By Eugyppius
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Back in August, the Wall Street Journal ran a long article on the insane spending of American public universities, with special emphasis on their proclivity for expensive building projects. This is an issue very close to my heart. I spent over a decade in American academia, at several different very wealthy institutions, and every semester of my experience was marred by major, highly disruptive, noisy and openly unnecessary building. Most of these schools have a long line of extravagant projects planned generations into the future. They routinely tear down structures thrown up mere decades ago, only to replace them with larger and newer architectural monstrosities double or triple the original size. They are constantly ripping up squares and walkways only to repave and re-landscape them with ever more elaborate modern sculptures, fountains and hedges. The last school I worked for spent 18 months “improving” the lawn in front of my office building. Among other things, they dug a massive winding trench through it, which they filled with water to make an artificial creek. Then they planted weird reeds everywhere and constructed various bridges so pedestrians could traverse their fake wetland. They turned a modest grassy area with a few simple brick walkways into a monstrous muddy outrageously expensive eyesore.
You have to ask, at some point, what all this is even for. Near the end of my time at that school, some faculty committee produced an assessment of campus facilities and how they had grown over the years. I was amazed to find that, despite hundreds of millions wasted on construction since 2000, classroom and faculty office space remained stubbornly insufficient and had not expanded for decades.
From the article at the link:
The nation’s best-known public universities have been on an unfettered spending spree. Over the past two decades, they erected new skylines comprising snazzy academic buildings and dorms. They poured money into big-time sports programs and hired layers of administrators.
Then they passed the bill along to students.
The University of Kentucky upgraded its campus to the tune of $805,000 a day for more than a decade. Its freshmen, who come from one of America’s poorest states, paid an average $18,693 to attend in 2021-22.
Pennsylvania State University spent so much money that it now has a budget crisis—even though it’s among the most expensive public universities in the U.S.
The University of Oklahoma hit students with some of the biggest tuition increases, while spending millions on projects including acquiring and renovating a 32,000-square-foot Italian monastery for its study-abroad program.
The spending is inextricably tied to the nation’s $1.6 trillion federal student debt crisis. Colleges have paid for their sprees in part by raising tuition prices, leaving many students with few options but to take on more debt. That means student loans served as easy financing for university projects.
Construction is merely the most visible extravagance modern American universities have allowed themselves. They are also spending vastly more on personnel, especially administrators. The University of Connecticut has increased its spending by 73% between 2002 and 2020, “Much of that … driven by personnel costs, with spending on benefits more than tripling.”
More:
Many university officials struggled to understand their own budgets and simply increased spending every year. Trustees demanded little accountability and often rubber-stamped what came before them. And schools inconsistently disclose what they spend, making it nearly impossible for the public to review how their tuition and tax dollars are being used.
“These places are just devouring money,” said Holden Thorp, who was chancellor at the University of North Carolina at Chapel Hill from 2008 to 2013 and is now editor in chief of Science. Offering everything to everyone all at once is unsustainable, he said. “Universities need to focus on what their true priorities are and what they were created to do,” he said.
So what’s happening?
A conventional thesis is that schools have difficulty marketing their academic programmes to students; what faculty do and teach is opaque to outsiders and difficult to showcase on campus tours. Instead, they compete on amenities and facilities, seducing prospective enrolees with shiny libraries and dining halls. There is surely something to this, but as explanations go, it’s unsatisfying. It doesn’t explain how this competitive spiral began in the first place, and it also can’t account for the truly massive build-out of the administration. Yale University, to take just one example, hired more than 1,500 new administrative staff in the sixteen years between 2003 and 2019. Many of these managers have baffling titles and either provide no obvious services or are actively annoying.
The phenomenon before us is perhaps too blunt and obvious to notice at first. Federally-backed student loans increased the amount that schools could charge, and as they raised tuition to claim this money, they had to do something with it. For the most part, that something amounted to expanding the ranks of those cadres responsible for spending money, namely the administrators and their subordinate staff, as well as those things which administrators manage, such as buildings and the building of them.
Via some mechanism, in other words, the institutional apparatus of the university itself – including its central managers and its physical manifestation in the form of the campus – has absorbed the new resources. I submit that this is a less-than-obvious outcome. The increased funding could have been an occasion for simple corruption, for example. The existing administration and the better-connected faculty could have paid themselves more and deepened their expense accounts. They did that to some extent, but not nearly as much as they could have. Alternatively, the money could have been spent on core academic functions, such as hiring more professors, increasing faculty salaries to snag the best scholars, improving research funding and facilities or building more and better classrooms. Obviously, faculty have better-appointed offices and classrooms now than they did thirty years ago, but it is almost nothing in comparison to the money pissed away on worthless buildings and worthless managers.
For our second example, we leave the benighted world of academia and betake ourselves to the universe of nonprofits. Consider this amazing Twitter thread from last year on the Wikimedia Foundation. As anybody who has ever used Wikipedia knows, the site is constantly begging for donations, frequently with obtrusive banners.
These appeals have worked: The Wikimedia Foundation has pulled in millions of dollars, even as the cost of web hosting (about $2.5 million/year) has remained constant. As it turns out, less than half of the Wikimedia budget has anything to do with running Wikipedia. With the rest of the money, the Foundation have vastly expanded their staff; the organisation now employs 400 people and by the end of 2021 they had accumulated over $230 million in assets. Because they now have vastly more money and more people than they need to run a crowd-sourced encyclopedia, they have become a grant-making institution. Many of their staff run things like the Wikimedia Alliances Fund, which “supports organisations that can contribute toward the strategic direction of the Wikimedia Movement, especially those that promote knowledge equity.”
Many Wikimedia grant recipients are absolutely atrocious. The Twitter thread highlights a few examples. Among them is something called the STEM en Route to Change (SeRCH) Foundation, which has received money from the Wikimedia Knowledge Equity Fund “to expand our repository of content highlighting the experiences, technical expertise, and traditional knowledges of STEM practitioners who have been historically excluded.” They have a YouTube channel sporting 5 videos and 177 subscribers, and an equally deserted blog that has been mostly dormant since 2022. Somewhat more serious is Borealis Philanthropy, a leftoid culture war operation that has partnered with Black Lives Matter and in 2021 had total revenue of $83.9 million. Their “Racial Equity in Journalism Fund” received $250,000 from the Wikimedia Foundation in 2021 “to support US-based journalism organizations led by and for people of color.”
Again, it helps to concentrate on what the Wikimedia Foundation have not done with the vast money Wikipedia users have given them. They have not taken the high road and poured the excessive donations into Wikipedia itself, which is surely what the their donors expected them to do. Nor have Wikimedia management simply lined their pockets with the funds, though I have no doubt they’re all compensated well in excess of their talents. Instead, we see again the ominous middle path: The institution itself has absorbed the money and expanded its managerial staff beyond all necessity.
While the Wikimedia Foundation surely hope to further their political goals with their dumb grant-making, the bewildering variety of funds, projects and initiatives they run has a much more immediate purpose, in that it gives the bloated organisation something to do. In fact a great many of these philanthropic organisations, viewed with a more cynical eye, seem to exist primarily as make-work projects for staff who pass money around among themselves. Borealis, for example, is a “philanthropic intermediary,” which uses grants from organisations like Wikimedia to make its own grants to other organisations. All of this is perverse and malicious in its own way, but it’s also profoundly stupid.
“Yes, eugyppius, that’s all well and good, but isn’t this what we’d expect? University administration and non-profits are subject to considerable scrutiny. Open corruption is hard for them. The managers can’t so easily pilfer funds, so when they have an excess of them, they simply hire more managers like themselves.”
Fair enough. For our third example, then, we’ll turn to the corporate sector. Here, surely, we would expect rising profits not to feed the managerial behemoth, but to disappear into the pockets of business owners primarily and upper management secondarily. That is, after all, the whole purpose of running a business, and while it’s true that the corporate sector has produced many wildly wealthy people, that is not the only thing it has done. In fact, the same basic dynamics are visible here as well.
For more details, I turn to a book with which I’ve long had a love-hate relationship, namely David Graeber’s Bullshit Jobs: The Rise of Pointless Work and What We Can Do About It (2018). After many pages pontificating about the dumb things managers get up to, Graeber finally gets around to asking what is driving this phenomenon in the first place. This is the topic of Chapter 5, which asks “Why Are Bullshit Jobs Proliferating?” As a “parable” of corporate-sector managerialism, he presents his readers with the recent history of Elephant, a French tea company, and while his narrative is at points contentious, it abounds with suggestive details.
The story goes like this: Via various production-line improvements, Elephant increased manufacturing productivity massively through the 1990s, and profits rose accordingly. Some of these profits went to Unilever, Elephant’s parent company, but factory workers were angered when their improved efficiency did not redound to better pay for them as well. According to Graeber, there was through the 1970s a “tacit understanding … in much of the industrialized world that if productivity …. improved, a … share of the increased profits would be redistributed to the workers in the form of improved wages and benefits. Since the eighties, this is no longer the case.”
He quotes an employee, who describes where the excess money went instead. Not only did nobody’s salary increase, but Elephant also declined to expand its workforce, operations or machinery – just as American universities have failed to use easy tuition money to improve education and the Wikimedia Foundation has spent its donated millions on a great many things besides Wikipedia.
So what did they do? They started hiring more and more white-collar workers. Originally, when I started working here, there were just two of them: the boss and the HR guy. It had been like that for years. Now suddenly there were three, four, five, seven guys in suits wandering around. The company made up different fancy titles for them, but basically all of them spent their time trying to think of something to do. They’d be walking up and down the catwalks every day, staring at us, scribbling notes while we worked. Then they’d have meetings and discuss it and write reports. But they still couldn’t figure out any real excuse for their existence. Then finally, one of them hit on a solution: ‘Why don’t we just shut down the whole plant, fire the workers, and move operations to Poland?’
Here we have, in our note-taking catwalking managers, the direct business-world equivalent of the proliferating deanlets who pollute American higher education and the Chief Talent and Culture Officers who lard the Wikimedia payroll.
Graeber argues that these pathologies amount to a kind of neo-corporate feudalism:
[A] classic feature of medieval feudalism is the creation of hierarchies of ranked nobles or officials: a European king might grant land to a baron in exchange for providing a certain number of knights to his army; the baron, in turn, would grant most of that land to some local vassal on the same basis … Such devolution would proceed … down to local lords of the manor …
As a general principle, I would propose the following: in any political-economic system based on appropriation and distribution of goods, rather than on actually making, moving, or maintaining them, and therefore, where a substantial portion of the population is engaged in funneling resources up and down the system, that portion of the population will tend to organize itself into an elaborately ranked hierarchy of multiple tiers…. As a corollary … within those hierarchies, the line between retainers and subordinates will often become blurred, since obeisance to superiors is often a key part of the job description. Most of the important players are lords and vassals at the same time.
Like many leftists, Graeber is particularly bothered by hierarchies, and this distracts him from the phenomenon he is trying to analyse. The problem with the managers is not their “feudal” or hierarchical arrangement. Simplifying brutally, medieval feudalism arose from the fragmentation of central government and the haphazard appropriation of its functions by the aristocracy. Feudal lords may have been violent and extractive, but they were by no means a pointless excrescence on society. They carried out, in their imperfect way, the standard pre-modern political functions of justice, taxation and war.
The absurd managerial apparatus that the West has sprouted today is entirely different. It characterises not only state institutions and functions, but organisations in every arena of endeavour that have achieved sufficient size and complexity. Whereas key features of feudalism arose in response to the difficulty of collecting rents from remote and recalcitrant peasant farmers, managerialism reflects a nearly opposite phenomenon. That is to say, it is not a system that emerged to extract more money from taxpayers, customers, students or donors, but rather an institutional response to the abundance of these resources after the institution has collected them.
There is a Principle of Managerial Self-Multiplication at work here. Increased funding is used first and foremost to expand those sectors of the bureaucracy which have initial control over these funds, and secondarily to give the expanded bureaucracy something to do. The faculty at almost all universities operate with substantial independence from the administration and they are arranged in self-governing departments. Hiring more faculty would not actually keep the expanded administration very occupied, and so a great part of the funds go into classic administrative projects like construction instead. Grant-making is the direct equivalent for non-profits like Wikimedia Foundation, and the corporate sector is full of its own manifold chicanery, which Graeber documents in very entertaining detail. An important feature of all this runaway managerialism, is that almost none of it is about the core institutional mission itself. It is not about teaching students, or making tea or running an online encyclopedia. It is instead perversely recursive, addressed to the internal management of the institution. This is why so much of it seems to be, well, bullshit.
Simple corruption would be vastly preferable to this cancer. As bad as it sounds, I would rather have university administrators earning millions than university administrators spending millions to expand their Diversity, Inclusion and Equity brigades. This got me wondering, to what degree managerialism might be an unintended consequence of a cultural ethos against things like excessive profiteering, corruption and greed. I’m sure this plays a role for schools and non-profits, but as corporations suffer from the same condition, it can’t be the primary explanation. What’s really happening, must have something to do with institutional friction. As money enters a sufficiently elaborate institutional apparatus, there are endless opportunities for bureaucrats to direct the funds towards their own, internal purposes. Complexity plays a central role here; where no single person can comprehend how the institution as a whole functions, spending decisions become impossible to direct towards any rational purpose. Over time, the resources are commandeered in service of the separate, institutionally mediated goals of the managers, who strive above all to expand their own ranks.
Managerialism is an ever-advancing process of decay masquerading as an administrative system, and it has become a defining pathology of Western civilisation. Our lives are run by massive institutions in thrall to complex forces beyond all human understanding, which every day become more convoluted, unpredictable and self-serving. This parasitic, tumorous growth now commands the resources of a great part of the economy, and it uses these resources to grow itself still further. Worst of all, nobody has any idea about how to stop it, let alone reverse its terrible progress.