Academic Freedom

I was forwarded a link to University of Chicago President Robert Zimmer's address at Columbia University on academic freedom. You can find the text here.

Freedom is an interesting idea, and not without its perils. Freedom allows you to try out new ideas. Some new ideas are good, and some not. Natural selection sorts them out, and it can be unpleasant for the losers. But the danger of not exploring the survival-scape is also dangerous. Perhaps that explains the tub-of-war between left and right in the political realm, which might echo the similar conflicting emotions of hope and fear when we consider the unknown.

In the context of the academy, Pres. Zimmer expresses the desire to "move us beyond the views of academic freedom as a near theological principle on one hand, or as a peculiar entitlement for a privileged few on the other." Those would be the views from the inside and outside, respectively.

Zimmer references the founding of the University of Berlin in 1810, calling it the "birth of the spirit of the modern research university as we know it today." Here it is in 1850:

Image courtesy of Wikipedia

This "German model" was formed with these objectives (quoting Zimmer):

[F]irst, that the goal of education was to teach students to think, not simply to master a craft; second, that research would play a role of central importance―and teaching students how to think would be accomplished through the integration of research and teaching; and third, that the university should be independent, and not be in direct service to the state.

The first of these resonates with the aim of liberal arts and its associated complex thinking outcomes. Zimmer quotes Friedrich Schleiermacher, who presented the idea of students enabled

to become aware of the principles of scholarship, so that they themselves gradually acquire the ability to investigate, invent, and to give account. This is the business of the university.

If I may paraphrase: perpetuating our ability to create new knowledge is the aim of the university. More idealistic is the description of the relationship between the university and the complex problems that bedevil the world outside the ivory gates:

[I]t is universities’ openness to ideas, to analytic debate, to rigor, and to questioning, and the provision of an umbrella, and in fact safe haven, for clashing thought and perspectives, that best illuminate societal, scientific, and humanistic issues.

Ideas and careers coincide in academia, and the ills of one infect the other. But success as a professional thinker inside the gates also depends on political skills and personal relationships. Fads sweep through the academy just like they do in pop culture. What's "hot" can force what's not into the deep shade of that umbrella. That, however, is the nature of freedom.

Zimmer notes that there are external forces that do not understand and have sought to curtail this freedom, which produces voices from the academy that discomfit the administration from time to time. He sketches a scenario:

Suppose there is a war that is very unpopular with the faculty of university X. A motion comes before the faculty governing body to the effect that the faculty of X declare themselves opposed to the war and call upon the government to end it immediately. What should happen? Is this faculty expressing their views? Or is it a chilling act that is inappropriate? What do considerations of academic freedom say?

This is the view from the President's office, and he notes that it becomes more complicated if said president is "politically active," which he advises against. The reason is far-sighted:

Universities are institutions with a long history and the prospects for a very long future. It is essential to preserve their value, their capacity for inquiry, discovery, and education over time, which will inevitably far outlast any particular political issue of the day, no matter how important it is.

It made me think of Spinoza, this speech. Bertrand Russell shows his affection for the philosopher in The History of Western Philosophy, with a poignant introduction (pg. 569):

Spinoza (1634-77) is the noblest and most lovable of the great philosophers. Intellectually, some others have surpassed him, but ethically he is supreme. As a natural consequence, he was considered, during his lifetime and for a century after his death, a man of appalling wickedness. He was born a Jew, but the Jews excommunicated him. Christians abhorred him equally; although his whole philosophy is dominated by the idea of God, the orthodox accused him of atheism.

We owe our intellectual heritage to those who, with or without the shields of academic freedom, presented their ideas. Many did so despite fear of execration. The ideas themselves may or may not be ultimately successful, but nothing can replace the hard work of creating and disseminating them to find their fates. The fewer the barriers, the better.

Endowments and Unpronouncable Laws

"Fortunes Falling" is the title of an Insidehighered article chronicling the rapid unwinding of university endowments. As the market value of investments tumbled, so did the payouts for institutional uses like financial aid. Even with a three-year trailing average (the standard), payout amounts will dip appreciably. The common fund is used by many colleges. Their recent study jointly with NACUBO shows that for university endowments generally:

Institutions and their affiliated foundations reported an average rate of return of -3 percent for the fiscal year ending June 30, 2008, and the results of the Follow-up Survey show that endowments fell an additional 22 percent in the first five months of FY09.

In fact, the tables in the report show that across all sizes and types of endowment, the returns were close to -22% from July 1 to November 30, 2008. Of the surveyed institutions, 27% planned to decrease draws, and 1% increase. The rest were status-quo or unknown. Interestingly, the survey was for amounts, not percentages. This must be because policies calculating the annual draw fixed the number before October. Next year the trailing average will come into play. For most, it looks like this would reduce payout by one third of the 22% drop, or about 7%. This obviously means more for institutions that depend heavily on large endowments.

Davidson College is one of those that requires a hefty endowment draw to keep the lights on. And it has the misfortune to be in a state that has not (yet) passed a new law governing endowment draws called UPMIFA, which updates UMIFA (this is the unpronounceable bit--try it). The Uniform Management of Institutional Funds Act, dating from 1972, prevents funds from selling off parts of the corpus of the endowment to raise cash if that would cause the total amount left to dip below its original donated value. The act is quite readable, despite using vocabulary like "eleemosynary." The new act inserts the word "prudent" between "uniform" and "management", and allows the management of the fund to be less prudent (!) but more beneficial to the holder. Specifically, it allows the fund to be drawn down even if it's under water.

With the precipitous drop in market values, the 1972 shift from fixed income endowments to higher return (and higher risk) instruments led to some good years for endowments. But the law only really works when the balloon is going up. Just like the real estate market, bad things happen when values quickly. So North Carolina and the handful of other states that have not yet passed UPMIFA are not good places to have endowments that you depend on in thick and thin. One can imagine that some hard lobbying is going on in NC. According to a notification from NC Center for Nonprofits, it is pushing to have the law passed early in the 2009 session.

Even the new law is no panacea. It requires the institutions spend "prudently" even if it allows dipping into the original corpus of the endowment. What exactly this means will lead to some interesting conversations. One thing is for sure: the conventional wisdom that the stock market is the best place for such investments has surely been shaken. There are risks and there are risks. The risk of staying out of the market is that one has to accept less than optimal returns in the good times. But full investment in even a "balanced" portfolio of equities means taking it on the chin during some part of the business cycle. In some ways this is no different from the dilemma faced by the average investor, but if the university payroll depends on the endowment, the stakes are much higher. If you have to let good people go because you can no longer afford them, that damage takes a long time to repair.