Greed is the going rate

Don't blame v-cs, argues Alan Ryan. It is the entire social system that is corrupt

June 10, 2010

I do not think I have ever been accused of being excessively fond of vice-chancellors. Nonetheless, the witch-hunt over their pay is silly: it is not that they are underpaid, overpaid or paid just right, but it is the wrong target. I do, in fact, admire many heads of universities just this side of idolatry: Alison Richard has managed the University of Cambridge with a clear-eyed efficiency and low-key charm that shows how valuable her years studying lemurs in Madagascar were as a preparation for herding cats in Cambridge.

And David Watson, the former vice-chancellor of the University of Brighton whom I first met 30 years ago when a Council for National Academic Awards committee was validating a degree he had proposed at Crewe and Alsager College, was obviously destined for great things. Whether we understood that the boy philosopher before us was Sir David in the making, I cannot say, but he had the intellectual verve and administrative capacity that one longs for in vice-chancellors, deans, heads of department and the like.

In the US, Princeton University has had a string of vastly successful presidents - Bob Goheen, Bill Bowen, Harold Shapiro and Shirley Tilghman - and my former colleague Amy Gutmann has been stunningly successful as president of the University of Pennsylvania. Even when I have been unkind about vice-chancellors I have been close to, I thought they were trapped by bad institutional arrangements and bad advice. John Hood would have been a great provost - the manager of the university's resources - if the University of Oxford had ever had the sense to follow Yale or Princeton and create such a position. And Sir Colin Lucas would have been a wonderful president with someone like Hood as provost.

As it was, Lucas had the rhetorical gifts of Demosthenes, and could have led us into battle with anyone, but we might have found ourselves short of rations and ammunition, whereas Hood was all too likely to provide rations and ammunition for a battle nobody wanted to fight. Most institutions need two people at the top, one to enthuse the troops, and one to do the maths. It is hard to do both in anything other than a very small institution. In small institutions, you can behave like a Victorian headmaster and do the accounts in your head while you beguile and enthuse. Large institutions demand specialisation, with beguilers at the top and analysts immediately behind. And beguilers should do a stint as provost, first.

So, in the latest round of "are vice-chancellors grotesquely overpaid?" my answer is emphatically "yes" and "no". Here is why. On the side of "yes", management is neither difficult nor psychologically demanding. Leadership is mostly positional. Organisations need someone whose role is to say "That's it" - to say that a decision has been taken. Many academics are hopeless at it, because it is definitive of an academic issue that it can be reopened indefinitely. In practical matters, the moment arrives when getting on with it is what is needed, and someone has to blow the whistle, fire the gun, drop the flag, whatever. The only temperamental aspect of the matter is the ability to do it and get on with the next thing without unnerving everyone by expressing anxiety in public.

On the side of "no" is the fact that people with the ability of the better vice-chancellors could make more money in other walks of life. They would make more money as partners of top City law firms. They would make more money even as civil servants with a managerial sinecure and half a dozen non-executive directorships waiting for them on early retirement. What they get is the going rate for a "top job".

The crucial question is why this is the going rate. The answer is that salaries are set by a sense of "normality". The bad news is that the current normality is corrupt and unhealthy. Over the past 30 years, there has been what you can only call a capitalist counter-revolution. By the end of the 1970s, Western capitalism seemed to be on its last legs. Between inflation, rising wages, declining rates of profit, resistance to increased rates of tax and the like, the postwar settlement had collapsed. Astonishingly, the counter-revolution succeeded; in the past 30 years, the top 1 per cent of Americans have collared 33 per cent of the entire growth in gross domestic product. The UK figures are not far different.

"Top salaries" - the pay to the top half per cent or so - have everywhere been inflated by the success of the financial sector in pocketing huge sums with no reference to what people have done for their money, let alone the impact of increasing inequality on society at large. That produces a contamination effect, so that everyone who comes into contact with them wants more money, and where you can set your own pay - as people in top jobs can pretty much - you get it. This is bad news. Increasing inequality is bad for health and happiness, and inequality within many organisations is bad for their health, too. When Lord Mandelson tells us he is seriously unconcerned about people becoming "filthy rich", he means he is unconcerned about the health and happiness of the rest of us.

Vice-chancellors are not to blame for being overpaid; nor even are the outsiders from banking, law and so on who sit on remuneration committees and fix their pay - although universities would be better off without them. It is a cultural and political tide of the kind that in the past has been reversed only by depression and war, or controlled by a sense that it is shameful to grab whatever you can get away with. The first two are cures worse than the disease; and of shame there is no sign. Perhaps Vince Cable will emerge as the Savonarola of our day; but in any case he should start with the lawyers and the bankers.

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