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September 14, 2008
David Warsh, Proprietor


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Bears Watching

Here’s a slick idea:  describe, briefly but authoritatively, the main modes by which knowledge has been produced, distributed and conserved over the last twenty five centuries, mainly in the West, but in Chinese, Islamic and Indian civilizations as well, until all four traditions converge in the twentieth century to produce a truly global civilization. Ian F. McNeely and Lisa Wolverton have done just that in Reinventing Knowledge: From Alexandria to the Internet.

In an age when ingenious instrumentation and massive parallel processing by computers promises to usher in another epochal transformation in our understanding of who we are, where we live and the possibilities of the one and the other, it makes great good sense to ponder how we got from there to here – from the moment when knowledge “first expanded beyond the compass of one person’s mind,” in constant danger of being lost with death, and became instead a social product.  And so they do, in six graceful chapters:  on the library; the monastery; the university; the republic of letters; the disciplines; and the laboratory.

Sample fact:  scholarly disciplines dominate today’s universities, carving knowledge into myriad departments, but the very first of them came into being only when Friedrich August Wolf (1759-1824) insisted in enrolling in the university in Göttingen in neither arts or theology but as a “student of philology” – in 1776, the same year that Adam Smith predicted that market forces soon would drive intellectual specialization. Great stuff!

There is not much room in Reinventing Knowledge for speculation about whether today’s “knowledge society” is a distinctive break with the past, or just more of the same. The authors are historians, after all. (They conceived of their project as junior members of Harvard University’s elite Society of Fellows; today they are married, with daughters, and teach at the University of Oregon.) For that, you need another book, with a much narrower focus on what is probably the most important economic institution of the present day: not the city (to continue to think in a historical vein), nor the trade fair, the bank, the law of property or the joint stock company, but instead the university.

Happily, Mission and Money: Understanding the University, by Burton Weisbrod, Jeffrey Ballou and Evelyn Asch, also has just appeared.  To describe its compass, I am afraid I can’t do any better that quote a blurb that I contributed (along with several others) to its dust jacket.  I don’t ordinarily write blurbs, and when I do, I certainly don’t turn around to use this column to tout the book, but in Weisbrod’s case I make an exception. For forty years, the Northwestern University professor has been the economics profession’s foremost student of that highly interesting and significant hybrid, the non-profit corporation.

When the Attorney General of the United States some years ago filed an antitrust action against a dozen top universities for comparing among themselves how much aid to offer scholarship students, he underscored how far we’d come from the idyllic years in which higher education stood apart from the rest of the American economy. Today everyone recognizes that private and public universities, liberal arts colleges, community colleges, and for-profit schools form a highly-competitive industry, perhaps the nation’s most important engine of economic growth. But no one understands better than Burton Weisbrod and his co-authors the complex commercial forces that are transforming the business and its managers.  The action in their book stretches from the admissions office, the football stadium and the biotech labs to corporate boardrooms, Madison Avenue and the halls of Congress.

 The book appears at a propitious time. Just last week, Sen. Charles Grassley (R-Iowa) and Peter Welch (D-Vermont) convened a daylong session in Washington with a couple dozen college presidents in order to pressure them to spend their endowments more freely, especially on financial aid to students.  Grassley often has indicated he would like to require the richest universities to spend five percent of their endowments annually, as foundations have been required to do since 1969, and last week’s discussions are thought to be preliminary to formal hearings.  Last week, he sounded a slightly softer note, according to reporter Tamar Lewin, writing in The New York Times:  “We’d like to encourage you folks to look inward and correct what can be corrected,” he told the assembled presidents.

Meanwhile, Weisbrod assembled a roundtable of his own last week, in Chicago, under the auspices of the Searle Center for Law, Regulation, and Economic Growth of Northwestern University’s Scool of Law, in connection with the publication of his book.  The Washington discussions were likely to be seen as “the first sorties in what will soon be a full-scale war on college endowments,” he said, proceeding on two fronts, federal and state.

It was true, he said, that the richest and most powerful universities had undergone a considerable metamorphosis is recent years, building up war-chests, adding laboratories and facilities, inventorying their research programs in search of marketable patents, adding campuses abroad, burnishing their athletic  programs.  It was true, too, that tuition had climbed rapidly, especially at the most widely admired and fashionable institutions, and that elite public and private universities were becoming more alike.

But the key to understanding university economics lies in recognizing that colleges and universities pursue lofty social goals and crass money-making activities at the same time, supporting their mission-related activities (for which there can be no simple “bottom line”) by engaging in conventional business-like activities – everything from charging tuition and renting rooms to students to licensing the school name to sweatshirt manufacturers and squeezing rich alumni for big donations in recognition of their hopes of small (and not so small) favors.  “Understanding universities is complex,” said Weisbrod.  “But there is no way around it.”

Education policy then, in the words of the famous newspaper cliché, “bears watching.”  EP returns to its normal routine next week.


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