The Erosion of Social Norms Guiding the
Are we witnessing a major shift in the relationship between the federal government and universities? To speed up the industrialization of the nation in the nineteenth century, the U.S. government provided free land and revenue to start land grant colleges. In the twentieth century government-sponsored research rose sharply, especially after Sputnik. Yet now the federal government proposes taxes on university endowment earnings and graduate students’ tuition stipends and wants to dictate which international students universities can admit! Is this a fundamental change in the norms which guided the government-university relationship in the past, or only a temporary setback created by a particularly anti-intellectual administration that dislikes academia, distrusts scientific research, and sees universities as dominated by a liberal elite?
In a recent article in the New York Times (November 30, 2017) Professors E.J. Levine of the University of North Carolina at Greensboro and M.J. Stevens of Stanford University describe the current reality: an economy where median household income has stagnated while university tuition keeps rising.
They argue that the old social contract was damaged beyond repair before the present administration was elected: “When student loan debt eclipsed the total amount that Americans owed on their credit cards in 2010, a rebellion against fancy academics was well underway. Institutions once deemed essential partners in nation-building came to seem overstuffed and defensive – they enjoyed generous tax breaks, yet crankily rebuffed calls for cost containment. This is the historical context in which Congress is summoning universities back to the bargaining table.”
Why has this shift been met with so little collective opposition from the academic community? Senior academic administrators of the universities that have to pay the new tax on endowment income must have jointly lobbied against it; and graduate students, nationwide, did successfully lobby against taxation of their tuition benefits. But these two specific responses, one successful and the other not, against two specific government policies, do not indicate widespread resistance to government’s intrusion on universities’ autonomy to manage their own resources. This is particularly surprising because the government has not managed its own resources well. In fact, the recent reduction in corporate taxes is likely to further increase fiscal deficits.
This thought had occurred to me first in 2007 when Senator Charles Grassley of Iowa spearheaded a federal initiative to force universities to spend more of their income from endowments. I was Chair of the MIT Faculty then and remember a discussion in Academic Council about how to respond. Lobbying by university presidents might have stopped Senator Grassley then, but what really hurt that governmental initiative was the sharp drop in the stock market, which reduced endowment earnings to negative numbers. Now that the stock market is bullish, the government is back taxing universities for saving and investing well.
Levine and Stevens do not explore why universities in general have raised tuition, particularly since the mid-1980s. Public universities faced severe budget cuts from state governments, and raising tuition was one way to handle the sharp decline in resources. Private universities may have had other reasons for raising tuition, such as the decline in government support for research, the growing cost of managing research facilities, and the increased cost of the university administration as its activities and investments increased in complexity with rapid globalization. By the end of the 1980s, with the collapse of the Soviet Union and the emergence of the Internet as a major technological change, most universities were under pressure to become more entrepreneurial. They devised new strategies for revenue generation, including large-scale investments in real estate, not only to construct up-to-date dormitories, but also to build innovation hubs for entrepreneurial activities that promised new streams of revenue. In many cases American universities, both public and private, looked abroad for additional revenues by creating joint research centers and universities, even in nations that differ sharply from the U.S. in their political systems. The rapid progress and spread of information and communication technologies presented yet another set of possibilities for revenue generation.
Both public and private universities also made significant efforts to raise endowment funds. In the 1980s, university capital campaigns sought to raise hundreds of millions of dollars; by 2000 the campaign goals had increased to billions. In this fundraising climate, universities accepted donations from everyone.
While courting funds from wealthy donors and wealthy governments, irrespective of their stance on any social issues, universities assured their trustees, faculty, and students that no donor could chip away the universities’ autonomy to follow their self-established missions. This argument was put forward even when universities accepted funding from private firms to conduct particular types of research that would benefit those firms. In fact, universities courted close ties with private firms – and they could do so because of new real estate holdings. In sum: universities celebrated the new era of entrepreneurship with a wide range of programs, and the new information and communication technologies enabled them to reach far beyond their traditional catchment area as the entire world wanted to learn from U.S. universities how to become entrepreneurial.
Why does the government want to change the norms of its relationship with American universities when they have been so successful as entrepreneurial entities? There could be many possible explanations, which are probably better understood by senior academic administrators than by me. Nevertheless, I want to share my concern with the readers of the Faculty Newsletter: that precisely because of their entrepreneurial roles, universities have become more market actors than non-profit institutions. In an economy characterized by rising inequality of individuals’ income and earnings, universities cannot advocate for equality when the income gap between wealthy universities and their relatively poorer counterparts has also steadily widened over the last 20 years or so. No wonder then that no unified group of institutions of higher learning opposed the government’s recent initiative to tax the endowment income of the wealthiest private universities, even though this new government tax policy signifies a direct attack on the universities’ autonomy.
The stratification of universities as institutions competing for new revenue and global rankings does not seem much different from the way people view corporate entities. The annual announcement of university presidents’ high salaries in leading newspapers adds to this perception of the university as a corporate entity, not a place primarily for education and learning. The recent ranking of universities based on a ratio of income earned by recent graduates to total tuition paid for college education is emblematic of the way average citizens view education as yet another commodity in the market place.
Why weren’t faculty as organized as the graduate students in opposing the new tax laws? Political opposition to government policies is not new to American campuses. From protests against the Vietnam War in the 1960s to the more recent marches against immigration policies barring international students from certain Muslim countries, faculty have vocally opposed government policies they consider unfair or ill-intentioned. Perhaps faculty do not perceive the tax on endowment as a direct attack on their interests. Or perhaps they have come to view the university as a business enterprise in which they are not stockholders. Faculty may be glad to see their universities making a good return on endowment investments, but rarely do they realize any direct benefits from such returns in terms of higher salaries. In contrast, when endowment income declines, as it did in 2007-2008, faculty have been asked to accept a freeze on annual salary increases. What’s intriguing is that faculty rarely oppose salary freezes, perhaps because they are grateful for relatively stable employment. As a recent study cited in the Chronicle of Higher Education (January 24, 2018) has shown, faculty also make a tradeoff between salary increases and flexibility in their work schedule.
Whatever may be the reason for their lack of response, faculty need to be aware of the larger significance of changes in the government-university relationship.
As the old norms are chipped away, faculty may face a situation where the value of tenure is questioned, retirement rules are reformulated, faculty productivity is monitored by groups outside the university, and academic freedom is equated with free speech, as Joan W. Scott recently warned in the Chronicle of Higher Education (January 7, 2018). The assault on the autonomy of the academic community may begin with small steps geared towards reducing the privileges of only its wealthiest members, but it may not end there unless the entire community – and that includes faculty, students, and administrators – is vigilant.
A majority of the graduate students who so forcefully opposed taxes on their tuition stipends are now interested in forming unions and, thus, being treated as employees, I suppose, in educational enterprises (The Tech, February 1, 2018, p.1). This is another sign that knowledge production is being viewed increasingly as a profit-making and reputation-building activity whose benefits should be passed on to “the workers.” Should the association between faculty and students be reduced to a contractual relationship guided by labor laws? Or, are educational institutions places of learning where relationships between mentors and mentees are guided by higher motives not reducible to market forces?
That U.S. universities have benefitted in many ways from working closely with market institutions cannot be denied, but the mission of universities is greater than the sum of its entrepreneurial activities, whether selling online education or serving as incubators of market savvy innovations. The issue is: What makes a university an autonomous community of knowledge seekers, and also an independent voice of moral reasoning – particularly when it is rare to find such reasoning in public discourse? I realize that universities are not religious institutions that seek to preach morality. But, unlike the stock market, universities are not amoral institutions either. They provide a forum for free deliberation of moral issues. In fact, universities should be in the forefront of drawing public attention to issues of high social significance. Likewise, the government should not have to dictate to universities about issues such as sexual assault or tell them how to expand access to education for people of all colors, sexual orientations, and religious beliefs. To the contrary, universities should help government to see how inequalities in access hurt national productivity. To what extent universities’ expanding market entanglements are affecting its moral role is not a new question but an important one. Similarly, the extent to which the university system is beginning to take on the negative characteristics of markets needs to be assessed.
MIT is uniquely positioned to play a leadership role in halting the slow erosion of norms that guided the government-university relationship in the past. It has a strong reputation as a place of learning and creativity without the frills usually associated with wealthy private universities.
When one reads about the turmoil at Michigan State, or the outrageously high salaries of presidents of some private universities, it is amazing how MIT has avoided being singled out for any serious breach of the social norms expected of universities. MIT seems like a place still devoted mainly to serious scholarly research. Being an institute of “technology” provides MIT a strong legitimacy, not only in the U.S. but around the world, as its central mission still seems to be scientific inquiry and inventions, not just profit making.
Remember when President Charles Vest announced to the world that with OpenCourseWare (OCW) virtually all of MIT’s course content would be available online at no cost, and the overwhelmingly positive reactions to that announcement because there was no profit motive behind MIT’s noble gesture? Remember when MIT announced that women faculty in the sciences had been treated unfairly? I cannot think of a similar reaction now even as MIT engages in the ambitious capital campaign “to make the world a better place.” Most universities would argue that they too are involved in making the world a better place, but none has as yet captured the public imagination with an issue of huge moral significance. Through the recent acknowledgement of its past connection to slavery, MIT – like a few other universities – is coming to terms with this painful history. The government did not ask MIT to address this issue; autonomous social inquiry led MIT to a moral decision, and this will be respected worldwide as yet another sign of a great institution where concerns of human dignity override all other concerns. The decision to create a task force to study the impact of automation is also a good example of how universities can study markets from the perspective of a social concern and not just as a potential stakeholder in reaping the benefits of markets.
If university faculty understand the significance of government action at both federal and state levels – such as in Arizona where legislatures are paying to push conservative studies (New York Times, February 26, 2018, p. A11) – perhaps there will come a time when they will lead a march on Washington, DC, like the million-man march or the more recent women’s march, to demand autonomy of knowledge production, which is key to academic excellence. I sincerely hope that such a march will not be necessary, but the growing signs of increasing government control over university affairs worry me – a lot.