New at Reason

Julian Sanchez | March 1, 2005

The Greek philosopher Diogenes was said to have shunned material wealth so totally that he lived, naked, in a barrel. As Neal McCluskey explains, academe's come a long way since then. Sort of.

Comments

|3.1.05 @ 10:27AM|#

As a faculty member and administrator in a state university system (Florida--pause for laughter to subside), I have several comments about Neal McCluskey's article.

1) My own university gets $4-5 million in "direct appropriations" per year. As a libertarian, I am uncomfortable with this. I console myself somewhat with the confidence that the Federal govt would *not* be refunding it to the taxpayers otherwise.

2) I would be happy to compete for students in a free market, as private universities do. Here in Florida, the legislature not only determines the level of state support universities get, but also sets tuition rates. Political pressure to keep both low is overwhelming. Universities, like any other organization, will in such circumstances look elsewhere for revenue.

3) I don't know who is getting "large salary increases", but it ain't happening here. This is my 11th year in the Florida system: annual raises have never been more than 3%. Last year, faculty and staff got a $1000 "bonus" in lieu of a raise, and the governor's recommended budget for this year includes no money for raises for university employees.

4) I have not read Vedder's book, but from my own experience the claims are off-base. It is true that, for a grant proposal to NIH to be competitive, researchers often need to show some preliminary results to indicate the promise of the work proposed. Then part of that grant is used to obtain preliminary results for the next one, etc. But to say that the research is "almost complete" before the proposal is submitted is a gross exaggeration, in my experience.

5) Also, Vedder's claim that "Researchers use the money for costs they would have been willing to assume themselves given the prestige their research would bring them" is just silly. Is he saying that researchers would spend $50K per year on their own equipment? A lot of faculty whose jobs consist of mostly research are *required* to raise most of their salaries through grants--they would not have jobs otherwise. Is Vedder saying they would work for free AND buy their own equipment? It strains credulity.

There is much to criticize in the current system from a libertarian perspective. However, this is the system we have, and until public universities are given the same control over their revenue streams that privates have, expect to see a lot more lobbying for federal appropriations and grant programs. Right now, it's one of the few ways public universities have to generate new revenue.

|3.1.05 @ 11:00AM|#

Nice summary, Chuck. I was popping in to make a comment similar to your fifth point.

|3.1.05 @ 11:16AM|#

I have to agree with chuck, I'm an academic researcher in the neurosciences and the majority of the work I have done has been funded by NIH grants, and most of the work covered by those grants is 0-10% complete when I or my mentor applied for them . Further, given that my salary of about $40,000 (I'm still a post-doc, but my salary is unlikely to do much more than double in the course of my career) is covered by grant money, how am I to cover the cost of my research? Keeping in mind that the average cost to produce one publication in my field is about $50,000.
That said, I can't help but find it irritating when the university takes ~65% "indirect costs" on a grant (this is money the university gets on top of my own in return for my work, ostensibly to cover the cost of facilities etc.) Though much of this over head is created by the need to comply with ever increasing levels of federal regulation I have to wonder if I couldn't do it cheaper on my own. But then the grants process places substantial weight on belonging to a genuine university, there are good reasons for this but the result, combined with the weight of regulation, is that 65%.
The truth of the matter is that most science, like most art (perhaps science moreso now given the increasing incremental cost of innovation) requires patronage. While the average person can and does buy art (CD's, DVD's, books, etc.) at a level which can support a large number of popular artists, the average person, even most wealthy people, don't buy sceintific articles. If we wish to maintain the present level of innovation the government must pay where private citizens do not.
The choice is much more like the case of the military, in fact, where nations are obliged to pay for one or take direction from nations that have a larger one. Much like the military, science is prone to pork and needs a shake up every now and again, hopefully the present budget squeeze will help, but don't defund grants, cut the regulatory burden and put it to universities to justify indirect costs, I for one would be curious what their answer would be.

|3.1.05 @ 12:44PM|#

65%? Wow... lots of people are leaving my university because it's about 40%. A guy on my advisory committee negotiated it down to 25%, but he got an offer for something like 10% at a better school.

|3.1.05 @ 1:09PM|#

Overhead rates vary, depending on the granting agency. Some federal agencies negotiate overhead rates for major projects directly with the institution. (I believe the overhead rate we have with NSF is 54% of personnel costs.) So, I would be careful about making comparisons on overhead rates without a lot of additional information.

That having been said, it is common knowledge that overhead does more than just cover the indirect costs of a project, which is what makes it useful as a revenue source for institutions. Hence the increased emphasis on research. It's not just about prestige.

|3.1.05 @ 1:22PM|#

Not being the one who writes the grant applications, I can't comment on that.

However, I teach in the evenings at a private, for-profit college. (I teach optics to photographers.) Our students get federal financial aid. Federal financial aid comes with strings. Right now we're caught in a vise between:

-the accreditation agencies (usually private, but they make you jump through hoops just to demonstrate their power)

-federal financial aid (whose requirements differ somewhat from those of accreditation)

-Sarbanes-Oxley (which is indeed a burden, but the administrators also use it any time they don't want to explain something, "Hey, why hasn't anybody fixed the copy machine?!?!" "Um, Sarbanes-Oxley?")

-shareholder lawsuits (the parent company has been naughty)

-the local government (doing everything in their power to slow expansion into a new building

-parents' lawyers (just try giving somebody an F. I dare you!)

Not fun.

|3.1.05 @ 11:42PM|#

I'm glad I'm not the only one who thinks this article is off-base.

I mentioned this the other day: The half trillion for a medicare drug benefit would be better spent on biomedical research, where the returns on investment are historically much higher.

|3.2.05 @ 9:49AM|#

I would be perfectly happy for government to get out of the picture completely. My problem is that not only is government slowly squeezing dry their funding, but also by controlling tuition is preventing universities from making up the lost revenue. We're getting screwed from both ends. And I'm sore (pun intended).