# localdeity comments on Where’s the economic incentive for wokism coming from?

• Universities are profit-focused?

Yes. (Edit: Also prestige-focused, although one could say prestige is a means to long-term profit; more in below comments.) Take a look at university endowments...

• Harvard: $51B • Yale:$42B

• Stanford: $37B • Princeton:$37B

• MIT: $27B • UPenn:$20B

• ...

How do they get there? It’s not through lack of trying, and the majority of it is not tuition. Rather:

• My mom is familiar with a few of the above universities, and has said that “Napoleon would be proud” of how organized and efficient they are at hounding alumni for donations.

• I think they also care a great deal about getting money from research grants. I’ve heard many professors feel pressure to get grants. Probably in part because:

• There’s an entire system for managing money that has been given to them with strings attached (e.g. funding XYZ research) and always using the most-restricted money to pay for a given thing. For example, maybe the university needs to spend $20k on maintenance for a telescope, but then if they’re given a grant of that size to do astronomy research, then they can use the grant to pay for that maintenance, so the grant has effectively given them$20k to do anything they want with. This does make sense—it’s rational behavior and it is fulfilling the terms (Mom said they’re very careful to remain within the letter of the law, especially for government grants), but it has interesting consequences.

• And then there’s investment earnings from past years’ endowments.

• Agree that those are large amounts of money you just listed; think it’s highly dubious that prestigious universities having lots of money shows that universities are profit focused, rather than say ‘prestige’ or ‘status’ focused. Getting lots of donations makes your university prestigious; so does producing lots of socially respected research for free, charging your poor students less, and having a faculty that promotes whatever political beliefs are most popular among academics. Only one of those things actually generates large endowments, though, and even if universities were good at producing those that certainly doesn’t imply any kind of selection mechanism whereby Harvard can actually be replaced by another university that does less unpopularly “woke” stuff.

• They are obviously very good at getting money, consistently so, but yes, it’s possible to do that as a side effect of focusing on something else. I would say it’s at least Bayesian evidence in favor of that being their focus. And they do have people whose job is 100% getting money from alumni and investments and stuff, but yes, that doesn’t mean it’s the central focus of the organization, any more than employing janitors means they’re focused on cleanliness. We’ll have to get into what it means for a large organization to be focused on something.

I agree that universities are very focused on prestige. And you make a good point that focusing on prestige can be hard to distinguish from focusing on profit. (Though that goes the other way too: prestige can be seen as a means to money. The more prestigious your university, the more likely the next generation’s Bill Gates is to attend your university, and then you have X% chance of persuading them to donate $Y00 million dollars (in exchange for naming a building after them), the expected value of which might well exceed the tuition from all your other students. Prestige also probably increases the donations you get ceteris paribus, and grants, and also the base tuition you can charge; also the degree to which you can persuade rich parents to donate in exchange for accepting their kids.) I would correct myself that it seems clear that universities are not very focused on cutting costs (such as administrative overhead), and in that sense they’re focused on making revenue rather than making net profit. Well, there are probably mid-level administrators who pinch pennies, and on general principle I expect some of them do so to unwise extremes. (It happens in companies too: some genius will decide that they could save$X per year by cutting some corner, which creates inconvenience for everyone else, costing $Y >$X in employee time alone, and probably $Z >$Y in morale and goodwill.)

Which brings us to the professors. Googling for actual data, this 2011 post cites a Scientific American article and a concurring anecdote from a Harvard CS professor, which says:

Most scientists finance their laboratories (and often even their own salaries) by applying to government agencies and private foundations for grants. The process has become a major time sink. In 2007 a U.S. government study found that university faculty members spend about 40 percent of their research time navigating the bureaucratic labyrinth, and the situation is no better in Europe.

The cited SciAm article also says:

Between 1997 and 2006 the National Science Foundation found that the average applicant had to submit 30 percent more proposals to garner the same number of awards.

I’m sure there’s plenty of variance, but my vague impression is that things have generally become worse rather than better in this regard. And if a Harvard professor has to spend 40% of his time on getting money, that indicates that his administrators are making him prioritize money over research to a decent extent. Maybe they think CS research is low-prestige? (Though that 40% figure is an average, I assume across all scientific fields—the SciAm article doesn’t specify the study.) Maybe they are in fact penny-pinching to the detriment of the organization.

Overall, universities are huge bureaucratic monsters, with a bunch of sub-units that act with somewhat different objectives, and if you imagined it was guided by one plan, the plan would be insane, self-contradictory, etc. Things I would say:

• Prestige and money are both top contenders for “overall strongest determinant of university decisions”.

• There are lots of parts of universities—though definitely not all—where saying “I’ll assume this is optimized for making money” will make correct predictions. Others where assuming the same thing about prestige would be better. And some places where it’s something else.

• It seems that professors, because of marching orders from their direct superiors, are very focused on money. They’re also focused on their research, and/​or their teaching duties. I don’t think most professors are particularly focused on the prestige of the university (though many are on their own prestige). I do suspect the marching orders are too focused on money—to the university’s detriment—because of managerial dysfunction issues (costs are more legible than “the x% chance of truly great research”; and legibility matters because those who fund the department presumably have to justify their decisions to higher-ups).

• Actually, bringing it back to wokeness, for someone whose job it is to optimize university prestige, “a bunch of woke students are complaining that Professor Bob said something offensive” is a legible cost, while “professors have to spend time and emotional energy on censoring themselves; more freethinking professors are likely to leave” is not legible.

• Top-level administrators are more focused on prestige than on money. Unless maybe the university is in serious danger of bankruptcy. (There is probably an analogue of Maslow’s hierarchy of needs here.)

• Incidentally:

1. Direct prestige hacking. If you say tuition costs $20k, that might tell otherwise-naive customers that your university has a certain level of prestige. If you say it costs$50k, that probably broadcasts that your university is actually more prestigious, attracting more/​better applicants; and if you then tell all the individual prospective customers “But for you, it’s $20k!”, then you benefit from the improved applicant pool without doing any real work. 2. Price discrimination. Rich people would be willing to pay$50k, poorer people would only pay \$20k. You can maximize your profit while admitting the same set of students by charging each group different prices.