Campus currency

Shakespeare, Einstein, and the Bottom Line

May 28, 2004

Terence Kealey learns that chasing private cash can keep education healthy.

The Western world's first modern university, Bologna, was founded in 1050 as a law school by a group of young men. Commercial law in Italy was then growing as the market recovered from the fall of the Roman empire, but no one was training potential commercial lawyers, so the young men of Bologna founded their own law school hiring - and firing - the faculty. Soon afterwards, young men in Padua and some cities in southern France were launching their own universities.

But academics did not appreciate being hired and fired by their students, so universities such as Oxford and Cambridge were soon founded by the scholars themselves. Yet overarching both scholars and students were the church and state, and only too quickly the universities had ceased to be autonomous but were, rather, the creatures of a jealous clergy and a suspicious state. We have the church to thank for our clerical titles including chancellor, dean, reader and doctor.

To this day, stakeholders still fight over universities. Should we be primarily centres of liberal thought, research or vocational teaching? Should we be funded and controlled by the state or the market? And if we are to be public rather than private institutions, who - scholars, businessmen or social engineers - should determine which goods are truly public?

In this delightful book David Kirp, professor of public policy at the University of California, Berkeley, tells the story of markets in US higher education. Fifty years ago, people were predicting the eclipse of the independent universities, and people expected the fee-dependent Harvards and Yales to succumb to the well-funded state systems of California and Michigan. But over the past few decades we have seen government subsidies in the US diminish, and tuition fees and endowments grow ($18 billion at Harvard University alone). And we have seen all universities - subject to ever more competitive pressures within an ever-expanding sector - chase the for-profits for private money.

Do competition, markets, growth and private money damage the universities? Kirp wants to say "yes" but his facts argue the opposite. In a series of chapters, some co-written with graduate students, Kirp examines case studies, generally positing one university or president against another.

His subjects include Columbia University, Darden Business School, DeVry University (a for-profit), Dickinson College, Harvard, Massachusetts Institute of Technology, New York Law School, New York University, Berkeley, Chicago, Michigan, Virginia universities and our own Open University.

Kirp asks what happens to those universities that treat their law and business schools as cash cows (to support the liberal arts and central administration and services) compared with those universities that allow their postgraduate professional schools to retain their profits. Kirp asks what happens when a university invests its donations in an endowment fund as opposed to investing (as NYU did) in buildings and faculty. Kirp asks what happens when a university such as Chicago automatically owns the intellectual property rights its academics produce as against Stanford University, say, which vests it in the academics. And Kirp asks what happens when a university such as Columbia or the OU embarks on distance learning in the US (not a lot). He also asks what happens when universities invest in stellar faculty, leaving teaching to adjuncts and postgraduate students.

Along the way, Kirp recounts the recent histories of the five major classes of US university (state, independent, liberal arts, community college and for-profit) and tells how they respond to competitive pressure (not always honourably; he tells amusing stories of Ivy League admissions officers hacking into competitors' computer files). And I will never again trust a ranking in US News & World Report now that I understand how US universities - whose home lives are so unlike that of our own research assessment exercise - manipulate the system. Yet the underlying facts speak clearly: competition, just as when Adam Smith compared Glasgow and Oxford universities, improves higher education.

This book, though American, is also familiar. I had understood that Tony Blair was destroying British higher education by over-expanding the system, but Kirp explains how the expansion is market and student-driven and universal. And the conundrums that US researchers face when they negotiate with industrial funders are also familiar.

This book, which is essentially a piece of reportage where senior academics are quoted comprehensively on their personal experiences, should be read by anyone who aspires to run a university, faculty or department, because the questions of ownership are as alive today as when the young men of Bologna fired their teachers.

Terence Kealey is vice-chancellor, Buckingham University.

Shakespeare, Einstein, and the Bottom Line: The Marketing of Higher Education

Author - David L. Kirp
Publisher - Harvard University Press
Pages - 328
Price - £19.95
ISBN - 0 674 01146 5

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