“The Impossibility of a University”

I was just reading David Friedman’s The Machinery of Freedom. He published the first edition in 1973. Amidst the wild ride of the contemporary American university (Evergreen State College being the most heinous single episode), one passage seems especially prescient.

From chapter twelve in the third edition:

The modern corporate university, public or private, contains an implicit contradiction: it cannot take positions, but it must take positions [sides]. The second makes the demand for a responsible university appealing, intellectually as well as emotionally. The first makes not merely the acceptance of that demand but its very consideration something fundamentally subversive of the university’s proper ends.

It cannot take positions because if it does, the efforts of its members will be diverted from the search for truth to the attempt to control the decision-making process. If it takes a public position on an important matter of controversy, those on each side of the controversy will be tempted to try to keep out new faculty members who hold the other position, in order to be sure that the university makes what they consider the right decision. To hire an incompetent supporter of the other side would be undesirable; to hire a competent one, who might persuade enough faculty members to reverse the university’s stand, catastrophic. Departments in a university that reaches corporate decisions in important matters will tend to become groups of true believers, closed to all who do not share the proper orthodoxy. They so forfeit one of the principal tools in the pursuit of truth — intellectual conflict.

A university must take positions. It is a large corporation with expenditures of tens of millions of dollars and an endowment of hundreds of millions. It must act, and to act it must decide what is true. What causes high crime rates? Should it protect its members by hiring university police or by spending money on neighborhood relations or community organizing? What effect will certain fiscal policies have on the stock market, and thus the university’s endowment? Should the university argue for them? These are issues of professional controversy within the academic community.

A university may proclaim its neutrality, but neutrality as the left quite properly argues, is also a position. If one believes that the election of Ronald Reagan or Teddy Kennedy would be a national tragedy, a tragedy in particular for the university, how can one justify letting the university, with its vast resources of wealth and influence, remain neutral?

The best possible solution within the present university structure has been not neutrality but the ignorance or impotence of the university community. As long as students and faculty do not know that the university is bribing politicians, investing in countries with dictatorial regimes, or whatever, and as long as they have no way of influencing the university’s actions, those acts will not hinder the university in its proper function of pursuing truth, however much good or damage they may do in the outside world. Once the university community realizes that the university does, or can, take actions substantially affecting the outside world and that students and faculty can influence those actions, the game is up.

There is no satisfactory solution to this dilemma within the structure of the present corporate university. In most of the better universities, the faculty has ultimate control. A university run from the outside, by a state government or a self-perpetuating board of trustees, has its own problems. A university can pretend to make no decisions or can pretend that the faculty has no control over them, for a while. Eventually someone will point out exactly what the emperor is wearing.

With an activist culture in place, the university endures more and more blows to its truth-seeking abilities. UC Berkeley spent an estimated $600,000 on security for Ben Shapiro a couple months ago, after the chaos and protests of the past year. Staff cut seating in half, worried that protesters would dismantle chairs and throw them onto the audience on the bottom floor. Now, so I hear, student clubs are having difficulty hosting evening meetings on campus, as the administration makes up for the expenses by cutting down on electricity usage and janitorial services. Club stipends, of course, are down. All of this damages the educational environment.

My friends went to see Ben, and watched a woman with a “Support the First Amendment! Shalom Shapiro!” sign get dragged into a crowd and beat up. (Not reported by major media; falsely reported as a knifing by right-wing media.) David identified the internal problem of the corporate university, which I believe we see escalating; the external problem is when outsiders — most of the violent rioters in Berkeley since the beginning of 2017 — understand the political power of the university and the speech that goes on there, and seek to control the process of intellectual conflict through physical force. Both are advanced in accordance with the political involvement of the students as well as the teachers.

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On Sugary Drinks, Taxes and Demand Curves

A few days ago, I discovered a blog post on the website of Jayson Lusk (a very good agricultural economist whose work has often guided some of my own economic history research given that most economic history is also agricultural history). The post relates to a study of the implementation of a sugary drink tax in Berkeley to fight obesity.

Obviously, a tax will reduce the consumption of any good. That is pretty axiomatic and all that we need to know is how much. In other words, how elastic is demand. If all things are held constant, the quantity consumed relative to the price change will give you that measure.* However, the study that Lusk pointed too basically shows that we often do not hold everything constant.

The authors of the study point out that when tax is passed, there is generally a debate that occurs beforehand. This generates publicity about the issue. This alters the behavior of consumers because they face more information. This is an effect that must be isolated from that of the tax itself.  That is what the authors do in their papers and they find that a reduction of soft drinks consumption did occur during the campaign and after the tax was adopted but before it was implemented (they rely on on-campus sales of soft drinks at a “major university” which we can assume is UC-Berkeley). Thus, the reduction in consumption preceded the price change. Lusk himself found something similar in a case related to animal welfare. Using a Californian electoral proposition regarding animal welfare in the production of eggs, he found that the publicity surrounding the proposition changed consumer behavior.

Lusk, rightly in my opinion, points out this suggests that information-based policies are probably more efficient than heavy-handed measures like taxes.

But I think there is a deeper point to make. When you inform consumers, you don’t only change the location of the demand, you also change the slope of the curve. If a consumer is made aware of the costs (and benefits) of his consumption that he had not previously considered, he may become more sensitive to the price. Informing people about the ill-effects of sweet drinks might make them more sensitive to the price they pay. Imagine that the information campaign during the Berkeley vote on the tax caused consumption to become more elastic. That means that the tax’s effects is being amplified by the information effect from the publicity. Had the tax been imposed as a surprise, the effect would have been smaller. Basically, Lusk’s presentation of the argument is understating the effects of information-based policies.


* On a tangential point, I would like to remind that people can reduce their consumption of soft drinks without changing their total calorific intake. Indeed, if I am taxed when I consume a soft drink, I can switch to coffee with cream. Thus, pundits often confuse a reduction in soft drinks consumption after a tax as a step in favor of reducing obesity.