TPPF COMMENTARY: Public Universities Belong to the Public, Not the Faculty

By Jeff Sandefer

In the May 1 Austin American-Statesman, University of Texas professor Thomas Palaima asks us to “thank” tenured professors for improving “what they (have) rightly come to view as ‘their’ colleges and universities.” According to Professor Palaima, tenured professors believe that our colleges and universities belong to them.

When workers and managers believe an organization exists to serve them, and not its customers or its rightful owners, it begins a terminal decline. General Motors serves as a grim reminder of the end result.

As a successful entrepreneur and a longtime university teacher, my years inside academia have taken me to places where parents, donors, and taxpayers aren’t welcome. I have seen firsthand what happens when tenured faculties act as if the universities belong to them.

For starters, interest in teaching declines. According to the federal government’s National Center for Education Statistics:

• The average tenured professor now teaches fewer than three classes per year, and often no more than a handful of students at a time, despite the fact that tenured and tenure-track faculty account for the bulk of college costs.
• For so little work, the average full professor receives more than $150,000 annually in salary and benefits.
• As a result, the cost of instruction for some tenured faculty members exceeds $20,000 per student.

So who teaches our children, if not the tenured faculty? An underclass of teaching assistants, adjuncts, and other non-tenured faculty – many of whom are paid $10 per hour or less. According to the New York Times, 70 percent of the faculties at American universities are made up of non-tenured, non-tenure track faculty.

Don’t misunderstand. Inside our universities are some wonderful teachers, tenured and non-tenured still dedicated to serving students. These teachers are my friends and heroes – but there are far too few of them, and they pay a heavy price because of perverse institutional incentives.

How does the tenured faculty spend its time? Writing academic journal articles that few people read. Since the tenured faculty answers only to itself, prestige and promotion rests on publishing in these journals; graduate students who desire tenure slave away to serve the tenured priesthood, often “co-authoring” articles for those already in power.

But doesn’t academic research drive the economy? The Texas Legislature seems to think so. It continues to support higher education’s thirst for unlimited research funding and more “Tier One” universities, never stopping to inquire whether the esoteric research designed to serve the faculty’s interest is worth what it costs.

• Academic research, properly accounted for, consumes two-thirds of every dollar we spend in American universities.
• Over the last decade, Texas taxpayers have spent more than $20 billion on scientific academic research – reportedly the most economically productive academic research – to generate less than $14 million a year in net patent income. That’s less than a 1 percent rate of return.
• That same money invested in college scholarships would have allowed us to double the number of Texas students who attend college.

Work done by University of Ohio professor Richard Vedder goes one step further: the waste in our universities is so great that more spending on higher education in a state leads to lower economic growth. California is an example of what happens when runaway higher education spending leads to higher taxes that cripple a state economy.

Palaima is right that tenured faculties do believe that our colleges and universities belong to them. And they might go on strike if pushed too hard. But then the joke might be on them: college costs would plummet, most students would continue to be well served by non-tenured faculty, and the state economy would prosper.

It’s time for the Texas Legislature to stop writing “blank checks” to our state colleges and universities for tenured professors to spend as they please. Instead, all state higher education funding should be directed to scholarships, so universities once again will have to answer to the people who pay the bills. That’s the only way students, parents, and taxpayers will ever regain control of our universities.

Jeff Sandefer is a member of the Texas Public Policy Foundation board of directors and a longtime teacher at the graduate level, first at the University of Texas and now at the Acton School of Business. His numerous teaching awards include being named by BusinessWeek as one of the top entrepreneurship professors in America.

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TPPF COMMENTARY: A Bailout That Sacrifices Freedom for Dependency

Throughout our nation’s history, the size and scope of government has grown by leaps and bounds during times of crisis, financial or otherwise. The political class’ natural instinct is for government to rush to the rescue, particularly when an election is near. The current financial meltdown appears to be no exception, as our government responds with a $700 billion taxpayer-funded bailout that is at best a Band-Aid and at worst a more deadly strain of the same disease.

Rather than punishing taxpayers, an array of smarter options is at the government’s disposal: abandon cheap-money policy; remove financial incentives that make home purchasing so easy for those who don’t yet have the means to own a home; let solvent firms naturally emerge from the mess while firms without sound business models go under; just to name a few.

Many people have played into the hands of big-government apologists by arguing that free markets are "better" because "they work," rather than defending freedom as a fundamental, God-given right for everyone.

I was fortunate to be with Margaret Thatcher once in England when she reminded a group of Americans fretting about a temporary dip in the stock market: "The most important word in the phrase 'free markets' is not the word 'markets.' You cannot justify your freedom based on today's Dow Jones Industrial Average." Her words ring true, as Bush appointees scramble to stoke the engine of our economy by tossing in ever-larger quantities of our tax dollars and freedom.

Charging the Federal Reserve, investment bankers, and politicians to "solve" this crisis is like deputizing arsonists to fight a wildfire. The central enabler is the government, with Wall Street hucksters as eager accomplices. It’s time to let the market sweep away decades of excessive leverage and loose monetary policy.

Worrying about a repeat of the Great Depression is a valid concern. But check out hyperinflation in Germany in the 1930’s or Zimbabwe in 2008 before you decide that flooding the world in dollars is a better idea. Free from intrusive governmental tinkering, markets will clear soon enough, even if it means many speculators are wiped out.

Pouring in more government dollars into bailouts may rescue a few Wall Street bondholders, but it will only harm the average American. In the end, vesting large amounts of economic power in a few government officials simply is a bad idea. It won’t work any better here than it did in the former Soviet Union. The world economy is too complex to be managed in a top down fashion, even by a Wall Street dealmaker and a Princeton economist.

Benjamin Franklin once warned: “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.” The seeds of this problem were sown long ago, and the financial bill will be paid one way or another. The only question is how much freedom Americans will lose in the process.

Jeff Sandefer is the founder of the Acton School of Business and serves on the board of directors of the Texas Public Policy Foundation.

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Texas PolicyCast: Bailing out on freedom

This week, Congress is considering a financial system bailout that would give the U.S. Treasury Secretary the authority to buy up to $700 billion of bad debt off of Wall Street balance sheets. But will this plan shore up our wobbly economy and calm our turbulent credit markets, or will it kill the value of the dollar and set off a vicious inflation spiral? And even more importantly, what effect will this plan have on our freedom? To probe these questions, we bring you a conversation with Jeff Sandefer, president of Sandefer Capital Partners, teacher at the Acton School Business, and a member of the Texas Public Policy Foundation board of directors.

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