Vying for the common good?

July 25, 2003

Open competition for research funds is the only fair way to go, says Steven Schwartz

The country, we are told, would be much better if research funds were further concentrated in a handful of universities. What is not often noticed is that these claims are just the latest salvos in the ancient war between the self-interest of a small group and the wellbeing of society as a whole.

A good starting date for this war is 1776, the year Adam Smith published The Wealth of Nations . His book was one long discourse in favour of competition. According to Smith, it ensures that production, the assignment of tasks and the uses of resources reach their optimal levels. It is the only way to guarantee that the general welfare prevails over that of any single group.

Smith's argument has never been particularly popular. People have always preferred to band together in small pressure groups to pursue their own interest, rather than to work for the common good. In Smith's day, merchants and manufacturers tried to convince the government to restrict free competition, arguing that such restrictions confer a general advantage when, in reality, benefit went to specific groups only. Nothing much has changed. Restricted trading hours, limits on access to the professions, monopolistic cartels, tariffs and quotas are still put forward as improving the overall economy. (Note that, despite Smith's supposed bias towards business, British businesses have no greater commitment to free competition than anyone else; they readily abandon free-market competition whenever they can achieve an advantage.) Vice-chancellors who argue for the special treatment of their institutions are just following in the long tradition of groups seeking special advantage, while claiming a general social benefit. They claim that world-class universities can survive only if the government concentrates its resources in the older institutions. They view free-market competition for research funding as "wasteful", distracting researchers from their creative work. If they were only freed from this time-consuming burden, then we would really see what they could do. Without competition, they would be world class. The whole country would certainly benefit.

Such sophistry is no different from manufacturers demanding import tariffs to keep out competition, or professionals wanting to restrict their number, or anyone seeking to rig the market for their product or services.

Henry Rosovsky, professor emeritus at Harvard University, puts the alternative view: "An unusual characteristic of American university life is its competitiveness." This stretches from faculty and research funds to students and public attention. "Institutional competitiveness is associated with some negative consequences - particularly if your university loses too many encounters with the market. I have no doubt, however, about the general beneficial effects of university competition. It has prevented complacency and spurred the drive for excellence and change."

Free competition among universities for research money works for the good of the country as a whole. It lowers costs, ensures that grants are used productively and guarantees that our researchers stay at the cutting edge of their disciplines. Some of our universities naturally want research restricted to them. They want their crumbling infrastructure and low productivity to be rescued from years of neglect by a monopoly on public funds. As Smith knew, however, such a monopoly provides no incentive to modernise or increase productivity; it simply leads to worse obsolescence.

What Britain needs is not another lobby group seeking sweetheart deals from the government, but open competition for research funds. The best researchers will win the funding - an outcome that surely is in the best interests of everyone.

Steven Schwartz is vice-chancellor of Brunel University.

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