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Start here…

… in trying to get a grip on the London School of Economics/ Benjamin Barber/ Other Academic Friends of Libya controversy, scandal, whatever you want to call it. Start with a university story that has nothing to do with Libya.

Frank Rich recently wrote, in the New York Times:

[Lawrence] Summers [did] consulting work for [a] hedge fund, Taconic Capital Advisors, from 2004 to 2006, while still president of Harvard.

That the highly paid leader of arguably America’s most esteemed educational institution … would simultaneously freelance as a hedge-fund guy might stand as a symbol for the values of our time. [Summers was] moonlighting in the money racket while running the entire university.

And he was making millions and millions of dollars. At a one day a week job.

He was paid, what, $800,000 or so to be Harvard’s president.

Put aside whether, as Ben Stein suggests, such a beneficiary of Wall Street money could ever, in his government capacity, “crack the whip” against it (“Wall Street knows how to get its hooks into government. This is how the world works. Money talks.”) and ask rather, from the point of view of the university, whether his raking it in while president is seemly.

It’s not unseemly if you regard a university as an institution like any other in a capitalist economy, primarily geared toward generating profits (in its athletic program, in its entrepreneurial scientific work) and generating personal wealth (for consultants to money funds, like Summers, for consultants to wealthy dictatorships and other countries, like Barber, and for university presidents like Shirley Ann Jackson, who sit on corporate boards and earn millions to attend board meetings).

As Barber says, in his defense, “Everyone gets paid.” It’s exactly the same way university presidents defend giving four million dollars a year to football coaches: There’s a market for everything, and everyone gets paid the going rates.

Absolutely none of this is unseemly (I’m not talking, by the way, about the astounding salaries made by presidents of for-profit colleges. These guys are for profit, baby, and you better believe it.) if a university is a corporation with classrooms, run and staffed by people seriously distracted by big money elsewhere. But a lot of people have a nagging feeling that universities are something more. Indeed these people note that our government seems to feel they are something more, since they receive remarkable tax benefits. Some of them are even public institutions (Barber taught at two of these, Rutgers and the University of Maryland), direct recipients of taxpayer dollars. What happens to Americans’ support for non-profit universities when so much that goes on at those places is outrageously profit and personal wealth driven?

The Libya dust-up is only the latest lesson in a gradual education taking place among the American public as to what really goes on in higher ed.

Margaret Soltan, March 7, 2011 10:27AM
Posted in: the university

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One Response to “Start here…”

  1. University Diaries » “Columbia professors do not have to disclose outside compensation, including consulting arrangements, if it does not fund their University-sponsored research.” Says:

    […] model, their king, their god, their guru, their gold standard, is the last president of Harvard. As Frank Rich notes: [Lawrence] Summers [did] consulting work for [a] hedge fund, Taconic Capital Advisors, from 2004 to […]

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