Friday, July 12, 2013

The Wealth of Universities

Over time, universities become stronger and sometimes weaker, often department by department, sometimes  more generally. Hence one might try to understand why MIT's Economics department became so strong, rising from undistinguished to #1 for a long time

This problem might be analogized to Adam Smith's Wealth of Nations (1776), and the subsequent literature in economics. My colleague Peter Gordon led me to an article in the Journal of Economic Literature by Spolaore and Wacziarg (vol 51, 2013, p. 325ff) on explanations for differential economic development among nations and peoples. It's a remarkable survey--long term forces and persistence: biogeography and Neolithic conditions matter; long term persistence is at the levels of populations rather than locations; and, long term genealogical links across populations. Not nature vs. nurture, not genes vs. culture--it's epigenetic, it's the interaction.

Economics has two main accountings--prices and growth, and the problems of growth (and decline) are surely the most difficult. At the same time, all the explanations so far offered explain about half the variation. What Hirschman called the bias for hope, namely that even if you could prove that nothing is possible, in fact good things do happen, some people and groups find their way around the conventional historical limitations and current barriers. And so we want to know more about what they did, the lessons, and how replicable are those strategies.

Imagine trying to account for the wealth of universities, where by wealth I am thinking of the quality of their faculties and their research more than their actual endowments etc. Surely there are big exogenous effects, such as the land grant universities, the rise of the research university, the impact of federal (US) expenditures fostering research and education (fellowships) in the years since WWII, and especially from the 50s through the 70s, and the strong growth of the economies of the western part of the US (California in particular, after WWII) and the subsequent defunding of state universities (Michigan, Ann Arbor, being the prime case post-automobile industry declines). And there were internal effects of discrimination against particular ethnic groups and women, where some universities and fields were able to make enormous strides by opening up, while others took longer and suffered.

If you were a private university, if you did not become a serious research university, if you missed the boat in those 30+ years after WWII, if you were located in poorer parts of the country, and if you affirmatively acted for "white males", you were likely to suffer. Harvard had its "happy bottom quarter" of undergraduates until the later twentieth century.

But there is the story of Stanford and UCLA, and particular departments, such as economics at MIT, where leadership and chance were able to make a big difference. What are the lessons for universities and departments?

1. History and location matter, but often not how people imagine. It helps to have a big endowment and be located in a good place.  But it's not about universities but about peoples. Hence if you can import the right peoples you can plug into stronger traditions and make a big difference. The barriers are prejudice and allegiance to legacies.
2. Among populations, some have big advantages. Hence in The Chosen Few the fact that some post-Second Temple Jewish populations educated their sons to be literate (to read and understand the Torah) even though they were agriculturalists (and so there was no economic return from doing so, in fact a penalty) meant that centuries later those Jewish people had the advantages needed for a world economy that developed post-1500 or so. (Not that they got rich, but their skills gave them important roles in that economy--literacy and numeracy.) In the last forty years, the entrance of blacks and people of color, gay people, and women into the humanities has revitalized those fields and saved them from dying out.

In so far as you did not hire these populations you suffered gravely.  Berkeley did not try to hire Feynman after WWII since they already had one Jew in their physics department, and Harvard economics missed Samuelson because his "numeracy" was not their type. Many women were adjuncts or research faculty, in part due to nepotism rules, and were only made regular faculty when it was almost too late. African-American history was wide open for exploration for a century, and even after John Hope Franklin published his textbook, it was necessary for there to be many African American historians for the subject to be explored fruitfully.

Probably what has held back most institutions is their unwillingness to admit that past policies, now embodied in their tenured faculty, were less than optimal, and to write down these sunk assets and move forward. Faculties tend to reproduce their own, that writedown being an attack on themselves. Solidarity rather than competition.

More to come....