Sheila Slaughter: Professional Values and the Allure of the Market

Sheila Slaughter: Professional Values and the Allure of the Market
Academe, September-October 2001

When college presidents become CEOs, professors act as free agents, and students turn into consumers, will the traditional values of higher education survive?

So the hallmark of the current form of global capitalism, the feature that sets it apart from earlier versions, is its pervasive success: the intensification of the profit motive and its penetration into areas . . . previously governed by other considerations. Nonmonetary values used to play a larger role in people’s lives; in particular, culture and the professions were supposed to be governed by cultural and professional values and not construed as business enterprises. To understand how the current global capitalist regime differs from previous regimes, we must recognize the growing role of money as intrinsic value. It is no exaggeration to say that money rules peoples’ lives to a greater extent than ever before.

—George Soros, The Crisis of Global Capitalism

At the close of the nineteenth century, when laissez-faire liberalism and industrial capitalism reigned, professors made it clear that they did not want to be part of cutthroat capitalism, nor to ally themselves with what they saw as the radical demands of organized labor. Instead, they tried to create a space between capital and labor where values such as objectivity, expertise, and knowledge could support a common intellectual project directed toward the public good. Although they may have romanticized the purity of their intentions, and their potential for objectivity, they nonetheless made important contributions in areas such as health, schooling, safety, agriculture, economic and industrial development, and modern warfare. Moreover, professors, speaking with the authority of science, often served as arbiters among competing groups in deciding public questions.

But as George Soros, one of the world’s most successful finance capitalists, argues, times have changed. If professional values are indeed being overwhelmed by "money as intrinsic value," what are the implications for universities and their administrators, professors, and students? To the extent that the intrinsic value of money has been internalized by university constituents, they are complicit in the corporatization of higher education, and their construing it as a hostile takeover from outside academe becomes much more complicated.

University Presidents As CEOs

With money as an intrinsic value, it becomes easier for the spokesperson for the university to mirror the spokesperson for corporations, the chief executive officer, or CEO. University presidents first began to refer to themselves as CEOs in the mid-1980s, as their exchanges with corporations increased. These new relationships came in the form of partnerships such as the Business–Higher Education Forum, a group formed by the National Alliance of Business and the American Council on Education; corporate board directorships for university presidents; pursuit of entrepreneurial opportunities by universities as a means to profit from intellectual property; and greatly increased "institutional advancement," a euphemism for building up endowments through corporate and individual giving. University CEOs show their commitment to the intrinsic value of money by concentrating most of their energy on raising institutional revenues, often to applause by faculty and students.

The rise of the university president as CEO signaled a subtle organizational shift. The president is no longer primus inter pares, a faculty peer first and a leader second. Instead, presidents are heads of ever more complex, increasingly differentiated organizations, concerning themselves with expanding and protecting their staff and managing their faculty, from whom they distance themselves. Administrators, who have become more like managers and less like faculty, represent the university both to the external world and to diverse and fragmented groups of faculty within the university.

Presidents and their staff, who constitute the administration, increasingly see faculty members as workers for whose performance they are responsible. Deans act increasingly like middle managers, and are loyal to the administration rather than to faculty members. Like presidents, they return less often to the faculty after their decanal service ends, instead using their deanships as a step upward in an administrative career.

Concerns about faculty productivity have increased. Administrators have raised class sizes so that professors teach more students. They expect faculty members to produce more research, especially funded research, and engage in more service, which is increasingly interpreted as economic development. Administrators have developed formulas—40 percent teaching, 40 percent research, 20 percent service, for example—to guide faculty workloads. In addition, they now differentiate workloads, so, for example, faculty members who bring in prestigious external funds teach less while professors without external funds teach more. When faculty members complain or organize against the growing role of management, administrators claim to represent the institutional good and portray faculty as protecting special interests that undermine the well-being of the university.

Presidents and their staffs have also become entrepreneurial. They have created technology transfer offices to manage and police the intellectual property that faculty develop. They have improved their legal capacity to engage in complex, multistate, multiyear litigation to protect institutional intellectual property. They have expanded their financial management activities to better invest institutional income from intellectual property. Sometimes, they even hold stock in faculty start-up corporations, acting as state-subsidized entrepreneurs.

Administrations do not, however, limit their entrepreneurial activity to faculty discoveries. They also bolster institutional revenues by giving corporations exclusive rights to use and market university products. And they develop strategic alliances in which universities serve as test sites for new corporate products, such as software. Professors participate in the creation and modification of the products, and students, the future market for them, learn how to use them.

Increasingly, university CEOs and their administrations broker the economic future of their regions by working with state and federal agencies and corporate leaders on economic development plans. Academic CEOs, seeking to link university research priorities to economic growth, have created economic development offices with large staffs. Together, university representatives, corporations, and state and federal agencies have promoted high-technology, science-based growth in sectors that only large, multinational corporations can exploit. Administrators justify this development activity mainly in terms of job creation; however, almost no studies exist on numbers of jobs created, what sorts of skills the jobs required, who the job applicants were, or what trade-offs—sacrificing environmental concerns for suburban sprawl, for example—were made in the name of economic growth.

During the bull market of the 1990s, individual and corporate donors had money to give to universities. As university CEOs worked to increase alumni giving and other donations, endowment size became a marker of institutional status and prestige. As endowments grew, academic CEOs and their institutions became committed to the success of the global capitalism that so increased their financial capacity.

Faculty As Free Agents

Unlike the presidents who call themselves CEOs, university professors do not refer to themselves as free agents. During the past two decades, however, some professors have acquired a star status that enables them to bargain with universities for salary and perks in the same way that major-league sports players bargain for multimillion dollar contracts. Like the big-time athletes, academic stars are helped by a National Labor Relations Board that tends to favor salary negotiations by individuals rather than by collective bodies. Popular conceptions about the market value of professors’ expertise and societal endorsement of the intrinsic value of money help the relatively small number of star faculty to negotiate large salaries with their universities.

Faculty moved down the path to free agency in 1980, when the Bayh-Dole Act stimulated university exploitation of intel-lectual property by enabling universities and professors to own patents on discoveries or inventions made as a result of federally supported research. Simultaneously, corporations began to develop strategies to maintain control of global markets through broad patents and concomitant licensing and royalty agreements. The biotechnology revolution, in particular, stimulated faculty stardom. In its early years, knowledgeable faculty were in such demand that almost every full professor in the field held a position on a corporate board.

For a recent National Science Foundation study, researchers interviewed faculty in fields like biotechnology, engineering, and computer science, asking about the sequence of events that led to star status. According to the study, what usually occurred was that someone in an area with "hot" commercial potential made a discovery, often using federal funds, which resulted in a start-up company in which the professor and perhaps her university held shares. The decision was then made to "go public," which meant that the start-up was bought by a large corporation for its patented technology. As a result, the value of the shares held by the professor and her university increased exponentially.

The study cites one case in which a computer scientist started a small company based on technology he patented, built it up to about fifteen employees, and, after eighteen months of operation, sold it. The company was purchased for its technology for $220 million by Cisco Systems, and the professor received 10 percent of the sale price. The professors in the study were dazzled by the almost unimaginable wealth the corporate sector was able to confer.

Professors whose star status comes from discoveries that have commercial value are often asked why they don’t move to the corporate sector. Most reply that they find corporate hierarchy and routine boring, but enjoy the status of being "players" in the corporate world. They straddle both worlds, commingling the values of each. When university salaries are no more than "pocket change" in a world that honors the intrinsic value of money, attention is likely to shift to the opportunities offered by the corporate world.

Of course, faculty who make commercially viable discoveries are not the only stars. Professors at research universities who bring in large amounts of federal funds are also treasured by administrations, many of which depend on these "million-dollar-a-year men" for a substantial proportion of their institutions’ operating costs. Faculty members who achieve reputations through scholarship are similarly valued, particularly if they are courted by other universities. Professors who simply publish are less esteemed, because so many professors now publish, and journals proliferate. The power to generate external funds or command offers from other universities is what distinguishes stars from other professors.

The ability of professors to bring in outside money depends to some degree on the opportunities available in their fields. Professors in fields other than science and engineering who attract funds usually do so from foundations, which account for a relatively small proportion of overall research funding. Federal agencies like the Departments of Defense and Energy, the National Institutes of Health, and the National Science Foundation provide from 50 to 80 percent of the overhead costs in addition to the direct costs of research in grants to researchers’ institutions, while foundations and non-science-oriented government agencies such as the U.S. Department of Education typically provide from zero to 15 percent of the overhead. In a real sense, foundation grants are worth less to universities than most government-agency grants.

Professors who can generate external funds with high overheads, corporate partnerships, or stock holdings for themselves and their institutions can negotiate compensation "packages" that include secretarial help, reduced teaching loads, early sabbaticals, computers, technicians, graduate assistants, laboratories, and summer stipends.

After negotiating the initial package, these professors often "troll" for offers from other universities that will enable them to bid for more salary from their home institutions. In other words, these stars become free agents who take advantage of the market and see themselves as individual, economic actors rather than as part of a collegium. Whatever institutional loyalties they may have are to their research team rather than to their department or college. When universities began to raid each others’ professors, many star faculty members showed themselves willing to move away from the institutions that had nurtured their careers. Most commonly, private research universities, whose professorial salaries are now 15 to 20 percent higher than those at public research universities, lure faculty from public institutions.

Although faculty in fields close to the market may find it easier than other faculty to raise external funds, many professors in disciplines that at first glance seem distant from commercial activity have become academic capitalists. Many of them engage in academic capitalism to augment what they see as meager institutional funding. Faculty in physical education programs sell swimming lessons and exercise videotapes, archeologists lead tours of well-heeled alumni to faraway digs, education specialists sell tests and other measurement instruments, and communications departments sponsor income-generating film series. Distance education is another money maker, especially for people in the fields of business and education. Because it often acts as a profit center for a college or a department, distance education attracts professors from other fields as well. The activities of these faculty members provide examples that administrators use to encourage those in fields far from the market to follow, making adherence to professional values more difficult.

Although almost any group of faculty members can become successful academic capitalists, very often stardom and academic entrepreneurship create have and have-not colleges and departments. Medical schools and business, law, and engineering colleges attract investment, as do departments of physical, biological, computer, and information sciences. Less favored are the humanities and social sciences, fine arts, education, nursing, social work, and library science.

The departments that attract investment are generally those whose faculty teach less but bring in important research funds. The departments in which administrators underinvest are generally those whose faculty teach more undergraduates, but do not bring in external funds. The star system and academic entrepreneurship pit one group of professors against another in the struggle for resources. These skirmishes often create institutional climates of contention, bitterness, and cynicism, especially among the have-not segments of universities.

Students As Consumers

Students first became consumers when what became known as Pell Grants were initiated in the early 1970s. The grants gave student-aid money to students rather than to institutions, creating what was in effect a national voucher system. The idea behind the grants was that students would behave like rational economic actors and search for the best educational bargain, forcing institutions of higher education to compete with one another for students and making the system more efficient. As state resources shrank, income from tuition and financial aid became more important to institutions, leading them to compete even more vigorously for students. Then, in the 1980s and 1990s, as tuition rose dramatically and the focus of student aid shifted from grants to loans, late adolescents and their parents began to see education as a product or investment, definitively shifting the identity of students from scholars to consumers.

When universities think of students as consumers, they "package" themselves to entice students. The registrar becomes the head of enrollment management, concerned with bringing in the first-year class, and registration staff increases as that function becomes more important. Institutions spend large sums on recruitment, sending glossy viewbooks selling the "college experience" to students who have the right zip codes, that is, those corresponding with neighborhoods where parents are likely to have enough money for college. Administrators spend money rewiring dormitories so that students can connect to the Internet, and they make rooms and closets larger to accommodate all the possessions prosperous students bring to college. Attractive "recreation centers" with the latest in sports facilities are part of the tours that prospective students get.

If students are consumers, they are also a captive market. Administrators are doing away with subsidized dorm food services and treating student unions like profit centers, leasing space to nutritionally questionable food chains. Many universities have turned their bookstores over to Barnes and Noble. And some issue students institutional credit cards with cute names, enabling students to purchase everything sold by the institution, even when cheaper options exist not far off campus. In short, students are no longer seen as scholars who should be subsidized with institutional funds, but as profit centers.

As consumers, students no longer see themselves as apprentices who come to the university to sit at the feet of distinguished scholars and enjoy learning for its own sake. Instead, they feel compelled to maximize their investment in education, and they migrate to high-end professional colleges or preprofessional (law and medicine) programs. The liberal arts has lost students, and it depends more and more for enrollments on required general education courses and electives, often taught by less expensive adjunct faculty.

Money is also transforming graduate education, drawing students into fields promising immediate financial rewards. Because of competition for entry into programs in medicine, law, and business, and the high rates of return that accrue to degrees from them, institutions have started to charge higher tuition in these programs than in others. Enticing graduate students into the physical and biological sciences remains difficult, because these fields still demand arduous apprenticeships. Foreign nationals fill more than half the places in these fields, even though many graduate students in the sciences and engineering receive higher stipends than students in nonscience fields, and often get funds from contracts with corporate sponsors that make their income equal to that of assistant professors in "have-not" fields. Ironically, prospective graduate students, enamored of their subjects, continue to apply to humanities and social science departments, but universities are cutting back on the number of slots in such departments because of a lack of jobs for their Ph.D.’s. Perhaps not unrelatedly, the use of low-paid, non-tenure-track instructors is increasing in these fields.

In recent years, corporate funding for university research, which has consequences for graduate students, has increased rapidly. Often, corporations require professors to sign agree-ments that allow the corporations to review any articles or presentations that come out of a sponsored project. The corporations reserve the right to prevent communication of research if they believe publication or discussion will be prejudicial to their intellectual property rights. Although corporate sponsors rarely exercise these rights, some graduate students have been prevented from completing dissertations in a timely fashion.

By law, scientific discoveries that are published cannot be patented afterward. Graduate students perform the bench science in most discoveries and are often named on patents. A federal appeals court ruled that placing a dissertation on a library shelf constitutes publication; ergo, dissertations are sometimes delayed. Secret research, once associated with the military and banned from many campuses, has unobtrusively re-entered many universities by way of corporate sponsorship of research.

Moreover, as professors work with corporate sponsors, they begin to redefine the nature of graduate student research. Students with corporate stipends frequently have to meet tight corporate deadlines. Although professors say they try to accept corporate funds only for "interesting" and "publishable" projects, such research often has commercial applications. Rather than exploring the endless frontiers of knowledge, graduate students and their professors search for products suitable for the global market.

Professional Values and the Market

The relationship between professional and market values has become confusing. On the one hand, corporations are raiding the intellectual commons created by universities. They try to patent and copyright all manner of intellectual projects, ranging from AIDS drugs to course notes, which they then market for profit, even though much of the intellectual work they lay claim to was initially supported by federal and state funds. On the other hand, administrators and professors often act in entrepreneurial ways; administrators aim to increase institutional revenues, while faculty members set out to augment departmental revenues and personal profits.

In other words, corporations seek profits from universities, administrators seek institutional revenues through corporations, and some professors rely on university resources to make money from corporations. (Graduate students are often left out of these revenue-generating activities, because universities define them as employees and, by extension, their work as work for hire. Ironically, universities often fight against classifying graduate students as employees when collective bargaining is at issue.) Corporatization is thus a two-edged sword, even though corporations may be Goliath to the administrators’ and professors’ David.

At one time, the boundaries between the professional world, at the heart of which was the university, and the business world, whose raison d’etre was profit, were fairly clear. Scientists and professionals were supposed to seek objective knowledge, foster the free flow of such knowledge, enhance learning and discovery, and use their expertise in the service of the common good. In return, they received public trust and subsidy.

That bargain began to break down in the second half of the twentieth century, as intellectual property, found readily and cheaply in universities, became central to the market strategies of multinational corporations. Professionals outside the universities—physicians, lawyers, computer scientists—contributed to the breakdown of the social contract by forgoing altruism and miming corporate practices that focused on the bottom line. Within universities, administrators entered into multiple and complicated relationships with corporations, as did some faculty members. The lines between professional and corporate values, public and private support, the commons and the market became more and more difficult to discern.

In the postmodern twenty-first century, the professional values that once marked the boundary between the corporate world and universities seem quaint, impossibly naive. Yet if professors and administrators want to continue to receive public trust and financial support, they must differentiate themselves from the corporate world and figure out a new social contract. Such a contract would not capitulate to the market, nor would it simply defend the older system. Faculty members who want to preserve professional space outside the market will have to dedicate themselves to working out such a contract and enlist the support of administrators, students, and citizens. Such a project will have to be a collective endeavor, perhaps involving groups of professors qua professors, such as the AAUP, the American Federation of Teachers, and the National Education Association, as well as the learned and professional societies. At some point, administrative associations, such as the Association of American Universities, the Association of American Colleges and Universities, and the American Council on Education, will have to be included. The task will not be easy, but it is of paramount importance.

Sheila Slaughter is professor of higher education at the University of Arizona.