How can we find the right answer when the question is flawed?

Are vice-chancellors paid too much? An accurate response must first establish what we value as a society, argues Rudi Bogni

June 10, 2010

I am a Libra: fairness, justice and equilibrium ought to be important to me. For a professional lifetime I have been involved in deciding remuneration packages (I still sign board remuneration reports). I strive to be fair and balanced.

I am asked: "Are vice-chancellors at UK universities paid too much?" Relative to what? To their added value? To their effort? To their own sense of self-worth? To US or European peers? To their managed budget? To their endowment fund?

The public is increasingly aware of the extravagance of certain pay packets: those earned by investment bankers, sportsmen and celebrities, corporate chieftains. The financial crisis has triggered outrage about the pay of bankers, whereas footballers and thinly clad starlets not only seem to escape such criticism, they even attract admiration: they are role models to millions. Corporate chieftains are not particularly targeted for criticism, unless they get involved in a muddle with their unions. Perhaps manufacturing physical goods is considered a more moral pursuit than manufacturing money in our deconstructionist era.

It was only a question of time before vice-chancellors' pay attracted scrutiny in an industry plagued by a sense of malaise and impotence and affected by an ideological chasm between managers and academics. In the UK, dependence on the public purse heightens the scrutiny.

Of course, the public is more easily upset by high pay in public service. There is an underlining assumption that those engaged in a role funded by the collectivity - academics, teachers, hospital workers, politicians, civil servants - ought to be inspired by a sense of mission and purpose, oblivious to their own more material needs.

This is laudable, but unrealistic: some of these knowledge workers do have families and no inherited wealth. They expect housing, entertainment and holidays commensurable to those of their social peers.

So perhaps we do have a problem in looking at remuneration. Interestingly, it is a problem common to both sides of the Atlantic - in the US, where the second question people ask you after "Where are you from?" is "How much do you earn?", as well as in the UK, where enquiries about pay are more indiscrete than questions about peculiar sexual habits.

I propose to you that the problem lies in our schizophrenic vision of the model society: we pretend that we would like an honest, fair, equal, morally and aesthetically pleasing society, but we also celebrate vulgarity, fame and infamy, kitsch and never have our fill of intrusive, gruesome and exploitative headlines. We know that most of us are losers, but we cherish the illusion and false hope of a "winner takes all" society.

What is our scale of values? What do we really want rewarded? Creativity? Achievement? Risk-taking? Administrative skills? Social and political competence?

We are prepared to worship privately the grotesque. How can we expect society to be ruled by different priorities?

How do all the Catos and Caesar's wives, who chastise the bankers for their pay, live their private lives? No handouts? No subsidies? No freebies? No sweet contracts? No expense-fiddling?

Blaming the market, blaming greed, blaming lack of rules or weak governance is escapism: it is blaming God for not winning the lottery when you cannot be bothered to buy a ticket.

Vegetable markets work well for their purpose, so do money markets when they are not tampered with; even markets for illegal drugs work admirably efficiently for their purpose. They do because they are mostly operated consistently with their purpose, regardless of its morality.

The market for labour is instead constitutionally doped. It is so, not particularly because it is much less transparent than other markets: people can lie, deceive, charm, corrupt, etc. In fact, markets can deal well with rotten vegetables, bad credit and cut drugs.

It is constitutionally doped because society has no clear scale of values for what is desirable. The purpose of the labour market is not clear; the debate about it is occasional and deeply hypocritical, even in the most democratic societies.

Until we are clear about whether winning the World Cup in football has more value for us than solving Fermat's Last Theorem, there is no compass to guide the labour market. I loved mathematics, but I became a banker because nobody else would pay for my expensive taste in cigars.

Blaming the vice-chancellors for our own indecision may be an entertaining blood sport, but it will not solve any problem; it is just a way of externalising anger about personal values being threatened and a vision of the academy being trampled.

Did I give the wrong answer? Perhaps, but the question is flawed.

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