Now I could tell you all sorts of other things about how my home university, a very rich private American university, is different from the French public universities I’ve encountered. But I’ve looked up some figures and, frankly, the sheer quantitative difference between Paris-8 and UChicago is so enormous that it almost speaks for itself. Behold:

As you can see, there are actually 6,338 more students enrolled at Paris-8 than at the University of Chicago. However, the balance tips the other way for every other indicator. In Chicago there are twice as many faculty (for fewer students), twenty times as many staff, and seventeen times more campus buildings — which is probably an underestimate, since UChicago also owns a lot of residential and commercial real estate in its neighborhood over and above the campus buildings. UChicago’s annual budget of $2.8 billion is also about seventeen times larger than that of Saint-Denis, and of course, UChicago controls an endowment of 4+ billion dollars while Paris-8 has an endowment of, as far as I know, zero. (French universities don’t have endowments; and much of their funding is dispersed directly by the ministry, though that’s changing as a result of contested “autonomy” protocols being put in place. The Chicago endowment on the other hand used to be $6.6 billion, though they claim it shrunk as much as 30% during last year’s economic crisis.) At any rate, I think the overall picture here is clear: the disparity in organizational wealth is enormous. The disparity in teacher-student ratios is obvious. The disparity in staff, money and buildings is even more obvious. This isn’t, in short, just a story about simple difference; it is a story about profound educational inequality within and between nations. If we imagine a similar 17x disparity between two American workers, it would be similar to the difference between someone who makes $15,000 working minimum wage in a fast food restaurant and someone who gets a quarter million dollars a year as an executive.

The whole long international history of how these different universities came to be so economically different is something I can’t get into here. And there are, for that matter, some interesting commonalities between the universities that aren’t obvious from the official statistics. For instance, I happen to know that the official count of the staff population is probably too low in both cases, since both universities employ significant groups of outside contractors to do various sorts of campus service work. While Paris-8 has private security guards, UChicago has, for instance, outsourced its janitorial staff; and these people should probably be counted as staff, because they are regular campus workers even if their paychecks are routed through some private entity. The faculty counts are probably unreliable as well, since both campuses hire teachers who are graduate students and, in Chicago’s case, temporary adjunct faculty who probably aren’t being counted in the official size of the faculty population. (This is, of course, just a guess; I don’t know for sure how they compile these figures. But it’s well-known that, in the U.S. case, there are various reasons why administrators don’t like to count grad student teachers in the ranks of their teaching staff.) At any rate, it’s anyone’s guess whether the systematic skewing of these figures would cancel out across these two universities in the context of the comparison here.

In a lot of ways it’s an unsatisfying comparison. Similarly vast wealth disparities could be found by comparing UChicago to an American community college. Still, even leaving aside all the cultural and intellectual and sociological and historical and political differences that separate UChicago and Paris-8, leaving aside everything that you would have to consider to make a comparison satisfying to an anthropologist, even just looking at the most crude and basic figures, it’s worth thinking about the extent to which campus life is bluntly determined by available wealth. Indeed, maybe it’s good to start out by thinking about the gross inequities in material resources across universities. Maybe only once you’ve taken account of that can you really understand how some kinds of academic life depend on large fluxes of cash or, conversely, manage to flourish in spite of them.

The common sense definition of “non-profit” is an organization whose income just barely covers its expenses. The designation of universities as non-profit institutions encourages one to think of them as organizations that are modest by nature. Even a school like Yale, which is obviously well endowed, is often imagined to be operating close to the margin, devoting whatever income it generates to the provision of high-quality education and leaving just a small cushion between the university’s costs and its revenues. The truth is that Yale pursues an active policy of accumulating surplus wealth, and that by 1996, its annual earnings exceeded its operating costs by nearly $1 billion.

At the end of the 1995-96 school year, Yale’s assets totaled $6.3 billion, including an endowment of just under $5 billion. Its endowment made Yale the second richest school in the country, surpassed only by Harvard. Moreover, the university enjoyed a phenomenal run of success in the 1990s. In 1995–96, while employees were on strike, the endowment earned a return of 25.7%, or just over $1 billion. Nor were the mid-1990s freakishly good years. Rather, they continued a long-term trend of exceptional performance by the university’s investments. With some ups and downs, the endowment grew steadily and impressively for 25 years. In the five years leading up to the 1996 strike, Yale’s endowment earned an average return of 16.7%, the highest in the Ivy League.

One way to make sense of the university’s financial standing is to consider where Yale would fit in the corporate economy were it not classified as non-profit. The surprising truth is that, by almost any measure, Yale’s wealth places it among the largest corporations in the country. Depending on which measure is used, Yale would rank between 250 and 300 in the Fortune 500 listing. Ranked by total assets, the most conservative measure in 1995 placed Yale squarely among the corporate giants, ahead of such well-established firms as Turner Broadcasting, General Dynamics and Nike.

Since the university strictly limits how much of the endowment’s earnings are devoted to educational expenses, it generates large annual surpluses. In 1995–96, for example, the endowment earned a total return of just over $1 billion; but only $171 million of this went into the school’s operating budget. An additional $159 million should be considered the level of reinvestment necessary to maintain the real value of the endowment against inflation. This means that Yale netted nearly $700 million, after all expenses and after accounting for inflation. In common sense terms, then, Yale made a profit of nearly $2 million per day. Far from operating at the margin, the university had reached the point where it could easily afford to charge zero tuition to its students, improve the wages and benefits of its employees, and pay full taxes on its local property, and still see the endowment grow well ahead of the rate of inflation. (pp. 97-98)

It seems to me that there are several rather memorable things here, so if you don’t mind, I will repeat some of Lafer’s findings for emphasis.

1. It appears that the richest universities have accumulated wealth far beyond what their administrators need or desire to spend on research or education. (Though admittedly, this year isn’t looking so great for university economies, and it must be said that these huge accumulations of surplus wealth have probably helped save rich private universities from making cuts on the scale of, say, those at the University of California.)
2. These universities are economically at the scale of the world’s largest corporations (ahead of Nike!). I don’t know about you, but I just find that striking.
3. Finally, it seems to me that our concepts of the university need to be reformulated to take this massive concentration of wealth into account — and also to account for the organizational poverty and resource deprivation that characterizes so many less prestigious, often public universities. A really materialist theory of universities, whatever that might mean, would have to think more carefully about the relationship between universities and capital – though, as Zach and I agreed in my last post’s comments, this would involve avoiding simplistic views in which universities just “are” (or “have become”) corporations. Lafer doesn’t stress this point, but it’s obvious that a wealthy private university like Yale, for all its wealth, is not accumulating wealth in the same way as a private corporation. For-profit corporations are seldom the recipients of multi-million-dollar philanthropic donations. For-profit corporations typically sell commodities, while a university degree is arguably not exactly (or not only) a commodity – not that this has prevented the growth of private for-profit universities, of course. At the same time, the university is far older than the modern shareholder-owned corporation, a fact which is (I suspect) not entirely without conceptual significance. On this point, it’s noteworthy that the branches of these private universities that are responsible for the endowments are remarkably separate from the academic parts of the organization; there are separate, seemingly rather independent endowment managers who, e.g. at Harvard, made as much as $35 million in a year. In fact, there is historical resistance to having input from the rest of the university on the management of the endowment; at the University of Chicago, for instance, a 40-year-old policy explicitly underwrites a near-total separation between academic debate and management of university property. This says a lot about the university as loosely coupled systems (a concept which also signals some major problems for any overly-monolithic theory of universities).

But I guess rather than speculate further about the relationship between universities and the business world, it would be better to read some of Christopher Newfield’s work, which I haven’t done yet. Coming up soon here: some results of a little reading group I’m putting together on the comparative, international workings of neoliberalism in national university systems.

At the University of Chicago, 450 employees were laid off as the hospital cut its $1.5 billion budget by 7%, while the Campus Life division cut its $60-million budget by 6%. The endowment is thought to have fallen 25% from $6.39 billion, having had 80% of its value in equities like stocks, but it apparently takes time to find out the changing value of certain investments so this isn’t certain. (Endowments have fallen elsewhere, too.) There are rumors of further layoffs and of declining graduate admissions.

The job market has shrunk in various fields, such as history (15%), English and foreign languages (20% and 22%), and philosophy, at least anecdotally. It is unclear whether graduate admissions are shrinking more broadly; as Brian Leiter points out for philosophy, programs may shrink because of diminishing funding or they may grow because grad students provide cheap labor. While many universities have a hiring freeze, a few “second-tier” universities in, for instance, Boston and Illinois, are having especially active job searches, hoping to hire especially desirable (and desperate) candidates. Matthew Filipic, CFO of Wright State, argues interestingly that hiring freezes are counterproductive.

State universities are in major trouble, with very substantial cuts from legislative appropriations. The University of California system, with a half billion dollar budget gap, is “suffering” from major cuts and may decrease enrollment. SUNY suffered $215 million in cuts last year and is facing $40 million in additional cuts this year, which faculty and administrators are protesting. Arizona has cut its higher education budget $141.5 million, with about 600 positions to be eliminated at the University of Arizona, and 48 academic programs to be eliminated at Arizona State. Apparently a thousand students have turned out in protest (and here the proposed cuts are said to be $243 million).

Research funds for science are said to have declined for the last few years, including the NSF and NIH. The most reliable source of information seems to be at the NSF’s Science Research Statistics and budget documents; NSF funding has been flat or slowly falling lately. There appears to be some hope that Obama’s stimulus bill will provide new funding, but I don’t know how that turned out after the “trimmings” from the bill.

A particular controversy revolves around college and university executive pay. A number of presidents and chancellors have taken pay cuts, donated money to their institutions, and turned down bonuses, for instance at Washington University in St. Louis, Rutgers, U of Conn., UPenn, Oregon State, and Stanford. Average presidential pay seems to remain very high, though, above $400,000.

Finally, in addition to the obvious questions of money and jobs, there are some more idiosyncratic responses to the crisis. Some places have seen revision of organizational structures: the University of Minnesota has decided to dissolve and decentralize its graduate school, while Governor Jodi Rell of Connecticut has proposed an administrative merger of the community colleges and the technical high schools. Brandeis University has notoriously threatened to sell off its $300 million art collection. Economists quarrel over whether the crisis should affect their pedagogy. Sustainability programs may be under threat.

The future doesn’t look bright. I’ve heard some people say they think that administrators are using the crisis as an excuse to make cuts they wanted to make anyway (they have long wanted to reduce the phd admissions size in my department, for example). The allocation of money is probably the aspect of university management over which faculty and student have the least power and influence, so I don’t see a great deal of hope for activism on this front. Dean Dad offers a hint of the ugly pragmatism required of administrators in financially strapped colleges. A provocative question, though, is whether the really rich schools in fact must cut their budgets to survive, or rather have simply decided to cling to their finances at the expense of the jobs and working conditions of their workers.