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Gershom Gorenberg: Where the Free Market Flunks
Gershom Gorenberg

But the university should fight for the idea that our society needs some riches whose value can never be measured by the market

If the number of rumors moving around an institution, and their speed, indicate the prevailing fear level, then among faculty at Tel Aviv U. these days, fear is intense. One rumor said the classics department is about to be closed. Not so, insist reliable sources in Israel�s largest institution of higher learning. Powerful people hold classics in great regard. There was more basis to the rumor about the looming demise of the Arabic language and literature department -- separate from Mideast studies, where Arabic is studied as a research tool -- though I�m assured the axe has been diverted.

The details may be as uncertain as the plot lines discussed in a course on the post-modern novel. But the fear is based on hard fact. Tel Aviv U. is in financial trouble. That puts it in the same situation as other Israeli universities, but being biggest in the country gets your troubles more attention. Universities, as one administrator explains, have built-in rising costs as they age: Last decade�s lecturers become this decade�s higher-paid full profs. In the roaring 90s, that was OK. Peace had broken out, high-tech was booming, Israel was flush. Endowments brought in cash, and the government was willing to spend.

Today, Tel Aviv U. is happy if the value of its endowments doesn�t shrink, as the rest of the economy is doing. You can treat that as a force of nature. But the cuts in government spending are the product of human decisions. True, the government�s own pie is shrinking -- but people, sitting around the cabinet table, decide who gets hurt more and who less. According to one source, Tel Aviv U.�s income has shrunk by 200 million shekels, about $42 million, in the past two years, meaning it must cut its own budget by 15 percent. That�s before an additional budget reduction built into Finance Minister Benjamin Netanyahu�s new economic plan. Another university official put the needed cut, as recommended by a University Senate committee, at $50 million.

Inside the university, you can hear arguments about how much the crisis is due to misplanning. In the good years, say critics, administrators were hired at high salaries; buildings built with donations but without endowments to pay for future upkeep. The buildings will stay. Some of the administrators have been fired or have had their salaries cut.

Ultimately, though, the debate about who within the university is at fault may express false consciousness. For those lost in the engineering department, that term refers to a belief that keeps the oppressed from seeing the true source of their oppression. It�s the opposite of paranoia: You don�t see that someone really is out to get you. The academic infighting diverts attention from the single largest factor in the crisis: government policy and the free-market fundamentalism behind it.

Fear for the future is particularly acute in the humanities faculty. The scholars who teach history and literature fear a policy proposal being pushed by a new administrator brought in to solve the money crunch: each piece of the university must become self-supporting, based on the tuition and grants it brings in. That, say humanities folks, is fine for hard sciences, where profs can get big outside grants for projects. Somehow, research on the Talmud or medieval English history doesn�t attract the same cash. The humanities faculty last year cost 110 million shekels a year, and brought 80 million. Apply the economic logic of a shirt factory, and it�s a losing business that will have to downsize.

The policy is still up for debate. A top university official told me "economic feasibility" will be only one factor in planning. Linguistics, for instance, won�t have to be profitable -- though there�s "a question of the size" the department needs to be.

Yet the proposal itself is proof that academia is no ivory tower secluded from society�s fads. It reflects the same logic as Netanyahu�s economic plan, in which higher education, kindergartens and social services get punished, while new tax breaks benefit the wealthy and subsidies to business remain untouchable. Netanyahu and like-minded Thatcherites like to compare the size of Israel�s productive" and "public" sectors -- the former is too small, and is carrying the weight of the latter.

Watch their logic: A private company that manufactures textbooks is "productive"; the teachers who use them to create knowledgeable citizens are not. A drug company is productive; doctors in a government hospital aren�t. The only goods that have value -- the only goods at all -- are ones sold on the open market and easily assigned a price. There is no value, by that measure, to being able to read the Illiad, or to being apply Homer�s subtle discussion of war to decisions we face today.

In fact, one purpose of government is to "produce" those goods whose value can only be set by public debate, not by the market. And one of those goods is a having an educated society, enriched by the past culture of humanity. To resort to the crude language of the Netanyahus of this land, universities "manufacture" that good.

Yes, public institutions can be inefficient (though they can�t match corporations for overpaying failed managers). And yes, in lean times both government and universities need to get leaner, which means tough choices.

But the university -- from students to silver-haired profs -- should also fight for the idea that our society needs some riches whose value can never be measured by the market. Whether the rumors acknowledge it or not, the philistines who�d ransack the universities sit around the cabinet table, and they should be the focus of the public struggle to save higher education in Israel.