In conversations with colleagues about the issue of collective bargaining, I continue to hear the same refrain from many: that while the actions of the Board of Regents over the last year leave the faculty no choice but to unionize, and while admittedly we can’t assume that troubles with the Regents are over, unionization has its own great disadvantages. And the disadvantage always mentioned is that sooner or later, a union would “go wrong” and push for equality of salaries regardless of merit, and the University would sink into mediocrity. Is there a way to prevent such an outcome?
As an economist, I approach this question from the point of view of incentive structures. In designing an institution, it is essential that the right incentives be provided to cause individuals, out of their own self-interest, to promote the good of the whole. Of course, this idea goes back to Adam Smith and his doctrine of the “invisible hand.” According to the doctrine, in a system of private enterprise, in which competition is promoted and restraints to competition are vigorously combated by law, each individual and firm will, by pursuing its own self-interest, contribute to the good of society.
Adam Smith saw the key to consistency in the decentralization of decision-making and the prevention of the accumulation of too much power by any individual or group. Can this idea be applied to the organization of a university? I do believe so. Here, I will draw not only on my economic training but also on my experience in the growth of the economics department since the early 1950s.
A department is the essential unit for a faculty member. One’s loyalty is foremost to one’s own profession. It is natural to wish to be surrounded by stimulating colleagues and students. Of course, such a feeling can and does extend beyond the boundaries of a department. But it is unrealistic to think that one can have much influence beyond one’s own department. Within a department, however, a natural commonality of interests in favor of professional excellence has a chance to grow.
In hiring decisions, one naturally wants to hire the best — someone who will enhance the reputation of the department (from which all benefit, whether deservedly or not). In addition, on wants someone to serve as a mentor to younger members, attract good students (from which, again, all benefit), and provide a stimulating and productive environment. To be sure, there are exceptions. One hears of weak departments that resist hiring better colleagues and stay low in the national rankings. These seem to be clear cases warranting action on the part of deans and provosts to end the vicious circle.
But I shall limit myself to discussing the case of a department that is already good, and I ask: how can it best continue to improve, and what can save it from decline?
A department that is already of high quality has the dynamics to stay that way, provided it is careful to have rules against hiring its own Ph.D.s (at least, not until they have made their reputations elsewhere). I know of instances in retention cases, in which faculty members have expressed a willingness to take a cut in their salaries, if necessary to retain an outstanding colleague — even though their salaries may already be lower than that of their colleague. It is almost inconceivable that this would happen across departments. I may be very sorry if an illustrious member of another department is bid away by another university, but there is not too much that I can do about it. Besides, it has a small effect on the reputation of my own department. But colleagues are willing to fight hard to maintain the quality of their own department.
Thus, I think it is essential that when the time comes for the distribution of salary increases, particularly the division of merit and across-the-board increases, — if these decisions are made centrally — it may be in my interest to favor an across-the-board increase. I am more apt to be selfish because the “others” to whom increases might go are mostly nameless individuals. But if the decisions are made at the departmental level, I am more apt to behave in an altruistic manner — because it is in my own selfish interest to do so!
Quality is based on peer review, and one’s peers are largely one’s departmental colleagues. Our professional pride is found largely at the departmental level. The greatest safeguard of quality in a university is therefore to be found at the departmental level.
While departmental decisions must, of course, be subject to checks at higher levels, the important initiatives should take place at the departmental level. Departments have a collective interest in maintaining their reputations for quality within the University, and a college-level promotion and tenure committee is necessary to promote this type of incentive.
These procedures, which we basically now have, although they could be improved, are very precious to the academy and should be protected and fostered in any collective-bargaining environment.
Chipman is a Regents Professor of economics.