Monday, September 29, 2014

Is this what they mean by "running a university like a business"?

When a university is "run like a business," the implication is that wasteful redundancy and costly inefficiency should be eliminated. But of course determining whether you are being efficient about the way you are running your business, or cutting the soul out of the enterprise, requires defining what business the university is in. My previous post about the marketplace of ideas notwithstanding, I don't want a system that eliminates Egyptology so Computer Science can grow. In fact, Egyptology is holding its own in the marketplace of ideas at Harvard; Peter der Manuelian teaches a cool Gen Ed course to captivated students, including some I have directed to the course. (Interesting fact: der Manuelian took an intro CS course from me while he was an undergraduate here. You can do a lot of things with a little CS, as I keep saying.)

The question of the day is, given that executive compensation in the private sector has grown out of proportion to the wages of the labor force, and (as Paul Krugman details today) the disproportion at the upper end of the executive hierarchy has grown to a degree few of us can imagine, should the same hold for non-profits? After all, the same forces that justify paying big salaries to the op executives of for-profit companies -- competitive pressures, the value returned by top talent, etc. -- justify paying them in charitable non-profits. Don't they?

There is something that doesn't feel right about that, given the commitment these non-profits make to serve the public good -- and to have taxpayers underwrite their operations, if in no other way, by exempting them from taxation.

Which brings me to the article I received today that got me thinking about all this -- about not Harvard, but the University of Chicago. It's written by David Mihalyfy of the Harvard class of 2002, now a graduate student at Chicago. It documents the amazing run up in compensation for several top administrators at that university.
New analysis of tax data from publicly available IRS 990 forms shows that eight high-level UChicago administrators have received more than $7.6 million in compensation increases since 2007-2008, even as the school moved toward and suffered a credit downgrade.
Over five years, administrators enjoyed pay increases of between 40 percent and 135 percent, and as a result each received $450,000 to $3.3 million from cumulative increases by the end of 2012-2013, the most recent year for which tax data is available.
UChicago thus ended up paying $2.5 million more annually for the combined services of these eight people — an increase from $3.4 to almost $6 million per year.
And we wonder why the public is skeptical that we have done everything we can to hold down the cost of our product.

Bonus links:

A fascinating Bloomberg piece on the history of fundraising for endowment, an art first developed into a science by none other than Harvard's greatest president, Charles William Eliot.

A lovely Bryan Marquard obituary for one of the all-time great marketers of ideas, Irven DeVore. And a terrific David Warsh column giving a nod to the marketing skills of David Malan, and pitching an important idea about computer science education.

I will have to return to say more about Homi Bhabha's citation of Deresiewicz's epistemological dogma ("a subjective perspective," -- "subjectivism should not always be confused with solipsism"):
“We ask of a scientific proposition, ‘Is it true?,’ but of a proposition in the humanities we ask, ‘Is it true for me?’ ”
(Deresiewicz actually attributes this formulation to Lionel Trilling.) It does not take the "willful ignorance" that Bhabha attributes to me to wonder what this means or where it will take us.

Here, by the way, is the full video of Deresiewicz's appearance at Harvard, complete with Bhabha's introduction.

1 comment:

  1. It is not so bad to compare running University with successful business, anyway they have to build a structure that can meet all needs and demands. At the same time students should realize that it is not just the place where they can spend time, it is really the first step which brings them closer to the career. Sometimes it can be better to apply to college essay help online and devote this time to things that can give you money now or in future. However comparing education with business, people shouldn`t forget about some values.