University and the Board will learn something from it and move into the twenty first century. But, I kind of doubt it.

[Arun Khanna]

Enron Ali said: This "hypothesis" doesn't even need to be tested, it has been empirically verified beyond question.

This is rich coming from the person who is telling others they don't understand the scientific research method.

Enron Ali goes on to say: Yet it seems to be the basis for his critics' claim that he said women are cognitively inferior to men. I stand by my earlier point that much of the original criticism was based on willful misrepresentation of his remarks, and that unless you don't know what a standard deviation is, there's little to disagree with in what he actually said.

If one wants to test Summers' hypothesis, they would look at skewness and higher moments, not standard deviation. Which reminds me that Enron Ali also doubted other people's knowledge of statistics.

In sum I hope Enron Ali realizes that he is commenting on the Becker-Posner blog.

On a different note, perhaps Enronal's disquiet holds a lesson. Given the actions of Harvard's faculty of arts and sciences, people may not give benefit of doubt to Professors in even major research universities. Perhaps besides Harvard, academic associations in arts and sciences should re-examine this issue [Neither is going to happen but...].

[DAB]

I agree with Judge Posner that professors are not the appropriate persons to run the institution, but for slightly different reasons. Professors' perspectives, like those of employees of any institution, will always be biased towards their own (or their department's) needs, rather than the good of the institution as a whole. That is one of the primary benefits of hierarchical management such that ultimate decision-making authority is vested in a decision-maker whose success is measured by overall performance rather than of a part of the system.

Professors are tasked with producing distinct "products" (i.e. informative classes, research, etc.) just as the workers at GM's plants are charged with making automobiles. That is the fallacy in the argument that professors should run the show because removing them would remove the core of the university. In any enterprise, removing those persons who make the product would undermine its existence, but that does not mean the producers should therefore run the show.

Who should run the institution and for whose benefit? In the corporate model the answer is simpler, but I am surprised at Judge Posner's characterization thereof. It is my understanding that the ultimate authority of a corporation lies not with the president/CEO, but with the Board of Directors. (Isn't that the thrust of Sarbanes-Oxley, not to mention common-law fiduciary duties of directors?) Why? Because directors are (at least in theory, notwithstanding a trend toward relaxing their duties) supposed to serve as fiduciaries managing the assets (i.e. the corporation) of owners (i.e. shareholders) because the shareholders cannot do so themselves due to their numbers, and lack of incentives and skills. Corporation management is, at least in theory, accountable to the Board, and the CEO serves at the Board's pleasure. Thus, a CEO is incentivized to make the corporation successful because his or her job depends on running the corporation in accordance with the shareholders' interests (as determined by the Board, their fiduciaries).

That brings us to University trustees, who under the corporate model should run the institution in the sense of holding ultimate decision-making power. The problem, as identified, is for whom are they "trustees"? To whom do they owe fiduciary duties and to whom should they be accountable?

The best answer may be to alumni. Alumni have a strong interest in upholding the long term academic quality of their universities because the value of their degrees, and resulting effects on their own careers, reputations, etc. is dependent on the continuing reputation of their schools. A school's reputation for academic quality might be called the value of alumni's interest in the university.

Alumni are also entitled to some sort of "ownership rights" because they have generally contributed "capital", both real, in the form of their tuition dollars, and intangible, in the form of their participation in the school and their effects on the university during their academic career, as well as their effects on its reputation by virtue of their post-graduation career. Alumni are also the main target of universities' fund raising drives, as we all know ;), which in itself provides an incentive to run universities in accordance with alumni's interests.

I suspect many academics would find this model alarming, but I believe it is, at least in part, part of the current approach, and perhaps a desirable part of it. More focus on it could also lead to accountability for professors, with the desirable result that "research" would mean searching for truth and new ideas, rather than confirmation of existing dogmas; and that universities would be forced to create a marketplace of ideas, valuing diversity of thought just as alumni in the real world have diverse views, rather than the groupthink, ivory-tower isolationism that prevails too often in universities today.

[David]

As I am not a Harvard alum, I find it a bit amusing how deeply so many people seem to care about the fate of Larry Summers. It seems that his resignation embodies, to many, either all that is wrong with academia or all that is right with it. May I be politically incorrect for a moment and submit that perhaps it is neither? By most press accounts that I have read, Larry Summers appears to have been the victim of his own rough demeanor rather than of some great political struggle. He simply ticked off a few too many people over the last five years to remain an effective leader of the country's most famous (as opposed to "best") academic institution. We have all seen well-meaning people lose everything by putting their feet in their mouths one too many times. I submit that the lesson to be learned from Summers' departure runs no deeper.

[Bill Korner]

The Posner comment does not evaluate Summersí role in the ousting of the Dean of Arts and Sciences. Maybe his organizational theory does not have anything to say about the role of such a ìdivision headî in the corporate enterprise that is higher education, but if it does have something to say it would be nice to know what.

Generally, Posner seems sympathetic to the political institutions of a public corporation. But most people would not defend them as political institutions for a state. Indeed they are often criticized as illiberal or worse. So much more argument is needed as to why they suit a university, even if we were to take for granted that they are optimal for whatever it is that we expect public corporations to do. (I do not take this for granted.)

Posnerís points about employee loyalties may be well taken and yet still amount to a (partial) indictment rather than defense of the form of organization he favors. If the politics of corporations (or universities or, for that matter, countries) are such that employees or citizens are uninterested in the enterprise beyond what they can personally get from it, then that fact (on its own) speaks badly of the form of organization. It seems reasonable to expect that an optimal form of organization would be one in which the participants have something at stake besides their own narrowly defined self-interest. This is likely true, on the one hand, because there is some intrinsic good being a part of a project that you support instead of merely treating as a necessary means to your earning a living, teaching the subject you love, etc. Itís also likely true because commitment to the goals of an organization is prima facie conducive to furthering those goals better.

As for shareholders, they face well known collective problems that prevent them from disciplining management. The trustees are, Posner says, analogous to the board. But there are no shareholders in a public corporation such as Harvard (as Posner acknowledges). So the analogy breaks down or is complicated in a way that requires further explanation.

Posner refers to the supposed incapacity of university faculties for collective action. But this also might be an apt criticism that cuts against rather than supporting his point. Perhaps other faculties should be engaged in cooperative research to the extent that (Posner says) hard science faculties are. Perhaps there are defects in the organization of universities that are preventing this. Also, why should we believe that academics supposed incapacity for working together on research implies that they cannot effectively participate in university governance? No arguments were offered there.

Also, Westís absenteeism was not Summerís only beef with him. It may not have been the most important factor in his criticism of West. Nor, if accurate, was it as controversial a criticism as Summersí disapproval of Westís extracurricular activities.

I reluctantly agree that Summersí ousting was unfortunate. Not that I share his attitude toward West or women in science. I share neither. But I think that universities do need to have difficult conversations and that certain orthodoxies are, in fact, functioning as band-aids that cover up issues in great need of discussion.

[logicnazi]

As to the arguments with pay and tenure I think the idea that English profs would be just as good if we significantly reduced compensation (i.e. tenure) is greatly mistaken.

Yes as an english prof they might not have skills that are in high demand outside of academia. However, I would argue that the abilities that make one a good professor in anything have a high correlation with general intelligence, and in the humanities perhaps skills at speaking or presentation/writing. In other words if you didn't make academica an attractive option these people might very well go become succesfull buisnessmen.

Also I'm sure someone else has pointed out the importance of tenure in academic freedom/unpopular research.

[logicnazi]

Also I think posner's comment that English profs have nothing to contribute to financial deciscions should be read as saying English profs in general have nothing to add not that intelligent ideas/comments by english profs couldn't happen occasionally. However, it does seem right that insofar as one is concerned with how to handle the money (what sorts of investments to make) consulting the english profs (or math profs, or cs profs) doesn't really make too much sense. But if one is concerned with the values that underly those choices (should we favor research or education) they have just as much expertise as anyone (at basic value judgements not derived ones).

However, the fact that english profs aren't experts really has nothing to do with how much power should rest in the faculty body. As posner seems to understand in the rest of his post the question of whom should ultimately have the power through the indirect means of elected officials is not about expertise but motivations. It makes sense to give the US citizen the ultimate power in the US because it is the interests of the country as a whole that the government is supposed to serve. As I argued above I think that the professors as a whole have motivations most closely parrallel to those of the university as a whole so it also makes sense for ultimate power to rest in them.

[DAB]

Addendum to my previous post: to make the model
consistent with the corporate one, trustees' duties
run to the institution, not directly to shareholders
(in my model alumni), but alumni could exercise
control through voting trustees in and out. And
alumni could always have shareholders' derivative
rights... but my point is the "executive" should be
accountable to some one, the trustees, and they
should also be accountable to some stakeholder,
in my model, alumni.

An interesting debate on this board is the argument as to whether governance based on our federal government model or the corporate model is superior. Does it depend on whether one sees a university as essentially a producer or rather a mini nation-state? IMHO, a university's purpose is more akin to a corporation, the purpose of which is to produce something for its products' purchasers (students), for the benefit of its owners, than a nation-state, the purpose of which is to perpetuate the good of its citizens.

The governing of corporations has at times left much to be desired, but so too has our democratic republican form of government. Problems in both systems generally arise from the same source-- a lack of accountability of elected officials. Such failures are not indictments of the governing structures so much as a result of institutionalized tolerance of non-accountability.

[Richard Mason]

In previous comments, I have compared tenure to the stock option packages received by executives in a corporation, and to shares of a general partnership.

The more I consider it, the more it seems to me that tenure is effectively a way to give a profitable ownership share of a non-profit organization.

If universities were actually for-profit corporations, then they could compensate their employees with grants of shares or stock options. Like tenure, grants of stock options would (a) not be an immediate cash expense for the corporation; (b) have a true cost which was hard to measure; (c) be thought to encourage employee loyalty and align the employee's interest with the corporation's interest, although as we know, neither tenure nor stock options function perfectly in this regard.

However since universities are non-profit organizations, they are stuck with tenure as an ownership-stake-like form of compensation. Giving out shares of trusteeship of the university would be problematic, since the shares could not be sold and members of a non-profit corporation cannot financially benefit from their membership.

Perhaps some market-minded university should create a market in "tenure shares"! Of course, I suppose this is what Posner means by a "buy-out program": the university will buy back tenure shares from some professors, at the market price.

[Bill Korner]

DAB: The default assumption should be that different institutions need different governance structures appropriate to their particular purposes. Posner would like us to adopt the working hypothesis that public corporations' governance institutions would be a good model for universities. I responded skeptically, by pointing out that virtually everyone agrees that the corporate model is not for EVERYTHING (in particular it is not for government). So we need an argument why universities and corporations have so much in common.

One response to this is indeed that corps and universities have or should have profit making in common (unlike government).

But the distinction between for-profit and non-profit is way to thin a distinction on which to base a choice between corporate-like and democratic government-like institutions. Posner's argument is painting with way to broad a brush in my opinion.

[Bob K]

Lots of straw man arguments here.

Larry Summers failed to be an effective president because he tried to bully the faculty at FAS the same way economic professors bully students and lower rank professors.

And this is not just an interpersonal skills issue, it makes me wonder who rises to the top of academia, the most brilliant or the biggest bullies.

No mention of the "tawdry" Shleifer affair here either and their consequences for Russia's people.

After reading the Institutional Investor article why should I believe top economists are really concerned about poverty, development or welfare?

[Dan C]

This is a bit of a digression, but I had an acquaintance who taught at both the University of Chicago Law School and Harvard Law. She told me that she was surprised how well the faculty at the University of Chicago worked together. People with very different world views were able to work side by side.

She claimed that at Harvard, she felt, the different sides often acted as if they were at war with each other. Some camps really hated each other.

I have no idea if that is because of the structure of the schools, the personalities involved, or how close you might be to New York. I would assume that a few can set the tone, and a generation can pass before the echoes stop.

Perhaps the Arts and Sciences faculty at Harvard is more interested in winning minor battles rather then having real academic debates that lead to meaningful insight and knowledge.

[J. Goard]

logicnazi:

"If we try and connect non-discrimination with equality of group ability we are going to get fucked if one day we ever do discover a correlation between ethnicity, gender, or whatever and ability in some area."

Oh, you mean like how the gay rights movement got fucked a few decades ago, when its radical element had to abandon tabula rasa Marxist heterosexuality-as-grand-historical-conspiracy arguments? Nope, instead it latched onto the improved lay view of human nature, swapping out huge chunks of ethical reasoning, and it kept its momentum.

[N Linssen]

It is clear from David's comment that I did not make my point clearly enough. First, note Judge Posners comment that "Summers' resignation should, but will not, precipitate serious thinking at Harvard about transformative change." Kissinger's remarks are appropos to the situation at Harvard because this dispute was not about the future of the university. Let's not be distracted by the faculty cabal's disingenuous argument about Summers' ineffectiveness as a leader; this was about executing a vendetta. It was petty. And there was little at stake for the faculty because they aren't putting their jobs on the line, nor are they apt to change the direction of the university by removing the president. On the contrary, the faculty has effectively voted in favor of organizational inertia.

If I understand Judge Posner's argument, Harvard would be better off if the role of the faculty more closely resembled an employee model rather than a worker cooperative model. I agree with him. I understand that this might have negative implications for "academic freedom," but does such a thing even exist at Harvard anymore? I think the Harvard faculty has made it pretty clear that it will not tolerate provocative questions, so perhaps it is time for the faculty to explain why it deserves the privilege of academic freedom in the first place.