In the current financial ‘crisis’, there have been many critiques and analyses of the situation. People criticize the greedy, the proponents of particular financial theories, various mortgage institutions, and the government, attempting to lay blame. There have been various ideas proposed to create jobs and lessen the financial burden placed on a variety of people. There has been a renewed look at fiscal policy during the Great Depression and other eras for solutions. One such look in the NYT today checks in on banking in Ancient China, quoting that “until the end of the Qing dynasty, Pingyao’s banks had confidence, trust and good manners.” They failed due to a collapse in the central government, not any loss of faith in the banks themselves. But the artile also comments on what area inhabitants have learned from that situation – that “wealth does not last for more than three generations”, which is both a warning and an adage to live by. We do not need wealth, though we are often tied to its gain. The same could be said for colleges and universities that have been hit quite hard by the crisis.
We’ve all heard that endowments and colleges ‘have to’ be long-sighted. The ability to maintain competitive salaries for the best professors, to develop infrastructure and other permanent resources, and to invest capital in illiquid vehicles for long-term returns are all considered required for a functioning university. The academic world is, and will continue to be, a competitive industry. While some may see problems with the current model’s lack of upward movement, I do not see major changes to the system as realistic at this time. So what does this financial long-sightedness mean for the average endowment? What does it mean for professors, other educators, and students? What does it mean for this country in the current financial crisis? What does it mean for the system as a whole?
First, endowments should be seen as what they are – revenue streams. While some regulation may be necessary to keep them from getting too big for their britches, the majority of staff working in these areas do it for personal satisfaction, rather than big money or big influence. They aren’t your typical Wall Street junkies. And while some students may feel accountability and endowment investor responsibility is important, typically the most objectionable investments are not the most lucrative.
Second, the successful academic life should have a cap. I’m not talking about a general removal of staff and tenured professors over a certain age, but again, I think some broad regulation may help. This involves thinking on the longer term for tenure and the best use of resources. For example, a professor at a science-based school should be able to use email, just as professors required to publish must be able to write. Another example might be seen in the appropriate time for a department head to retire or move on to another line of work. Academia has a problem with its current system in that it allows too many strong minds to stagnate without the hope of further advancement. A longer term horizon should include a way to incorporate such talent and eventually expedite the removal of those who’ve had their time in the sun.
We are consistently worried, as a nation, abotu teh security of our financial resources. While I’m not advocating widespread unemployment, we need to realize, at the core, that security does not come from a job, or from wealth. Currently our unemployment rate is at 8.1%. While we may all know some of those unemployed, it’s not really that bad, and I doubt it’s going to be.