american academy of arts & sciences spring 2011 Bulletin vol. lxiv, no. 3 Challenges Facing American Higher Education The University and the City John Sexton, Ruth J. Simmons, Robert M. Berdahl, and Jared L. Cohon The Future of Our Research Universities John L.Hennessy The Great American University Jonathan R. Cole

The Future of Power Joseph S. Nye, Jr.

ALSO INSIDE: The Andrew W. Mellon Foundation and the NEH Support Data for the Humanities Nuclear Reactors: Generation to Generation Stephen Goldberg and Robert Rosner The Financial Crisis & Economic Policy Benjamin M. Friedman and Robert M. Solow Calendar of Events

September 30–October 2, 2011 December 7, 2011 Induction Weekend–Cambridge Stated Meeting–Stanford The Future of the Military Contents October 27, 2011 Speakers: John L. Hennessy (Stanford Stated Meeting–Berkeley University) and David M. Kennedy Nuclear Reactors: Healing the Troubled American Economy (Stanford University) Generation to Generation 1 Speakers: Christina Romer (University December 14, 2011 The Andrew W. Mellon Foundation of California, Berkeley) and David H. and the neh Partner with the Romer (University of California, Berkeley) Stated Meeting–Cambridge Academy to Support Data Holiday Concert Collection for the Humanities 2 November 9, 2011 Speaker: Christoph Wolff (Harvard Stated Meeting–Cambridge Academy Presents Scholar-Patriot University) Award to Yo-Yo Ma 3 Awarding of the Talcott Parsons Prize Performer: Robert Levin (Harvard and Response: Two Systems in the Mind University) Academy Meetings Speaker: Daniel Kahneman (Princeton For information and reservations, contact The University and the City 4 University) the Events Of½ce (phone: 617-576-5032; John Sexton, Robert M. Berdahl, email: [email protected]). Jared L. Cohon,and Ruth J. Simmons November 12, 2011 The Future of Our Research Universities 19 Stated Meeting–Chicago John L. Hennessy WikiLeaks The Great American University 27 Speakers: Geoffrey R. Stone (University Jonathan R. Cole of Chicago Law School), Judith Miller The Financial Crisis and (formerly of The New York Times), and Economic Policy 36 Gariel Schoenfeld (Hudson Institute; Benjamin M. Friedman Witherspoon Institute) and Robert M. Solow The Future of Power 45 Joseph S. Nye, Jr.

Noteworthy 53 New Publication

Nuclear Reactors: Generation to Generation

The repercussions of the March 2011 cri- the cost, safety, and security attributes of sis at Japan’s Fukushima nuclear complex the major nuclear reactor designs, as well will be felt around the world. However, the as their properties with regard to refueling incident at the Fukushima Daiichi nuclear and fuel disposition requirements. power plant is unlikely to reverse the de- In assessing the features of reactor designs, mand for nuclear power. Despite the events both those already deployed and those on in Japan, the governments of Turkey, the drawing board, the authors, gnf Se- Poland, Chile, Indonesia, and Algeria have nior Advisors Stephen Goldberg (Argonne announced that they are moving forward National Laboratory) and Robert Rosner with their nuclear power development pro- (University of Chicago), focus on two of grams. Abu Dhabi broke ground for its ½rst the key questions that will determine the nuclear reactor three days after the earth- future of nuclear power around the world: quake and tsunami off the coast of Japan. “What is safe enough?” and “What are we Although the pace of the nuclear renais- going to do about the nuclear waste?” Cost, sance may be slowed, a number of states Robert Rosner regulatory burdens, possible terrorist inci- are still committed to their nuclear energy dents, and the fate of alternative sources of plans. energy are other factors that will play an For more than three years, the Academy’s important role in the nuclear future. Global Nuclear Future (gnf) Initiative has Since the nuclear power plants in Fukushima brought together technical experts, policy- share design features with many reactors in makers, and proliferation specialists from the United States, Goldberg and Rosner around the world to identify and promote predict there will be greater public scrutiny measures that will limit the safety, security, of all domestic nuclear facilities, including and proliferation risks raised by the grow- increased pressure to retire some nuclear ing global appetite for nuclear energy. generating facilities earlier than their A new monograph, Nuclear Reactors: Gener- scheduled design life. ation to Generation, provides background on Nuclear Reactors: Generation to Generation is available on the Academy’s website at www Stephen Goldberg .amacad.org/publications/nuclearReactors .aspx. Other publications from the Global Nuclear The Academy is grateful to Robert Rosner Future Initiative available on the Academy’s and Stephen Goldberg for writing this time- website include: gnf ly paper, and to codirectors Steven The two-volume special issue of Dædalus on Miller (Harvard University) and Scott · gnf The Global Nuclear Future (www.amacad Sagan (Stanford University). The Ini- .org/publications/daedalus/fall2009/ tiative continues to have influence in the coverPage.aspx); United States and abroad, thanks to valu- able guidance from its advisory committee: · Multinational Approaches to the Nuclear Fuel Albert Carnesale (University of California, Cycle (www.amacad.org/publications/ Los Angeles); Thomas Isaacs (Stanford nuclearCycle.aspx); University and Lawrence Livermore Nation- · Shared Responsibilities for Nuclear Disarma- al Laboratory); Richard Meserve (Carnegie ment: A Global Debate (www.amacad.org/ Institution for Science); George Perkovich publications/nuclearShared.aspx); and (Carnegie Endowment for International · Nuclear Energy in the Middle East: Implications, Peace); and John Rowe (Exelon Corpora- Challenges, Opportunities (www.amacad tion). .org/pdfs/abudhabiReport.pdf ).

Bulletin of the American Academy, Spring 2011 1 Academy News

The Andrew W. Mellon Foundation and the National Endowment for the Humanities Partner with the Academy to Expand the Humanities Indicators

The American Academy of Arts and Sciences has received major tics, and religion departments at 1,400 four-year colleges and uni- awards of support for data collection in the humanities that will versities. The survey results will reveal up-to-date information on signi½cantly increase knowledge of the state of humanistic educa- data trends in the curriculum and workforce. tion and research in the United States. “The Academy’s Humanities Indicators project offers a much-needed Grants from the Andrew W. Mellon Foundation and from the yardstick for measuring the health and impact of humanities re- National Endowment for the Humanities (neh) will support the search and education in America today,” said Carole Watson, Academy’s Humanities Indicators (www.HumanitiesIndicators.org), Deputy Chairman of the neh. “The National Endowment for the the ½rst comprehensive collection of statistical data about the hu- Humanities is pleased to assist in this effort to provide academic manities in the United States. leaders and policy-makers the data they need to make informed decisions on humanities curricula, funding, and programs.” “We are grateful to the neh and to the Andrew W. Mellon Foun- dation for their commitment to the humanities and their con½dence Recent data from the Indicators reveal that: in the Academy,” said Leslie Cohen Berlowitz, President of the l Academy and project codirector. “With their support, we will con- Humanities degrees as a proportion of all bachelor’s degrees tinue to be able to provide critical data on the state of the humani- declined 46 percent over the past 30 years. ties to scholars, policy-makers, and the public that will inform and l More than half of students graduating from U.S. high schools enrich our national discussions for years to come.” in 2006 failed to demonstrate basic knowledge of history, and more than a third lacked basic knowledge of civics. The American Academy works closely on this project with the Na- tional Opinion Research Center (norc) under the leadership of l In 2003–2004, 28.2 percent of high school students were taught Norman Bradburn. Developed in collaboration with national hu- history by someone without certi½cation or a postsecondary manities organizations, the Humanities Indicators provide reliable degree in history, a greater percentage than for any other mea- benchmarks to guide analysis of the state of the humanities in ½ve sured subject area. areas: primary and secondary education, undergraduate and grad- l The United States ranks in the bottom third internationally in uate education, the workforce, funding and research, and the hu- the percentage of its population possessing prose literacy skills manities in American life. The Humanities Indicators website has necessary for successful secondary school completion (47 per- attracted more than 1.5 million visitors since it was launched in cent). January 2009. “Before the Humanities Indicators, data concerning issues as funda- The National Endowment for the Humanities was created in mental as the number of students enrolled nationwide in courses 1965 as an independent federal agency. It supports research and devoted to the humanities either were entirely lacking or were in- learning in history, literature, philosophy, and other areas of the consistently assembled, hard to access, poorly disseminated, un- humanities by funding selected, peer-reviewed proposals from wittingly ignored, and routinely underutilized,” said Francis around the nation. Oakley, President Emeritus of Williams College and cofounder The Andrew W. Mellon Foundation is devoted to sustaining the of the Academy’s Initiative for Humanities and Culture. “Those of humanities and the arts. It currently makes grants in ½ve core pro- us who try to assess and write about the state of humanistic stud- gram areas: higher education and scholarship; scholarly commu- ies nationwide are grateful for the assistance that the Humanities nications and information technology; museums and art conser- Indicators has ½nally made so readily available.” vation; performing arts; and conservation and the environment. The Andrew W. Mellon Foundation’s grant will help ensure that Including previous support, giving from the Andrew W. Mellon the Indicators remain accessible and updated with the latest avail- Foundation in support of the Humanities Indicators project totals able statistics and analysis. The neh will join in these efforts and more than $1 million. help support the Academy’s ½rst update to the Humanities Depart- mental Survey. The survey collects data from the chairs of art his- tory, English, foreign language, history, history of science, linguis-

2 Bulletin of the American Academy, Spring 2011 Academy Presents Scholar-Patriot Award to Yo-Yo Ma

The American Academy of Arts and Sciences presented the Scholar-Patriot Award to acclaimed cellist and humanist Yo-Yo Ma in recognition of his lifetime achievements as a musician, educator, and champion of multicultural understanding. The Scholar-Patriot Award is one of the Academy’s most presti- gious honors, given for extraordinary contributions of individuals who share the founders’ vision of service. Academy President Leslie Cohen Berlowitz and Chair of the Board Louis W. Cabot presented the award to Yo-Yo Ma on March 23, 2011, at the Academy’s Cambridge headquarters. “The motto of the American Academy is ‘Cherishing Knowledge, Shaping the Future’ and Yo-Yo Ma exempli½es these ideals,” said President Berlowitz. “Through his solo and collaborative inter- pretations of Bach and other masters, he has reinterpreted and enriched the classical tradition. And by drawing on diverse genres and cultures, he has added profoundly to the musical vocabulary of this generation.” Berlowitz also noted Ma’s extensive educa- tional work, including his training and mentorship of thousands of youth around the world and his innovative Silk Road Project. Ma was elected a Fellow of the American Academy of Arts and Sciences in 1993. He currently serves as a member of the Academy’s national Commission on the Humanities and Social Sciences.

Citation In your hands, a cello made by Stradivari in the eighteenth century, from the riches of three continents, has become the voice of the twenty-½rst-century global community. You have traveled from Carnegie Hall to the White House, from Juilliard to Harvard, from Sesame Street to the Silk Road–and you have taken all of us on your journey. cultures and generations, you are an ambassador for the ideals upon Twice named United Nations Messenger of Peace, you train and which the American Academy was founded–cherishing knowledge mentor the young and inspire us all with your music, your limitless and fostering collaboration in service to the public good. curiosity, and your enduring optimism. A student of Pablo Casals and Irven Devore, Leonard Bernstein and Fred Rogers, you have em- Prodigy and virtuoso, student and teacher, impresario and engaged braced every branch of learning and every musical style–from Bach citizen, we honor you for your creative genius, boundless enthusiasm, to bluegrass to the songs of the Bushmen of the Kalahari. Bridging appetite for innovation, and dedication to harmony among all peoples.

Bulletin of the American Academy, Spring 2011 3 Academy Meetings

The University and the City

Robert M. Berdahl, Jared L. Cohon, and Ruth J. Simmons Moderator: John Sexton Welcome: Leslie Cohen Berlowitz 1964th Stated Meeting, held in collaboration with New York University on December 8, 2010, at New York University School of Law

Welcome by Leslie Cohen Berlowitz Leslie Cohen Berlowitz is President of the American Academy of Arts and Sciences. She was elected a Fellow of the American Academy in 2004.

We are privileged to have four distinguished academic leaders–Presi- dents Robert Berdahl, Jared Cohon, Ruth Simmons, and our host, John Sexton–to speak about the university and the city. Today’s university presidents are leaders both in academic life and in the civic commu- nity, and the panel tonight is composed of four presidents who have been exemplary in this regard. The work of the Academy has always been closely associated with the development of our universities, in part because many of our Fellows are among the nation’s leading scholars and scientists, but also because our founders recognized that centers of intellectual life would be criti- Image © Atlantide Phototravel/Corbis cal to the nation’s economic and cultural vitality. Brown University, Washington Arch in Manhattan, New York Carnegie Mellon University, New York University, and the other mem- bers of the Association of American Universities (AAU) contribute to their cities, to the nation, and to the world in countless ways. They drive innovation in science, technology, and engineering; in health, medicine, business, and law; in education, the arts, and urban planning. They nurture the liberal arts and the humanities and advance intellectual and ethical inquiry. Borrowing from the motto of the Academy’s founders, they help cherish knowledge and shape the future. Our institutions of higher education are also critical eco- nomic engines. Last year, expenditures by U.S. colleges and universities equaled 3 percent of the gross domestic product, according to the National Center for Education Statistics. And that figure does not even take into account the economic benefit that results from university research and innovation, work that enriches all of our lives. Tonight’s distinguished group of university leaders has thought deeply about the complex and evolving role that universities play in America’s urban centers. The panel is led by John Sexton, the President of New York University. John assumed the presidency in 2002, and in just eight years he has led this institution, my alma mater, to global prominence. John was elected to the Academy in 2001. I hope that in this Academy anniversary year he will permit me to compare him to one of the Academy’s most determined and intense founders, John Adams. Adams felt that an institution of knowledge would be crucial to the welfare of any competent nation. He understood the differences between an ivory tower and an institution embedded in the active life of the community. That is a distinction that John Sexton has also keenly appreciated, whether here in Washington Square or in Abu Dhabi or Shanghai or the study abroad programs that now span no less than five continents. He demonstrates a profound commitment to the city and its in- tellectual buildings, like the other presidents here with us. And like John Adams, he believes that active engagement in the commu- nity helps develop more enlightened citizens.

4 Bulletin of the American Academy, Spring 2011 The University and the City

9/11 got all of us thinking ings, look to your left, to your right, and across the street, and not see an NYU build- about the city in a very differ- ing. To see another, you have to walk a block or two. Upon reading Gallatin’s ent way, seeing that it has a phrase, I began to realize the strength of special role to play in the world, being in and of the city in this radical way. Of being ecosystemic with it. Of declaring that this particular city is a it completely symbiotic with you. That got me thinking more about the city. And then miniaturization of the world 9/11 got all of us thinking about the city in in a way no other city is. a very different way, seeing–for some of us at least–that it has a special role to play in the world, that this particular city is a NYU We are gathered in the great room of ’s miniaturization of the world in a way no law school–a special, sacramental space, other city is. one where I have spent many of the great moments and sad moments of my life. Here Flash forward to February 2005. I had been one can easily channel the founder of NYU, talking informally to folks around town Albert Gallatin. Gallatin was Thomas Jef- about the relationship of universities and ferson’s and James Madison’s secretary of cities when Mike Bloomberg asked if I John Sexton treasury. While ambassador to France, he would run a two-day retreat for his com- missioners. He wanted me to visualize John Sexton is President of New York University, and Jeremy Bentham began to talk about what would be needed to make New York the Benjamin Butler Professor of Law, and Dean the universities of their day. In a letter from City great in 2050. Seven months before Emeritus of New York University School of Law. Gallatin to Bentham, Gallatin observes his race for a second term as mayor and he He was elected a Fellow of the American Acad- that the universities of their time, the great was thinking forty-five years out. His com- emy in 2001. ones in the United Kingdom and here, were withdrawn and contemplative. He missioners found this frustrating. They wrote that the time had come for a new said, it is not going to make any difference eslie has reminded me that my first ap- L paradigm, a new kind of university. The what we think if we are not reelected, Mr. pearance at an Academy event like this was time had come for universities that were Mayor. He said, no, but keep your eye on with Lee Bollinger. We have been friends “in and of the city.” I first read Gallatin’s since 1979, and we share a lot in common. words in 2001 after I had been named He was named president of Columbia Uni- Even in this time when all president of NYU. That was about four versity the same month I was named presi- months before 9/11, just before we crossed kinds of industries move, the dent of NYU. We both clerked for the same that critical threshold in the story of our judge, and we were law school deans con- city and our country and the world. When city’s universities stay and they temporaneously. The Academy meeting was I read those words, NYU suddenly made held in a club uptown where NYU’s greatest anchor. We depend on our sense to me in a way it hadn’t until that nineteenth-century president, Henry Mc- point. Being in the law school, in this room, cities, and they depend on us Cracken, had given a speech at the close of in this building, was like being in a parish; his presidency, proposing that NYU and it was a place, like the bar in Cheers, where in a deep way. Columbia merge into one great university. everybody knew your name and everybody I remember pointing out the comparison knew everybody else’s name. NYU, viewed it. In preparing for the retreat, I began to between Lee and McCracken and me and from here, seemed abstract to me, cacoph- talk to my colleagues here at NYU–be- Columbia’s then president. McCracken was onous and complex. But once I read Gal- cause really all I am is their mouthpiece– an eloquent, erudite scholar, like Lee, and latin’s phrase, I came to understand that about what had made the city great and the president of Columbia, Seth Low, was a what he and his successors–down to the what would make the city great fifty years shipbuilder from Brooklyn who bought the great John Brademas, whose arrival in 1981 from now. They taught me that what made Columbia presidency for a million dollars. represented a pivotal point in the history cities great in the twentieth century–at He went on to become the mayor of New of this university–had done was to create least, what made New York City great–was York, and Low Library is named for him. I a university without gates. Most of NYU’s FIRE: Finance, Insurance, Real Estate. told the Academy that night, as they sat lis- buildings are not next to each other. Once tening to my heavy Brooklyn accent, “Be- So, I had a concept of what was needed. you leave Washington Square–and more fore you dismiss guys from Brooklyn, you But although I knew FIRE would be neces- than a hundred of our buildings are not in should know that Seth Low invented the sary in 2050, I also knew it would not be the square–you can exit most of our build- paid sabbatical.”

Bulletin of the American Academy, Spring 2011 5 Academy Meetings sufficient. Something else was happening. I could feel it as we tried to attract talent to the university. What does talent want? It wants other talent–but not just similar talent. A talented geologist wants a critical mass of other talented geologists, but he or she also wants to be able to go to a good play, hear a good symphony, and have a good conversation over dinner with a phi- losopher, and he or she wants the same for his or her family. I had to come up with a name for this concept. But even as I was in the car driving over to Staten Island for the retreat, I still hadn’t found it. In shar- ing with the Academy how I finally came What is going to be needed to make New York City great in 2050 is not just FIRE–finance, insurance, and real estate–but also ICE–the intellectual, the cultural, the educational. up with a catchy acronym to go with FIRE, I hope my membership isn’t revoked. Peo- ple think the label came from the Frost poem or the Valhalla myth, because I am an intellectual, after all. The fact of the matter is that my wife was the president of the Charles Revson Foundation, and I knew through Lisa that Revson’s biogra- phy, named for his great lipstick, was Fire and Ice. So, I went to the retreat, and I said, “What’s going to be needed in 2050 is not just FIRE–finance, insurance, and real es- tate–but also ICE–the intellectual, the cul- Image © NYU Photo Bureau: Johnson tural, the educational.” Then I discovered New York University Daniel Patrick Moynihan’s great phrase, that if you wanted to build a great city, you should create two great universities and If you asked me to name my four heroes them to a cup of coffee so I can learn more wait 200 years. Today, of course, things hap- among the leaders of higher education in from them. Each of the three has, in dif- pen much more quickly. But even in this this country, the three people on our panel ferent ways, helped me be better both as a time when all kinds of industries move, the would be three of the four. These are three person in the world and as a president. city’s universities stay and they anchor. We of the wisest, most extraordinary, most depend on our cities, and they depend on virtuous, and most visionary people that I us in a deep way. know. When we get together at the AAU each year, I always try to make sure I have a chance to hug them, and, if I can, I entice

6 Bulletin of the American Academy, Spring 2011 The University and the City

Universities were located in small towns tors and contributed to the bias for locat- at a distance from cities for many reasons. ing colleges in rural settings. An 1876 pop- In most cases, something of a bidding war ular guide to colleges observed, “If Yale took place, with towns offering up land or were located in Williamstown, Harvard at money or a building associated with an Hanover, Columbia at Ithaca, the moral existing school. The location of the uni- character of their students would be ele- versity went to the town that bid the most. vated in as great a degree as the natural Small towns, hoping to become cities, scenery of their localities would be increased sought to attract colleges just as they in beauty.”1 Crowded, noisy, unclean, and sought to attract railroads, recognizing corrupt, cities were considered antitheti- the synergy both could provide for growth. cal to scholarly thought; they were filled State legislatures, as political bodies, also with distractions and unsuitable places for brokered deals to distribute the public young people. Some state legislatures ex- goods throughout their states–the peni- plicitly forbade the locating of public uni- tentiary went here, the insane asylum (as versities in cities.2 In their removal from state mental hospitals were then called) urban life, universities cultivated the im- went there, and the state university some- age of an “ivory tower,” remote from the where else. gritty realities of the world. For students drawn largely from the middle class, the Universities were located in four years of college were to be a kind of Robert M. Berdahl small towns at a distance “time out” from ordinary cares and work Robert M. Berdahl is President of the Associa- –a time for learning and maturity, to be tion of American Universities. He is the former from cities for many reasons. sure, but also a relatively carefree period Chancellor of the University of California, of life. Much of the generational conflict Berkeley, and also served as President of the In most cases, something of a of the 1960s, I believe, resulted from dif- University of Texas at Austin. He was elected bidding war took place, with fering perspectives of what the college a Fellow of the American Academy in 1999. years should be about: the older genera- towns offering up land or tion saw the college years as a youthful es- Throughout much of their history, until cape from the world; the younger genera- relatively recently, most American univer- money or a building associ- tion, which had come of age during the sities have not been closely linked with ated with an existing school. civil rights movement and the antiwar the development of urban America. The movement, believed they should engage the world as adults and be treated as adults. settlement and growth of the cites along The passage of the Morrill Act establish- The in loco parentis role of universities the eastern seaboard brought with it the ing land-grant universities in the states, had to be set aside. founding of some of the earliest universi- with its emphasis on “agriculture and the ties in the colonial cities–King’s College mechanic arts,” also encouraged the Neither the public universities built in the (Columbia) in New York City; the Acad- placement of land-grant universities in ru- nineteenth century nor the older private emy of Philadelphia (Penn) in Philadel- ral locations, where land for experimental elite universities effectively served Ameri- phia; and, in the early years of the repub- agricultural plots was readily available. In can cities. Columbia and Penn, which had lic, NYU, founded by Albert Gallatin. But a number of states, cities made an effort to moved away from downtown centers in most early colleges were located in small insist that the mechanical arts should pro- the early nineteenth century, were once towns, perhaps reflecting the model of vide the foundation for the universities again enveloped by their cities in the early Oxford and Cambridge, after which the and that the university should therefore twentieth century. But they were not pre- location of Harvard was named. As the na- be located close to the industrial centers, dominantly local institutions. After World tion spread westward, the state universi- but the cities rarely prevailed. Of the early ties, like nearly all of the new liberal arts land-grant universities, only Minnesota 1 Frederick Rudolf, The American College and Univer- colleges, were located in small towns re- located its university in the major popula- sity: A History (New York: Vintage, 1962), 93. mote from the major cities–Ann Arbor, tion center of the state. 2 Margaret P. O’Mara, “Beyond Town and Gown: not Detroit; Champaign-Urbana, not University Economic Engagement and the Legacy Chicago; Bloomington, not Indianapolis; But the location of universities in small of the Urban Crisis,” Journal of Technology Transfer, Columbia, not St. Louis. The list could go towns also reflected a basic American, Jef- published electronically July 30, 2010, doi:10.1007/ on, including Berkeley rather than Oak- fersonian antipathy toward cities. Jeffer- s10961-010-9185-4. See also David Riesman, “The son’s view of cities as “pestilential to the Urban University,” The Massachusetts Review 8 (3) land or San Francisco. (Summer 1967): 476–486; and Maurice Berube, morals, the health, and the liberties of The Urban University in America (Westport, Conn.: man” was widely shared by early educa- Greenwood Press, 1978).

Bulletin of the American Academy, Spring 2011 7 Academy Meetings

The location of universities in ties to recognize how little they had its architecture, its space use, its cultural served the cities and their minority popu- programs and recreational facilities.” He small towns also reflected a lation; the arrival of the baby-boomer saw the urban-grant university as “a new generation at college age led to demand model, eventually affecting all the others.”7 basic American, Jeffersonian for broader access; the Great Society His vision was never realized. However, antipathy toward cities. expanded federal support for college at- perhaps less systematically than under tendance; Sputnik spurred investment in Kerr’s vision, urban universities did con- War II, for example, Penn effectively closed research; and the National Defense Edu- tinue to develop, with serving the needs of itself off from the city surrounding it, mak- cation Act added funding for graduate urban populations a central part of their ing it, in the words of its plan, “a commu- education. Other federal legislation also missions. nity of scholars residing in and around a helped build a linkage between universi- campus closed off to vehicular traffic.”3 ties and cities. The National Housing Act A coalescence of social forces Those colleges and universities founded of 1959 included a section (Section 112) primarily to serve the urban population that provided two to three dollars of ur- led to the expansion of univer- were largely sectarian, predominantly es- ban renewal money to cities for every dol- sities and the construction of tablished by the Catholic Church, intended lar an educational institution spent in ac- to serve the heavily Catholic immigrant quiring land or structures adjacent to an branch campuses in the urban population of cities.4 In 1963, Kermit C. urban renewal project. (The AAU actively 6 Parsons, a professor of urban planning at worked to secure passage of this section.) centers of many states. Cornell, described the relationship be- This act enabled the expansion of NYU, The importance of university research to tween most universities and cities in the Fordham, Drexel, Temple, Penn, and Pitt the welfare of the nation became clear following way: and facilitated contributions to urban re- newal by Columbia, MIT, Chicago, and during World War II. In his seminal re- The strategy of the universities has been Yale, among others. port, Science, The Endless Frontier, presiden- characterized either by retreat before the tial advisor Vannevar Bush argued in 1945 advance of the city or by voluntary isola- Crowded, noisy, unclean, and for federal investment in university-based tion from it. The tactics of the universi- research as the basis for the future health, ties and their scholars have been limited corrupt, cities were considered security, and economic growth of the na- to occasional sallies from their ivory tow- tion. But scientific innovation for eco- ers to throw fine intellectual dust, verbal antithetical to scholarly nomic development was rarely used to pebbles, and occasionally a useful critical thought; they were filled with justify the building of urban universities rock at the follies of the cities. For their in American cities in the 1960s. The pri- part, city officials and most citizens hard- distractions and unsuitable mary justification for investment in uni- ly knew that the universities were there. versities was advancing the public good by They did little or nothing to preserve and places for young people. building human capacity, especially among advance educational institutions when the urban underclass. To the extent that they were threatened by physical and so- The expansion of higher education during urban universities were considered cata- cial change in the city.5 the 1960s produced bold new ideas for the lysts for economic development, it was reconceptualization of universities. In 1967, not through innovation and the creation Not until the surge of enrollments and the Clark Kerr, who had designed the expan- of new technology but as agents of urban demand for access to higher education in sion of the University of California system, renewal, restoring and building neighbor- the 1960s did universities begin to turn proposed the creation of 67 federal “urban- hoods. It was less that universities created their attention to the needs of the urban grant” universities, “one for each city of new jobs than that they provided jobs. population. A coalescence of social forces over a quarter million and several for the Many became the largest employers in led to the expansion of universities and very large cities.” He proposed that these their cities and counties. the construction of branch campuses in urban-grant universities be funded by fed- the urban centers of many states. The civil eral grants, submitted by both public and With the emergence of high-technology rights efforts of the 1960s forced universi- private institutions, and that they broaden companies in the 1970s, some spawned di- access to underserved urban populations. rectly by universities and all dependent on Kerr proposed that the urban-grant univer- universities for ideas and graduates, uni- 3 Judith Rodin, “The 21st Century Urban Univer- versities themselves helped produce the sity: New Roles for Practice and Research,” Journal sity should not only be concerned with the of the American Planning Association 71 (3) (Summer “mainstreams of intellectual thought and 2005): 238. discovery” but should also be concerned 7 Clark Kerr, The Urban-Grant University: A Model 4 O’Mara, “Beyond Town and Gown.” with “the urban environment in its totality, for the Future, lecture given to Centennial Meeting 5 Kermit C. Parsons, “Universities and Cities: The of the City College Chapter of Phi Beta Kappa, Terms of the Truce between Them,” The Journal of October 18, 1967 (New York: The City College, Higher Education 34 (4) (April 1963): 205. 6 Ibid., 205–207. 1968).

8 Bulletin of the American Academy, Spring 2011 The University and the City

With the emergence of high- not originally established in urban centers flourish unless the neighborhood flour- became centers of economic growth and ished, so she launched the West Philadel- technology companies in the magnets for metropolitan growth. phia Initiatives.8 Penn’s short-term strat- egy called for improving the appearance 1970s, some spawned directly While these are not typically urban uni- of the neighborhood, quickly addressing by universities and all depen- versities, their metropolitan settings small crimes, and improving sanitation. A caused them increasingly to resemble re- long-term strategy had five parts: making dent on universities for ideas cently developed urban universities with the neighborhood clean, safe, and attrac- their concentrations of educated people tive; providing diverse, high-quality hous- and graduates, universities and their contributions to the social and ing options; encouraging retail develop- themselves helped produce the cultural life of their region. Inevitably, like ment by attracting shops and restaurants; urban universities, these research-inten- spurring economic development by di- growth of metropolitan cen- sive universities also became more fre- recting university contracts to local busi- quently embroiled in conflicts with their nesses; and improving the public schools. ters, attracting industry and local communities. Perceived as wealthy, In addition, the university committed not an educated population. somewhat insular and privileged, and often to expand into residential neighborhoods, immune from local jurisdictions, their tax- not to act unilaterally without community exempt status removing ever-larger portions involvement, and to leverage its own growth of metropolitan centers, attracting of the landscape from the tax rolls, univer- short-term investments to secure long- industry and an educated population. The sities have often found themselves at odds term investments from the public and passage of the Bayh-Dole Act in 1980, with the very communities they have helped private sectors. granting universities the rights to inven- develop. tions arising from federally funded re- search, led to an explosive growth in uni- The growing connections between univer- The deterioration of cities and versities’ collaboration with industry in sities and industry after Bayh-Dole and the decline of public education the transfer of scientific discoveries into the emphasis on universities as agents of commercial applications, strengthening economic development led universities to now presented problems that the claim that universities were major give greater emphasis to science, engi- agents in the economic development of neering, and applied disciplines. Profes- universities felt they needed to their regions. Some concentrations of sional schools, especially engineering, address. This has produced technology firms developed because of law, and business, grew in size and influ- resident universities, with the impact of ence within universities and brought with the closest linkage between Harvard and MIT on Route 128 near Boston them a problem-solving mentality. Among being a prime example. Other metropoli- the practical problems to be solved were universities and their cities in tan areas grew out of more rural settings those of the cities and the neighborhoods the history of American because of the proximity of major univer- of universities. The deterioration of cities sities. Stanford, for example, still refers and the decline of public education now higher education. to its campus as “the farm,” but it is no presented problems that universities felt longer a bucolic rural setting because of they needed to address. This has produced Rodin recognized that success depended the rapid growth of the metropolitan area the closest linkage between universities on embedding relations with the city in and its scores of high-technology compa- and their cities in the history of American the mission and tasks of the university. nies in Silicon Valley. While nothing on higher education. She saw that these relations needed to be the scale of Silicon Valley happened else- For example, the University of Pennsylva- “holistic” interactions engendering trust where, a similar symbiosis between re- nia, though located in Philadelphia, began by both parties and that improvement search universities and tech firms devel- to insulate itself from the city after World would require patience and a long-term oped in the Research Triangle in North War II, creating, in the words of former commitment. Over the decade of her Carolina and in Austin, Texas. Likewise, Penn President Judith Rodin, an “enclosed tenure, and with a continuing commit- UC the University of California ( ) stimu- perimeter, fostering a fortress-like appear- ment by the board of trustees under lated the growth of metropolitan areas ance to passersby while providing the de- Rodin’s successor, Amy Gutmann, Penn around its new campuses; one in four U.S. sired academic sanctuary for the faculty has worked to achieve each of the five biotech companies is located within 35 and students within.” By 1994, when Rodin miles of a UC campus, and one in three assumed the presidency, the Penn neigh- 8 For a description of the West Philadelphia Initia- California biotech firms (and one in six uc borhood had deteriorated markedly, with tives, see Judith Rodin, The University and Urban nationwide) was founded by scientists. high levels of poverty and crime and over- Revival: Out of the Ivory Tower and into the Streets Thus, increasingly, universities that were (Philadelphia: University of Pennsylvania Press, crowded and inadequate schools. Rodin 2007); and Rodin, “The 21st Century Urban Uni- concluded that the university could not versity,” 237–249.

Bulletin of the American Academy, Spring 2011 9 Academy Meetings goals of the West Philadelphia Initiatives. sive plan for neighborhood revitalization. was New Orleans’s largest private em- The initiatives have been remarkably suc- A federal grant supporting job training, ployer. As such, we viewed the institution cessful. They reduced neighborhood housing improvements, and the improve- as an economic catalyst and a local re- crime by 31 percent, halted and reversed ment of local elementary schools enabled source for research and service-learning the residential exodus, attracted new the implementation of the neighborhood programs. However, although we’d been shops and restaurants, and spurred new plan. Yale opened the campus to local in New Orleans for 175 years, we were not business development. Because they are quite of New Orleans.” The Cowens de- embedded in the fabric of the university, American universities have scribe the details of Tulane’s engagement: the initiatives have contributed to the a new Center for Public Service developed academic mission of Penn, including the discovered that they are essen- 300 service-learning courses and estab- creation of the University of Pennsylvania lished relationships with more than 100 Institute for Urban Research. The chal- tial elements in the ecology of community-based organizations. Scott lenges of the city became a central research cities and that they will ulti- Cowen chairs a committee to develop a project for the university, engaging nearly plan to rebuild and transform New Or- all of the disciplines and professional mately flourish only if their leans’s schools, and the university is ac- schools in the complexities of improving tively involved in school reform. The urban life. cities flourish. School of Medicine has built a community health care system with eight neighbor- Richard Levin, who became president of schools with summer sports programs hood clinics that provide all citizens ac- Yale in 1993, has a similar story to tell. Yale and a citywide science fair. The university cess to primary care. The School of Archi- historically had little systematic engage- made major investments to develop down- tecture has led the Tulane City Center ment with the city of New Haven. Levin town retail shops, with the requirement initiative, matching architecture students observed, “Outsiders have long regarded that they remain open evenings to give life and faculty with local groups to provide the presence of Yale as one of the city’s to the street. To alter the image of the city, design consultations on more than fifty major assets, but, except for episodic en- Yale inaugurated an annual summer Festi- projects to rebuild and enhance the envi- gagement, the University’s contributions val of Arts and Ideas, which has drawn or- ronmental quality of urban life. to the community did not derive from an ganizations such as the Royal Shakespeare active, conscious strategy of urban citi- The Cowens conclude, “Our commitment 9 Company and the Metropolitan Opera to zenship.” He recognized the need for a New Haven. In November 2010, Yale an- to the revival of New Orleans had to ex- comprehensive strategy to employ Yale’s nounced that it will provide to all New tend beyond areas that impacted Tulane assets to improve the community. Yale’s Haven high school freshmen who main- as an institution, such as housing, health strategy involved four areas of focus: en- tain a 3.0 grade-point average until gradu- care, and public schools. To truly invest couraging economic development, espe- ation a full-tuition scholarship to any state in the city’s renewal and instill in our stu- cially the transfer of technology from the college or university in Connecticut. dents a passion for social change . . . this university to local enterprises; strength- commitment had to be a strategic priority ening neighborhoods by creating incen- A third example is that of Tulane Univer- for the entire university and an integral tives for Yale employees to live in the sity, which has been an essential element part of our daily activities.” community; increasing the safety and ap- in the rebuilding of New Orleans after pearance of the downtown; and changing Hurricane Katrina. In a recent article, Tu- These are but three examples. Dozens the prevailing perceptions of the city of lane’s president, Scott Cowen, and his more could be offered by universities all New Haven as a city in decline. daughter, Amanda Cowen, describe how over the country. Over the last two decades, Tulane seized upon the crisis of Katrina, American universities have been more Yale’s Homebuyer program, which subsi- which threatened the very survival of the completely engaged in urban life than ever dized the purchase of homes in New Haven university, to restructure the university before in their history. They have discov- by Yale employees, was one of the initial, and the university’s relationship to the ered that they are essential elements in the visible projects representing Yale’s invest- city.10 They write, “Although Tulane is a ecology of cities and that they will ulti- ment in the city. Yale mobilized faculty global institution, in confronting the real- mately flourish only if their cities flourish. and students from its schools of architec- ities of a post–Katrina New Orleans, we They have learned that leadership from ture, law, and management to help neigh- learned the true extent of our local inter- the top is required but that the entire uni- borhood residents develop a comprehen- dependencies. Before the storm, Tulane versity must in some measure be involved and that their efforts can enhance their curriculum. They have discovered that en- gagement requires a long-term commit- 9 Richard C. Levin, “Universities and Cities: The 10 Scott S. Cowen and Amanda P. Cowen, “Innova- View from New Haven,” Inaugural Colloquium, tion amidst Crisis: Tulane University’s Strategic ment. Perhaps it is time to dispose of the Case Western Reserve University, January 30, 2003. Transformation,” Innovations 5 (3) (Summer 2010): metaphor of the ivory tower. 3–11.

10 Bulletin of the American Academy, Spring 2011 The University and the City

who traveled to the summit, each of whom In 2005, we embraced eco- had to file a story answering the question, “Why Pittsburgh?” The answer is that nomic development as one of Pittsburgh had made a notable recovery from the social and economic devastation Carnegie Mellon’s strategic of less than thirty years before. priorities. The recovery was the result of a lot of hard work by a lot of Pittsburghers and Something else has happened, especially in Pittsburgh institutions, including the uni- the last ten years. Before 1997, a year before versities, which played an important role. I came to Carnegie Mellon, the university Pittsburgh is unusual among midsize was spinning out about two companies per American cities in having two major re- year–not especially significant or note- search universities. Several areas that are worthy. We made an effort to increase that much bigger than Pittsburgh–Boston/ number and got it to about five companies Cambridge, New York, Atlanta, Chicago, per year. Then, in 2005, we did something Los Angeles, and the San Francisco Bay unique for a private research university. Area–have multiple research universities, We embraced economic development as but Pittsburgh is unique for its size. In ad- one of our strategic priorities. We did so for dition, Pittsburgh’s two research universi- two reasons: on the one hand, we wanted Jared L. Cohon ties, Carnegie Mellon and the University to be a good citizen; on the other hand, it of Pittsburgh, are literally right next door was in our own self-interest to do so. To Jared L. Cohon is President of Carnegie Mellon to each other, unlike any other pair of ma- compete with other universities for the University. He served as Dean of the School of jor research universities. Over the last faculty and students we want, we need a Forestry and Environmental Studies at Yale vibrant technology sector in Pittsburgh. University and was Associate Dean of Engi- Carnegie Mellon and the Anything that contributes to the vibrancy neering and Vice Provost for Research at Johns of Pittsburgh is therefore good for Carnegie Hopkins University. University of Pittsburgh also Mellon. So we adopted economic develop- represent a case of a city’s ment as one of our priorities. We looked at Carnegie Mellon and the University of our technology transfer policy and changed Pittsburgh also represent a case of a city’s universities turning their at- it radically. Our provost, Mark Kamlet, universities turning their attention, explic- made a brilliant observation, which seems itly and intentionally, to the economic de- tention to the economic devel- simple in retrospect (most brilliant obser- velopment and the welfare of the city in vations are). He recognized that the way which they are located. Pittsburgh’s story opment and the welfare of the the process worked then, and still works at is important–certainly to Pittsburghers but city in which they are located. most other universities, was broken and also to the country and to the world. In a didn’t make any sense. In most places the span of eighteen months from 1980 to 1982, twenty years, we have worked hard to process works like this: you, a faculty mem- Pittsburgh lost 120,000 jobs when almost leverage that proximity. In 1982, after ber, invent something; then you present all of the steel mills in the city closed. Pitts- Pittsburgh lost those 120,000 jobs, the yourself to the technology transfer office burgh is not a large city. In 1980, the city had two universities had total sponsored re- and disclose your invention. You say, “I’d about 500,000 people, and the metropoli- search of about $100 million. Today, like to start a company.” The tech transfer tan area had only about 2 million. Losing twenty-eight years later, our sponsored office says, “Great. Let’s negotiate.” Some 120,000 jobs in such a short period of time research has increased by a factor of ten to weeks or months later (or maybe never), is social and economic devastation. That $1 billion. The AAU estimates that every you reach an agreement, and you go off Pittsburgh, less than thirty years later, would million dollars of sponsored research pro- and start the company. Provost Kamlet ob- host the G-20 Summit (as it did in Septem- duces twenty-nine jobs (that’s direct jobs served that the minute a university and its ber 2009) is amazing. In fact, no one was plus the multiplier effect). So, a billion faculty start negotiating with each other, more surprised than Pittsburgh. The story dollars is about 30,000 jobs. In a city the something is lost. No matter how it comes goes that when President Obama’s press size of Pittsburgh, that is a lot of jobs. The out, the message conveyed to the faculty is secretary announced that Pittsburgh would University of Pittsburgh Medical Center that the university’s interest and the fac- host the G-20, some in the pressroom (a separately incorporated entity from the ulty’s interest are not aligned. How dumb laughed, “Pittsburgh? You’ve got to be University of Pittsburgh, but their num- is that? So we decided to get rid of the ne- kidding.” The real gift of hosting the G-20 bers are included in that billion) is now gotiation. And thus was born the policy we turned out to be the 2,500 or so journalists the largest employer by far in the city. call “5 percent and go in peace.” Now when the faculty member says, “I want to start a

Bulletin of the American Academy, Spring 2011 11 Academy Meetings company,” we say, “Great. Sign here. Give Pittsburgh. The building has succeeded to Another of our initiatives was us a 5 percent equity stake, which we can a degree we never thought possible. With- protect from dilution only by putting in in a year, it was filled with Apple, Intel, and to construct a building on our more money. Now go in peace.” We now Google (the only building in the world generate ten to fifteen start-ups a year, and with those three in it). campus specifically to entice we are second in the country in number of large technology companies start-ups per million dollars of sponsored Google has since expanded its presence research. Not only that, the faculty are in Pittsburgh, recently dedicating new to set up engineering and re- thrilled, they are happy, to our great shock. offices in a part of the city called East Lib- A couple of years ago we had in an advisory erty. Imagine the most blighted area of search centers in Pittsburgh. board in computer science. At the end, the New York City–if any such areas are left!–and you have an idea of East Lib- board reported, “Your faculty are very hap- of Pittsburgh called Oakland. If Oakland erty. For former Pittsburghers to hear py about your tech transfer policy.” The were a separately incorporated city, it that “Google is in East Liberty” is a total provost and I looked at each other and would be the third largest central business shock. Google’s presence marks a phe- started to laugh. We just couldn’t believe it. district in the state of Pennsylvania. It is nomenal success and means that Pitts- Our faculty are delighted, and we are mak- extremely active. Two years ago, at the burgh not only has a vital and vibrant ing a real contribution to Pittsburgh. height of the recession, the vacancy rate economy; it’s cool, too. for office space in Oakland was zero. The Another of our initiatives was to construct leaders of the universities have been ac- a building on our campus specifically to Carnegie Mellon, the University of Pitts- tive as leaders in the community with re- entice large technology companies to set burgh, and University of Pittsburgh Med- gard to economic development. My prede- up engineering and research centers in ical Center are located in a neighborhood

Carnegie Mellon University

12 Bulletin of the American Academy, Spring 2011 The University and the City

Carnegie Mellon University’s Hammerschlag Hall at night cessor, Robert Mehrabian, spent countless To compete with other uni- the city of Pittsburgh, is understandable hours–he had something like 150 com- from the sort of simpleminded calculus of munity meetings around the metropolitan versities for the faculty and “I’ve got a budget deficit, I’ve got a bunch area–trying to convince Pittsburghers of rich kids coming to Carnegie Mellon, that innovation and technology-based de- students we want, we need a what’s 1 percent?” He was quoted as saying velopment were the keys to Pittsburgh’s vibrant technology sector in college students are a burden on the city of future. He provided outstanding leader- Pittsburgh. Fortunately, the mayor even- ship, and it had a big impact. Pittsburgh. tually withdrew the proposal, but the bud- get challenges of the city are a long-term That is the glass-half-full part of the story. problem. The half-empty part is that Pittsburgh still eroded as a result of the exodus of people struggles in a lot of ways. The population from the city. Pittsburgh is broke, which Despite the challenges, though, some of of the city is 350,000, half the size it was creates a lot of the problems. The univer- which are unique to Pittsburgh, the story fifty years ago. Pittsburgh is the only ma- sities might be the major employers, but of the past thirty years is a great story; it jor city in the United States to have lost we are viewed as greedy and not shoulder- shows the impact that the modern re- population every decade since World War ing our fair share because we are tax-exempt. search university can have–and has had– II. The decline has finally bottomed out, Our young mayor–at 26 he was the young- on one American city. but the population has not yet started to est mayor in America when he assumed grow. The suburbs around the city have office–who is otherwise dynamic and in- grown, though, so the metropolitan area teresting, proposed a tuition tax two days is about the same size as thirty years ago. after his election last November. His idea, a But the city tax base has been dramatically 1 percent tax on tuition on every student in

Bulletin of the American Academy, Spring 2011 13 Academy Meetings

about the civic role that accompanies the In recent years, we have seen position. When I accepted the presidency at Brown, I really thought I would be be- attempts by the city council, hind these wonderful ivy walls, dealing with faculty and students, and it never oc- the mayor’s office, and the curred to me that the city was going to be state legislature to impose a major part of what I had to deal with. taxes on private colleges. But I should have guessed. The day I ar- rived in Providence to make a speech upon This issue has strained our re- my appointment, people along the way were giving me the thumbs-up as the car lationship with policy-makers was driving up the hill. I thought, what do and, to some extent, with the they know? I quickly learned, however, that a major part of my position involved public. the city. The relationship between Brown and the city of Providence is longstanding. million in economic output in 2009. That We are older than our state and city, which is a big deal for our small state. Brown, can be particularly awkward when the which employs 4,455 people, is the sixth matter of taxes comes up. When the city largest private employer in Rhode Island Ruth J. Simmons threatens to tax us, we bring out our char- and the second largest private employer in ter from the King of England. For some Ruth J. Simmons is President of Brown Univer- Providence. We have a major impact on reason, they don’t like that very much. sity and Professor in the Departments of Com- the economy of Rhode Island, which is parative Literature and Africana Studies. She both good and fraught. served as President of Smith College from 1995 One of the difficulties one It is fraught because inasmuch as we are a to 2001. She was elected a Fellow of the Ameri- major player in the state of Rhode Island, can Academy in 1997. encounters as president of a that very visibility leads to more and more place like Brown is that our demands being placed on us, particularly I had the opportunity, for part of my ca- when problems arise. But we believe that reer, to work at the University of Southern relationship with our city and we are playing an honorable role. For ex- USC California ( ). According to an apoc- ample, during the recent downturn, we USC state begins with a dilemma: ryphal story about and the Watts ri- proceeded with capital projects precisely ots, during those perilous moments the vi- Why can’t you admit more because we didn’t want to withdraw those USC olence went right up to and stopped. projects and have the jobs disappear as a The story is all about the relationship that local students? consequence. Knowing the condition of existed between the African American our city and state, we wanted to make sure USC community and . Now, that relation- Since its founding, Brown has been work- we paid attention to the city and its eco- ship didn’t have a lot to do with overt ef- ing closely with its neighbors, and that nomic problems even as we were trying to USC forts by ; it had more to do with hav- continues today. Our alumni have been address our own internal issues with the ing a great football team, recruiting from leaders in the community for decades. budget. the community, and the fact that USC does Our current governor, our governor-elect, a lot of outreach in Southern California. our lieutenant governor, our attorney gen- In 2009, Brown was one of the largest in- dividual taxpayers in the city, paying $2.2 USC eral, the mayor of Providence, and our At the time, was able to admit a lot of newly elected congressman might not al- million in property tax. We paid another students from the area. One of the difficul- ways share the same political views, but $1.1 million in voluntary payments to ties one encounters as president of a place they do share the fact that they are all Providence. These figures are important, like Brown is that our relationship with Brown alums. We have the opportunity to especially given the issues that the city our city and state begins with a dilemma. work with them to identify ways to stimu- and state are facing. Rhode Island has one As a highly selective university, we are not late the economy and enhance the quality of the highest unemployment rates in the able to have the same outreach that many of life in our small state, where we have a country. In January 2010, Providence had universities can have. Thus, the relation- large impact. an unemployment rate of 13.9 percent. ship begins with a troubled question: Why Rhode Island’s overall rate was slightly can’t you admit more local students? A recent analysis conducted by an inde- lower at 13.4 percent, and today they are pendent consultant estimated that Brown A second dilemma is that when you be- both in the 11 percent range. Since 2002, directly and indirectly accounted for come president of a university–at least the city has lost 18,000 private-sector jobs, nearly 8,200 Rhode Island jobs and $660 this was the case for me–nobody tells you

14 Bulletin of the American Academy, Spring 2011 The University and the City Mike Cohea Brown University

We have been working closely In recent years, we have seen attempts by nomic advisor, he works with other insti- the city council, the mayor’s office, and tutions and businesses and civic and politi- with a number of partners in the state legislature to impose taxes on cal leaders to build support for the goals of private colleges. This issue has strained the knowledge-based economy and to de- the public, private, and non- our relationship with policy-makers and, velop a plan for achieving those goals. to some extent, with the public. This is a profit sectors to jumpstart a Our focus for this undertaking is an area source of great pain to all of us at Brown of the city known as the Jewelry District, because we are working as hard as we can knowledge-based sector that formerly the world capital of jewelry man- to help the city and state, but the demands ufacturing. This district, once dying, is builds upon the research done just keep coming. The efforts to undo the now in the process of being transformed not-for-profit status of the university are by institutions like Brown, our into a locus of bioengineering, life sci- relentless. ences, health care, and green technology hospital partners, the Univer- But we are trying to help expand the city’s research. Brown is considered the anchor sity of Rhode Island, Rhode tax base. We have been working closely for this enterprise. We made a decision to with a number of partners in the public, locate our laboratories for molecular med- Island School of Design, and private, and nonprofit sectors to jumpstart icine there in 2003, and subsequently de- a knowledge-based sector that builds on cided to put more of this kind of activity others. the research done by institutions like Brown, in the area. We are now working on a our hospital partners, the University of medical school building there, and we while the education, health care, and so- Rhode Island, Rhode Island School of purchased ten other buildings in the area cial service sectors created 13,000 new Design, and others. I appointed a senior in order to spur development. officer at Brown to serve as an economic jobs. Without the not-for-profits, Rhode We view the occupancy of space in this development champion for the effort. In Island would have been in a much worse district as a contribution to the health of state. addition to his work as planner and eco-

Bulletin of the American Academy, Spring 2011 15 Academy Meetings

As an educational institution, We have also started a program to enable some of that attitude to what we do in students to get a master’s degree in urban higher education. Schools of education we can also spend a lot of education at Brown tuition-free, provided are off to the side, often not supported at that they commit to work in the public the requisite level, often not challenged to time thinking about what we schools in Providence. That, too, has been be a full part of the community of higher should be doing for the chil- a successful effort. education. That is a problem. When it comes to training teachers, when it comes dren in our area. Despite our efforts, every year we see a to establishing the importance of this new proposal to tax colleges and universi- community of educators, what happens ties because the public is outraged that we in our world of higher education has a Providence. But sometimes local officials are not doing enough. Policy-makers and resist the idea of our taking more space tremendously important effect on what the public never seem to understand fully happens. off the tax rolls, even though we are pay- the contribution we are making to our ing taxes on a declining basis as the prop- cities. We worry a lot about this at Brown. Question erties come off the tax rolls. Still, they ar- The question I see before us is, what can gue that we are gobbling up space, this we do to persuade our public that we are At the beginning of the session we were despite the fact that the vacancies in Prov- doing all that is appropriate to help our talking about creating symbiotic relation- idence today are significant. The market cities? ships between communities and academic in downtown Providence has approxi- institutions. But NYU’s actions in acquir- mately 1.35 million square feet of vacant Question ing more property and building more office space. The total vacancy rate is buildings seem destructive rather than about 21.5 percent. What is the proper role of higher educa- creative. Because of the construction, tion in k–12 education? playgrounds in communities are being Universities can also take a leadership role destroyed, for example. What is your take Ruth Simmons in other kinds of endeavors in their cities. on that, President Sexton? We talk a lot about efforts such as building The overarching obligation of higher edu- a knowledge-based economy, but univer- John Sexton cation is to stop separating ourselves so sities represent so much more, particu- rigidly from k–12. When colleges became larly in the areas of humanistic thought. We are all frustrated by our inability to elite, k–12 educators became second- Another extremely important thing we communicate adequately the extraordi- class educators, who do not have the same can do is address standards of citizenship nary efforts the university community has sense of pride, the same sense of lofty in our country. made to embrace and enhance our cities. goals, the same sense of satisfaction with Our families live in these communities; As an educational institution, we can also their jobs, and so on. our children play in these playgrounds. spend a lot of time thinking about what NYU in particular is ecosystemic with We ought to try to eradicate that line and we should be doing for the children in our both the neighborhood and the city in bring teachers into the realm that we in- area. Brown recently completed a study of which we live. We have taken great care in habit. As long as we continue to catego- the history of the region, the history of enhancing the community, trying to do so rize k–12 teaching as “less than”–for ex- Brown, and particularly the history of with balance, even as we seek to address ample, by calling ourselves “professors,” slavery in the area. One result of that the desperate need for space, both for our while they are only “teachers”–we will study was that our campus recommended university and for research universities in not be able to solve the problem of the a series of things that we ought to be do- general. That need is growing because quality of instruction at the k–12 level. ing in education. knowledge itself expands exponentially decade by decade. Forty years ago, the So we committed to building a $10 mil- The overarching obligation of field of genomics did not exist. Today it lion endowment for the children of Provi- higher education is to stop does, and NYU recently built a genomics dence to supplement the educational pro- building on Waverly Place to accommo- grams in the Providence public schools. separating ourselves so rigidly date the professors, students, and post- With our first round of grants, we were docs involved in this field. NYU has a long- able to keep music programs in the from K–12. term plan that anticipates the need for an schools, supplement mathematics and additional 6 million square feet of space One measure of the seriousness of the science education, and do other things over the next twenty years. That sounds problem is that so many of our students– that the schools, at the current level of like a lot, but it is only about 0.5 percent of who are among the most outstanding stu- funding, are not able to do. I am extremely all the space available in Manhattan. And dents in the country–consider a career in pleased with the program, and I think we most of it will be on land the university al- teaching as not acceptable because they will be doing much more of this kind of ready owns. In the long term, the parks, intervention. do not respect the profession. I attribute

16 Bulletin of the American Academy, Spring 2011 The University and the City playgrounds, and other enhancements One way in which Pittsburgh does stand Our leading institutions need that come out the other side will be supe- out, however, is in the number of people rior to what exists now. who work in Pittsburgh but don’t live in to explore the use of computer Pittsburgh. Pittsburgh is second only to We will always have people who want to Atlanta in the percentage of jobs in the technology where it is applica- make their careers by criticizing, and city held by people who don’t live in the ble, guard against the use of it everything that is presented in the media city. Until two years ago, commuters in is point-counterpoint, so small but stri- Pittsburgh paid $10 a year for the privilege where it is not applicable, and dent voices get elevated to the point where of working in Pittsburgh. Today the rate is they seem to have an equal status. But we $1 a week, $52 a year, and it is not going to educate students to know the have worked hard at being more closely get any higher, because you cannot find a difference. related to this community–a community politician who represents people who live in which we live, in which we raise our outside the city who is going to vote to in- way of delivering education, and that stu- children, and in which we are neighbors. crease taxes on his or her constituents, dents attracted to the technology will feel We are committed to that community and even though doing so would help the city. that it is also the most effective way of get- to the people who live in the ecosystem Instead we get crazy ideas like taxing ting an education. Our leading institutions with us. tuition. need to explore the use of that technology NYU in particular is ecosys- Question where it is applicable, guard against the use of it where it is not applicable, and ed- temic with both the neighbor- Education has always faced a lot of chal- ucate students to know the difference. lenges, both in the lower schools and in hood and the city in which higher education. Right now, we have the Jared Cohon additional challenge of the computer. For at least twenty-five years, we were we live. Teachers often feel that the computer was sure that computers would be the answer placed in the classroom as a cure-all. But to education. Unfortunately, we were more and more we are finding out it is a Jared Cohon so sure of it that we were deeply disap- tool. Students have realized this and now pointed when we saw how miserably they As a general matter, if a piece of land is feel they can find all of the answers them- performed at every level. Our disappoint- going to be developed and you have your selves. How are educational institutions ment has created a discrepancy between choice of entity to develop it, choose a going to convince students that the insti- our expectations and what the technology university. They bring their institutional tution is still relevant, that reading a book has delivered. values to everything they do, including is much more educational than using Google the way they develop land. to find the answers? Great advances have recently been made in cognitive science, in understanding In Pittsburgh and Providence, the univer- Robert Berdahl sities have been thoroughly beaten up by how people learn. Advances have been politicians and the media over the issue of The younger generation has grown up made in computer science, in designing tax-exempt land and the tax base of the with the computer; it is their vehicle for effective and attractive interfaces, and in cities. The argument is that we are not communication, for acquiring informa- embedding artificial intelligence into edu- paying our fair share. From a political per- tion, and for presenting themselves to the cational software. We also now have much spective, such attacks make for good poli- world. Our universities have been some- more powerful computers. We are at the tics. Attacking us makes great political what slow to employ that technology beginning of an era of educational tech- sense because we represent many fewer in the most effective ways that it can be nology that does make a difference. votes than the people to whom they are employed. This does not answer the fundamental appealing with those statements. I worry that with our failure to really en- question, though, of what role computers But if you look at the facts in Pittsburgh, gage the technology to its fullest, we have should play. If anything, it joins the ques- the reality is stunning. Many in the city ceded some of the instructional use of tion in a particularly acute way, because believe that our tax base is what it is be- technology to the for-profit institutions, now they really can create a learning envi- cause we don’t pay taxes on the land that the University of Phoenix and other on- ronment that is effective. we own and that Pittsburgh is unique in line universities, of which there are now On the issue of educating our students this respect. In fact, Pittsburgh is average, dozens and dozens. For certain kinds of about how to access information, all of exactly on the median in terms of the per- training, online learning is very effective. the institutions of higher education that I centage of land that is tax-exempt. And But the dangers are that the public will get know now take this issue seriously. They the vast majority of the tax-exempt land is the perception that this is the best way, work to help students understand how to not owned by us but by the government. the cheapest way, and the most effective parse information, qualify it, how to iden-

Bulletin of the American Academy, Spring 2011 17 Academy Meetings

tify the good from the bad, the useful from the junk. It is not easily done, but we now see it as our responsibility, and it is a core part of the education in all of our institu- tions. Ruth Simmons We had a midyear graduation recently, and I was thinking about what to say to students, so I decided to talk about poetry. We want students who have the capacity to range across many areas. Whether stu- dents will take that goal seriously will be determined in part by the job market. In my conversations with employers about the many skills they need in workers, I al- ways come away with the impression that there is always going to be a demand for students who are educated in this much broader way. I was recently in China talking with edu- cators about a new effort there to create a liberal arts version of their universities. Because of worldwide competition, we might end up needing to do more reaching across the curriculum. If China and India commit to a move away from the narrow technological approach to education and toward an all-encompassing educational approach, our students will need to be able to compete against the students such systems would produce.

© 2011 by Leslie Cohen Berlowitz, John Sex- ton, Robert M. Berdahl, Jared L. Cohon, and Ruth J. Simmons, respectively Mike Cohea Brown University

18 Bulletin of the American Academy, Spring 2011 Academy Meetings

The Future of Our Research Universities: Challenges and Opportunities

John L. Hennessy Introduction by Paul Brest

1966th Stated Meeting, held at the Stanford University Faculty Club on January 5, 2011

Introduction Each of these presidents also guided the University through serious financial set- I am pleased to be here with Fellows of backs. But I think it’s fair to say that they the American Academy and distinguished did not confront fiscal crises of the magni- guests–and honored to introduce John tude that John Hennessy has faced–and Hennessy, Stanford’s tenth president. faced up to with a vision and decisiveness that has set the foundation for the Univer- I have had the privilege of serving under sity’s future. As you can see from a walk four great presidents, each of whom sur- around campus, this has not been a time of mounted major challenges and brilliantly circling the wagons or retrenchment but a seized opportunities to make Stanford the period of aggressive development (in every great institution it is–even as they helped sense of the word). strengthen research universities through- out the United States and beyond. An electrical engineer, John has devoted as much attention to the humanities and Dick Lyman withstood violent attacks on sciences as any of his predecessors. And the freedom of inquiry that lies at the very (aided by Helen and Peter Bing’s endless core of the research university. During his generosity) he has helped realize Gerhard’s tenure, the University also began to under- dream for a major concert hall on campus. go the social changes–perhaps accelerated Paul Brest by some of the same forces–that resulted As dean of the Law School, I had the privi- in its wonderful intellectual and cultural lege of serving on the University cabinet Paul Brest is President of The William and diversity. with John, first when he was dean of the Flora Hewlett Foundation and Professor and School of Engineering and then briefly Dean Emeritus of Stanford Law School. He If Dick’s main challenge came from the left when he was provost. In those days our has been a Fellow of the American Academy on campus, Don Kennedy’s came from a discussions were not of fundamental chal- since 1982. populist attack on the academy from Capi- lenges to the American research university tol Hill. As enervating as this battle was, it but rather the arcane subject of university did not distract Don’s focus on improving cost accounting and the byzantine and undergraduate education. (It’s hard to be- sometimes contentious financial relation- lieve now, but undergraduate education ships between the central university and was then a somewhat neglected domain at its schools. Stanford.) But that’s for another time, perhaps over a Gerhard Casper turned the task of recon- drink. Now to less parochial matters. It is structing the campus in the wake of the my great pleasure to introduce John Hen- Loma Prieta earthquake into an opportu- nessy. nity to improve the campus’s architecture. And he redoubled Don’s efforts at improv- ing undergraduate education.

Bulletin of the American Academy, Spring 2011 19 Academy Meetings

That said, I am going to start with a little cause competition for the best and bright- good news, then talk about some of the est is increasing worldwide as more and challenges to the health of our public in- more countries look to create their own stitutions and to the financing of research knowledge-driven economy. To the re- and education in science and engineering. port’s list of challenges, I would add the Finally, I will talk about opportunities. Any lack of broad scientific literacy among the plan addressing the challenges we face has U.S. populace. to think not only about challenges and changes at the federal level but also about In 2010, a revised edition of Rising Above what we might do inside the institutions the Gathering Storm was released with a to improve our own operations. subtitle that declares, “Rapidly Approach- ing Category Five.” The report’s key in- The Good News sight was that little progress has been made, and, especially on research funding American research universities are widely and the budget, things have actually got- considered to be the best in the world. We ten worse. Public institutions in particular are widely admired. In any set of studies are under incredible stress right now. you look at, whether Shanghai Jiao Tong University’s Academic Ranking of World Uni- versities or Times Higher Education’s world American research universi- John L. Hennessy university rankings, the United States is in a leadership position. That is the good ties are widely considered to John L. Hennessy is President of Stanford Uni- news. We also have by far the best track be the best in the world. We versity. He has been a Fellow of the American record for moving our innovations from Academy since 1995. the research laboratory out into industry, are widely admired…and we where they contribute to the economic vi- Presentation tality of the country. The innovative and have by far the best track entrepreneurial spirit, for the most part, record for moving our inno- Thank you, Paul. I was tempted, after remains strong inside our universities. Monday night, to turn this into a discus- Competition among institutions has bred vations from the research sion about leading great football schools excellence. We don’t just compete with and tell you that the secret is to find a Berkeley on the football field. We compete laboratory out into industry, quarterback who is an engineering major. with them for faculty and for students, where they contribute to the Instead, I am going to share some thoughts and this competition has made all of us I have developed while serving on the Na- better. The competition between public economic vitality of the tional Academy of Sciences committee and private institutions of higher educa- that is focused on the future of our re- tion in the United States is a model that country. search universities, a committee driven we should think about as we contemplate by a congressional request to identify the the reforms needed in k–12 education. If our research investments are to be the ten most important actions we could take seed corn for economic growth in this inside the university and at the state and The Challenges country, then those investments must GDP federal levels to address what is perceived What challenges do we face? The National keep pace with the growth in our . to be a major challenge coming from out- Academies report Rising Above the Gather- Since 1976, despite a few periods of in- R&D GDP side the United States. Those of you out- ing Storm talks about the key issues: stag- creasing funding relative to , the side of science, engineering, and medicine nating research support; emerging well- general trend line has been a slow decrease will forgive me if this talk becomes science-, funded competition, particularly in Asia; over time. That’s a trend we need to worry medicine-, and engineering-centric. We the lack of U.S. student interest in science about. However, the picture is not the do have problems outside those areas, but and engineering; and a graduate student same for all disciplines. For example, the those problems are less tied to the issues body that is increasingly international– budget for the National Institutes of NIH surrounding U.S. scientific, medical, and not that that is not a great thing. This Health ( ) has gone way up. But if you engineering competitiveness. Also, should country has been built with incredible tal- look at other areas, funding has gone we suffer major blows to our leadership in ent from around the world. But whether down or stayed flat in terms of real dol- science, medicine, and engineering–the that will remain the case in the future is lars, which means that funding overall is GDP technology fields–the decline of the rest uncertain, both because of occasional un- declining as a percentage of . Particu- of the university will not be far behind. certainty in Washington about visa poli- larly in the engineering disciplines, this is cies and how they should work and be- an increasing concern. The U.S. percent-

20 Bulletin of the American Academy, Spring 2011 The Future of Our Research Universities

The competition between pub- lic and private institutions of higher education in the United States is a model that we should think about as we con- template the reforms needed in K–12 education.

land now outdistances us by a consider- able margin. Indeed, many of the coun- tries that we used to be ahead of or tied with have surpassed us. As the number of young people with science and engineer- ing degrees has gone up in other parts of the world, the number has gone down, as a percentage of population, in the United States. The trend is deeply concerning. For a long time, the United States has awarded visas allowing foreign students to enroll in graduate programs and earn PhDs from U.S. universities. In 2003, 50 percent of engineering doctorates were awarded to non-U.S. citizens. Considering how our own k–12 students are doing in science, mathematics, and engineering, we cannot afford to lose this flow of talent coming into the United States. Fixing the core problems of our k–12 system will take years. Thus, our only choice, if we are going to produce people to work in these fields, is to continue to import the best and brightest from around the world. Linda A. Cicero/Stanford News Service We’ve got to ensure that that can con- Corridor of Arches at Stanford University tinue, that we can get through possible visa issues. Unfortunately, we have people age of worldwide R&D is also declining. articles published, and number of research- in this country who don’t believe we From 1996 to 2007, R&D expenditures rose ers. The amount of growth in these areas should keep that door open and would like from half a trillion dollars to $1.1 trillion since 1996 is astonishing. Asia is changing to see it shut or would like to see people, worldwide. But the North American and quickly and will play a major role. once they get their degree, mandatorily European shares decreased over the pe- sent home. I am in the group that believes riod while spending in the Asia/Pacific re- The United States is also being outpaced that we should staple a green card to the gion rapidly accelerated. Governments in in the number of science and engineering diploma of every international student Asia are making investments in these areas degrees its citizens are earning. In 1975, with an advanced degree in science and while we are reducing our investments, at the ratio of first science and engineering engineering. After all, to make a quarter- least in real terms. degrees among U.S. twenty-four year olds or half-million dollar investment in some- was about four per one hundred. That was body who gets his or her PhD in one of Asia, especially China, is leading the world good enough for fourth or fifth place in these fields and then to say, “Well, you not just in growth of R&D expenditures the world, tied with a lot of other coun- must go home right away,” is just fool- but in other important science and tech- tries, including Finland. In 2000, the rate hardy. nology factors such as high-tech exports, was about six per one hundred, and Fin-

Bulletin of the American Academy, Spring 2011 21 Academy Meetings

This country has been built important and why they need to under- education will lead to a lower GDP growth stand it, we are going to suffer the conse- rate, which will lead to entitlements taking with incredible talent from quences. And imparting this knowledge is an even larger portion of the pie, which will especially important when the country is lead to even less investment in the things around the world. But whether making such a large investment in science that will lead to growth in the GDP–in that will remain the case in and engineering; it is important for peo- short, a cycle that is very difficult to get out ple to understand why that investment is of. The problem we face is in convincing the future is uncertain. important to them and how it is changing the American public that a crisis 30 to 40 their world. years from now must be worried about now Public interest in science-related issues, and not in 30 or 40 years. If we don’t begin particularly in medical discoveries, re- Our public research universities are also in to turn the curve now, we are never going mains amazingly high, which is perhaps significant difficulty. In constant 2006 dol- to solve the problem. unsurprising. But the public is also inter- lars, state appropriations to public research ested in other new technology. The one universities in the top two Carnegie clas- The United States is being out- thing that has fallen off is space explo- sifications have steadily decreased since ration, although the little robots NASA has 1987, significantly undermining these in- paced in the number of science sent into space were very popular. So, the stitutions. They are probably experiencing solution is to send more of them. one of the most difficult times they have and engineering degrees its ever been in. One result of this financial Public interest in science might be high, difficulty has been a steady boost in tu- citizens are earning. but how is the public’s scientific literacy? ition. Net tuition in public universities as a One recent survey that asked people to an- percentage of revenue has gone from 24.5 Opportunities: What Can Universi- swer basic scientific questions found that percent in 1984 to 37.3 percent in 2009. At ties Do? not just the United States but the whole Stanford, by comparison, about 13 percent world has a problem with scientific liter- of revenue comes from tuition. Public uni- What can our universities do? What role acy. I was amazed by some of the survey’s versities are now highly tuition dependent, can we play? Many of the challenges we findings. For example, something on the which leads them to look more and more face require policy changes at the federal order of 25 or 30 percent of Americans re- toward tuition as a natural solution to level. Convincing Congress that appropri- spond incorrectly when asked whether the their increasing revenue needs. One of the ate investment for our country means not earth goes around the sun or the sun goes cutting research funding levels but grow- key factors driving down state appropria- GDP around the earth. The public does know tions to public universities has been Medi- ing them at the rate would make an that the center of the earth is hot. They caid spending, which rose from 0.4 per- enormous difference. We must also urge have seen it in science fiction. But the lack cent of the gross state domestic product in Congress to make visa reform a priority so of basic knowledge about real science is 1980 to 0.9 percent in 2001. In some states, that we can encourage the best and bright- striking, especially when you consider Medicaid spending has already surpassed est international students to stay. But uni- that the survey looked at knowledge of investment in k–12 education. versities must also ask what they can do fairly basic concepts and didn’t even touch to help themselves. We must continue to on subjects that require more understand- What has happened with the federal bud- speak out against earmarking and in favor ing, such as why there are seasons or why get is cause for even greater concern and is of merit-based research programs, which there are tides. the real reason I worry about research have been one of the stronger aspects of funding. I worry that the coming crisis in our entire research funding. We must also We face a significant challenge here. One the growth of entitlement spending means continue to educate great leaders, innova- way of approaching it might be to restore we have not seen the worst-case scenario tors, and teachers. We must prepare people the teaching of scientific progress to our by a long shot. Sometime between 2040 for a world shaped by science and technol- American history textbooks. Jonathan and 2050–assuming that tax revenue as a ogy. We must engage all our citizens. And Cole, the former provost of Columbia, has percentage of GDP remains flat–the com- we must make ourselves better by improv- written about the elimination of scientific bination of Social Security, Medicare, Medi- ing efficiency throughout the university progress in the teaching of American his- caid, and interest on the debt will exceed system. tory. He points out that many American all the U.S. government’s tax revenue. All history books have lots of things to say the tax revenue. That leaves no money for Educating Leaders, Innovators, and about modern culture, about the sexual national defense. No money for investing Teachers revolution, about women’s liberation, but in infrastructure. No money for investing A residential, liberal education is the say little about the way in which science in education. If we cannot solve this gigan- foundation that has made our education and technology have changed the world tic crisis, we will enter a death spiral: cut- system the envy of the world. Many Asian we live in. If we don’t tell people this is ting back on investments in research and countries started out by emphasizing their

22 Bulletin of the American Academy, Spring 2011 The Future of Our Research Universities

Public interest in science ics to become teachers when they could pletely behind us, but in most disciplines, get a high-paying job elsewhere is to per- we are doing much better. By focusing on might be high, but the United suade them that in k–12 education they such problems, by thinking about our ed- will be treated as professionals, they will ucation system, we can make progress. States and the whole world be compensated reasonably well, and they have a problem with scientific will make a big difference in the lives of We must also better prepare high school young people. If we don’t do that, we are students for college-level work. I believe literacy. never going to fix the problem. We can lack of preparedness is the major reason train all the people we want, but if we Latinos, blacks, and Native Americans do k so much worse than whites and Asian desire for engineers and scientists. Now have a –12 system that doesn’t treat stem they are beginning to think about the them as professionals, it won’t work well. Americans in completing degrees. value of a broad, liberal education that Even though the percentage of underrep- brings together people from different We have also got to work on attracting a backgrounds in a residential program and broader fraction of the population, espe- Convincing Congress that cially our minority population, into the trains them to be lifelong leaders and stem appropriate investment for our learners. fields–into science, technology, engineering, and medicine. In 2007, about country means not cutting re- We have to nourish entrepreneurial spirit 39 percent of our k–12 public enrollment and technology transfer. At the same time, was underrepresented minorities. The search funding levels but grow- we must address the challenges raised by percentage drops to about 26 percent for conflict of interest. If we don’t, congres- undergraduate enrollment. It drops again ing them at the GDP rate sional concern with conflict of interest for science and engineering degrees. And would make an enormous might lead to Congress building a wall be- again for master’s degrees. And it plum- tween universities and industry, which mets when we get to doctoral degrees. Mi- difference. would destroy a partnership that works norities constitute 39 percent of our k–12 well in this country. Already, I have had population but just over 5 percent of our resented minorities who aspire to stem junior faculty tell me they don’t want to PhDs. And the demographics of the popu- degrees and ultimately complete such de- have anything to do with companies be- lation continue to change. By 2050 mi- grees is better over a five-year period than cause they fear the NIH won’t fund them over a four-year period, the completion if they do. Public universities are now percentages for both periods are signifi- cantly lower than those for whites and Finally, we must educate teachers. Fixing highly tuition dependent, Asian Americans. The fact is, you cannot science and math education in our k–12 walk into college thinking you are going to system is the key to the future of the uni- which leads them to look major in a stem discipline without having versities over the long term. According to had an adequate high school background the International timss math and science more and more toward tu- in calculus and physics. The university tests, our students do roughly as well as ition as a natural solution can and must do a better job on mentor- Bulgaria in math and science, trailing ing, but we are also going to have to fix the many other oecd countries. Bulgaria to their increasing revenue challenge of preparation for these young spends about one-tenth as much per stu- people. dent as we spend. One of the key reasons needs. our students perform so poorly in science norities will constitute more than 50 per- How do universities do on PhD education? and math is that only a small number of cent of the population. If we don’t figure In engineering, only 64 percent of the peo- teachers, particularly in grades 5 through out how to do a better job of attracting and ple who start PhDs finish in ten years. In 8, have backgrounds in science and math; retaining underrepresented minorities in the humanities, only half finish in ten years. they are teaching topics they were not science, engineering, medicine, and math- Four or five years working on a PhD is not trained in. In science and math, this is a ematics disciplines, we are not going to fix necessarily a complete waste of time, but difficult problem to overcome. And the this problem in the long term. The good those years represent a gigantic investment problem is worst in inner-city schools, news is that we have made progress on –both of money and lost opportunity cost. where science and math scores are much similar problems in the past. Thirty years Each individual enrolled in a PhD pro- lower than the national average. ago, the chart for women in these disci- gram–who is almost by definition a highly capable individual if they have made it into A major overhaul of what we do in k–12 plines would have looked a lot like today’s such a program–could instead be out mak- education is needed, because the only way chart for underrepresented minorities. ing other contributions to society, earning we are going to persuade talented people The representation of women in stem a living, doing other things. Even paying who have a degree in science or mathemat- disciplines is not a problem that’s com- taxes. The fact that so many of these indi-

Bulletin of the American Academy, Spring 2011 23 Academy Meetings viduals are taking so long to complete their skills as a faculty member, and then have great opportunities in areas of the social PhDs is thus a real problem. Stanford’s them leave for an industry job. At the sciences and the humanities: How can we numbers are better than the average, but same time, we could better prepare our govern better? What do we do about eco- they are not 100 percent. They are not even students for careers outside the academy nomic development around the world? close. In engineering, for example, we are and make an investment in that. The size These and other key problems are areas at around 75 percent completion. The really of our PhD programs is driven in part by we could work on and really make a con- bad news from the PhD completion rate federal research investment, but it is also tribution to. data is that students who drop out don’t do driven by the size of the intellectual com- so in their first or second year. They drop munity we would like to have. If we want I want to finish with a story that shows out in their third, fourth, fifth, or sixth year. to maintain our intellectual community how the work we do at the university can If these students were all dropping out in at its present size, we have to think more help change the world and improve the their first year, concluding that a PhD really constructively about career alternatives lives of its poorest people. Several years for people who will not remain in the ago Stanford’s Hasso Plattner Institute of academy when they finish their training. Design began to offer a course called En- We must urge Congress to trepreneurial Design for Extreme Afford- make visa reform a priority so The challenges facing the university can ability. Jim Patell, a professor in Stan- leave us all too depressed. But I think the ford’s business school, currently leads the that we can encourage the best present moment is also an incredible time course, which puts together interdiscipli- for universities. Universities have become nary teams of students. MBA students and brightest international the home of research and advancement. work with engineering students and students to stay. Industry simply doesn’t make the long- sometimes with students from the med- term investment in research that it once ical school. For two quarters, the course wasn’t for them, we could live with that. made in this country. The Bell Labs of the takes over their lives, as teams research and IBM But they are dropping out later than that, world are gone. Research is not what create products for the most challenged 50 PARC and that represents a significant invest- it once was. Our friends at Xerox are percent of the world. This generally ment loss. At Stanford we calculated what not what they once were. Enormous chang- means countries where the average salary percentage of our graduate research fund- es have taken place, and I think it is up to is less than $2 a day. Students in the class ing goes to students who don’t complete universities to continue to make that in- have worked on low-cost solar lanterns, their PhD and found it is around 9 percent. vestment. We face gigantic intellectual better manual irrigation pumps, and high- Nationally, the rate is probably closer to 15 and technical problems, from what to do efficiency stoves. But the project I love the percent. when silicon is no longer an option for in- most involved designing a low-cost baby tegrated circuits, to the issues around en- incubator. A group went to Nepal and We must also work on time to degree, the ergy and solving the energy problem, to found that one of the major causes of early number of years graduate students take to the issues we face in computer science. infant death there is low birth weight. complete their PhD, as well as the average Low-birth-weight babies can’t maintain age at which PhDs are earned. Average One of the things I fear most is that we their body temperature and thus are at time to degree peaked at close to ten years have encouraged society with all this won- risk for hypothermia. When the group re- and now hovers around eight years. As derful technology we have built–the In- turned, they asked how could they solve people take longer earning their degrees, ternet and the World Wide Web–but we this problem. Western-style incubators they begin professional careers later in may have encouraged them before we cost $25,000 and require electricity, which life. The average age of a first NIH grant is have actually figured out how to solve is- is not available in many rural areas of the now thirty-seven at Stanford, and I think world. Even jerry-rigged incubators made it’s forty-two nationally. The average age We must continue to educate with lightbulbs cost about $2,500 and still at first appointment is in the low thirties. require electric power. The group set out A related issue is the number of people great leaders, innovators, to design an incubator that would cost $25 getting PhDs who then turn to nonaca- and teachers. and not require electricity. They came up demic careers. The number has gone up with a tiny sleeping bag for babies. The significantly because there simply isn’t design uses a piece of technology from that much growth anymore in the univer- sues like privacy and security. When peo- MIT, a wax substance in a bag that can be sities. When people spend as long as they ple find that everything they have done dropped in a pot of boiling water where it are spending to complete PhDs and then online is essentially accessible to the pub- melts. The substance then maintains a head to a nonacademic career, this seems lic, we could find ourselves in a very steady-state temperature for an extended to me like a double waste. We can’t say difficult situation. Of course, young peo- period of time. The warmer goes in a back anymore, oh, they are working on their ple today just put everything up on Face- pocket on the sleeping bag, and the baby publications, they are developing their book and give it away anyway, but that’s goes in the front. The bag can then be a different problem. We have before us tightened like a mummy bag, and with it

24 Bulletin of the American Academy, Spring 2011 The Future of Our Research Universities

We must prepare people for a many other institutions, and we are now even make a significant dent in replacing seeing some extremely tough situations federal funding. So, we are going to have world shaped by science and play out. Keeping the word amateur in to hope that we can convince the people in college athletics is going to be an increas- Washington that investment in research technology. ingly difficult problem as coaches’ salaries is, over the long term, in the country’s go through the roof. The difficulties this best interest. you can maintain the baby’s temperature can cause are easy to see. An agent ap- for about four hours. If the transport time proaches a young man, often one from a Question to a better medical facility is longer, you tough, underprivileged background, and You mentioned k–12 education and why can take out the wax pouch and drop it in says, “Your coach is making $5 million a the current state of affairs is a huge prob- another pot of boiling water. One thing year, and you’re the star. What are you lem. What is being done to turn that people in the developing world do have getting paid?” In basketball we see the around? access to is heating sources, so they can rise of the one-and-done philosophy reheat the wax, put the pouch back in, and where there’s not even a notion that this John Hennessy continue their journey. What started at person is going to get a degree. They’re The k–12 problem has multiple parts. Stanford with a multidisciplinary group of going to come in, play semiprofessional graduate students became a nonprofit One is the issue of understanding what basketball for a year, and go to the draft. works, building up an understanding of named Embrace and moved to a hospital These are real problems. We’ll see what k in Delhi, India, that works with nearby ru- NCAA how to make –12 better based on experi- Mark Emmert, the new head of the , ment and quantitative measurement, ral communities. The hospital agreed to can do to fix them. pilot the project, and in May of last year based on hard data about what makes a the incubator helped save its first baby– We must better prepare high difference. In California we have spent a Nisha–who was born prematurely. GE is lot of money reducing class size. Smaller now interested in the project and has school students for college- class size doubtless has some benefits, but placed an order for 10,000 units, which we now know that improving teacher they will distribute in various parts of In- level work. quality is more important and more effec- dia and Nepal. This is the kind of thing tive than reducing class size. So, we could that universities can do to change the Question have used that money more effectively if world for the better. Our potential is we had sought to improve teacher quality You mentioned the problems with re- great, and, although we face a lot of chal- and to attract and keep good teachers. search funding, but you didn’t say where lenges, I think the opportunities before us the solution is. As federal research fund- We know a lot of other things about im- are remarkable. ing continues to decline, what are the al- proving education. One of the things we ternative funding sources? How will we don’t know, though, is what makes good Question manage some of the pressures that come, teachers. We know that teachers, as you How do you resolve the tensions between for example, from industrial funding, would expect from any distribution, fall in maintaining a world-class research uni- which tends to pull us into short-term a wide variety of levels. Teachers in the versity, a world-class undergraduate pro- time horizons? lower quartile contribute very little. One gram, and a world-class football and bas- study found that if we eliminated the low- John Hennessy ketball team? That’s a serious question. est 10 percent of math teachers in Texas, Some funding from industry clearly will we would close more than half the achieve- John Hennessy help, as will funding from foundations. ment gap between minorities and whites. But the lowest 10 percent of Texas’s teach- It is a serious question, and I think Stan- But we have to balance the time horizon. ers are more heavily represented in poor ford is able to resolve that problem in a The best model we have seen for working districts than they are in rich districts. So different way than many other institu- with industry is a consortium-like model, eliminating the worst teachers would actu- tions can. We can resolve it by recruiting a where we have multiple companies com- ally mean eliminating 20 to 30 percent of select group of individuals who not only ing together and agreeing on a research the teachers in poorer districts. want to excel at their athletics but also agenda. This tends to lead to a more long- want to leave here with a Stanford degree term agenda because the focus is on a We need better data for better understand- in their hands. So we can recruit those stu- common set of big problems faced by all ing. Then we need to reorganize how we dents who are capable of doing the work. members of the consortium rather than think about teachers. Why is it in this That’s the only way we can survive. If you on problems related to getting one com- country that being a professor in college is are a talented, intellectually capable per- pany’s next product to market. We are a well-respected, reasonably compensated son and you are a great athlete, this is sim- going to have to continue to build those job, but being a teacher in k–12 is some- ply the best place in the country to come. sources of funding, but the honest truth is thing that people don’t respect and don’t The problem is much more difficult at that I don’t think they can ever replace or

Bulletin of the American Academy, Spring 2011 25 Academy Meetings compensate well? We need to fix that. any answers. Let me help you on that. One would make an effort to bring your col- Until we do, we’ll never attract and keep of the reasons it’s so difficult for univer- leagues together to think coherently about those great teachers. sity people to suggest serious solutions to what universities can do to deal with these some of these problems is that when they issues. Question are discussed in universities and by uni- John Hennessy First, what fraction of Stanford engineer- versity people the universities themselves ing undergraduates go on to graduate are presented as victims rather than as in- I think we can do something here. My school in science and technology? Sec- stitutions complicit sometimes in the cre- biggest fear, though, is that we succeed in ond, Stanford is in the middle of Silicon ation of the problem and sometimes in the training high-quality teachers who then Valley. Yet the number one or number maintenance of the problem; for example, go out into the field the way it’s currently two major at Stanford among the under- research earmarks. They are not primarily operated, with the current compensation graduates is in finance and economics a congressional problem. system and treatment of teachers. Our rather than science and technology. Is that John Hennessy high-quality teachers will stay for five of concern? years and then go get another job. They I agree with you 100 percent; it’s a univer- will get out of the discipline because k–12 John Hennessy sity problem, and it undermines our peer teaching is not at present the kind of ca- A large fraction of our students go on to review. I actually led the effort to try to get reer that somebody coming from this in- get a master’s degree, but a relatively all my colleagues in the Association of stitution is going to want to stay in. That modest number go on to get PhDs. The in- American Universities to put a ban on is the real dilemma we have to solve. stitutions that are most successful at send- Regarding universities’ complicity in the ing their students on to get PhDs in sci- Universities have become the problems we face, I agree with you. But ence and engineering are the small liberal home of research and ad- notice that I did talk about two problems arts colleges. Pomona and Reed send a that we have to solve internally: PhD higher percentage of their students on to vancement. Industry simply completion rates and time to degree. Adja- get PhDs than does Stanford. doesn’t make the long-term cent to that is preparing our PhD students Stanford is in Silicon Valley, and having for nonacademic careers. If we can’t do a that magic so close does lead many stu- investment in research that it better job there, we should just cut the dents to go into industry. We don’t push size of our PhD programs, because it does them, though. Students can make up their once made in this country. not make sense to educate those people, own minds. They’re smart people. We do have them spend that kind of time here, have a lot of economics majors, and that earmarks. Out of sixty-five institutions, and not be prepared for a career outside reflects what students can readily see twenty wouldn’t sign on. Even though, in the academy. about how we compensate engineers and the bigger picture, we’re not talking about scientists compared to how we compen- a lot of money, it’s still bad. © 2011 by Paul Brest and John L. Hennessy, sate investment bankers. To change that, respectively we need to think about how, in society, we Question can change the rewards for those profes- It corrupts the research system, and that is sions. a bad thing. On the improvement of ele- Question mentary and secondary education, a lot of good things are coming out of universi- The data you have shared with us are ex- ties. A million experiments and a million tremely persuasive. But I want to make a reform efforts are under way. But you will couple of observations about them. First, look long and hard before you find a con- your presentation would not be surprising certed, systematic effort by the major uni- coming from a social scientist; it’s some- versities to agree on a set of priorities for what more surprising coming from an en- research and for the investment of their gineer who is accustomed to solving prob- resources in the improvement of the sys- lems in addition to analyzing them. What tem. The scattered efforts that are going we have here is an excellent exposition of on now, no matter how many of them a large number of problems, but you there are, aren’t going to succeed, because stopped before you were able to suggest they are scattered and unfocused. I would hope that university presidents, like you,

26 Bulletin of the American Academy, Spring 2011 Academy Meetings

The Great American University Jonathan R. Cole 1956th Stated Meeting, held in collaboration with Boston University on September 16, 2010, at Boston University

concepts of congestion pricing, human cap- mist Henry Rosovsky approximated these ital, and the self-ful½lling prophecy. They basic ratios years ago, and the numbers still almost certainly don’t think about the elec- hold today. There is not one German univer- tric toothbrush, Gatorade, the Heimlich ma- sity in the top 50, nor one Russian university neuver, or Viagra. Yet all these discoveries in the top 75 (unless they do their own rank- and innovations have their origins at Amer- ings). By China’s own accounting, there are ican research universities. no Chinese universities in the top 200. Fur- thermore, 60 percent of all Nobel Prize win- Most people think of universities in terms ners in science since World War II have been of undergraduate and professional educa- Americans or foreign nationals working at tion–of teaching and the transmission of American universities. The most widely knowledge–rather than in terms of the cre- cited scienti½c literature is dominated by ation of knowledge. This point of view is American scientists and scholars. Indeed, understandable: Americans are concerned American universities have become the envy about the education of their children and grandchildren, and they base their under- What has made our universi- standing of universities on their own expe- riences in education. Certainly, teaching ties the greatest in the world is undergraduate and graduate students is critically important and an integral part of not the quality of our under- Jonathan R. Cole the university’s mission. But what has made graduate education but the our universities the greatest in the world is Jonathan R. Cole is the John Mitchell Mason Pro- not the quality of our undergraduate educa- production of new knowledge fessor of the University at Columbia University tion –as important as that is–but our abil- and was Provost and Dean of Faculties from 1989 ity to ful½ll one of the other central missions through the discoveries that to 2003. He has been a Fellow of the American of leading universities: the production of change our lives and the world. Academy since 1992. new knowledge through the discoveries that change our lives and the world. of the world. Because many of the brightest Presentation In The Great American University, I tell the and most able young people throughout the story of how American universities became world want to attend and work at them, our When most educated Americans think the greatest engine of innovation and dis- universities may collectively represent the about our great universities, they probably covery the world has perhaps ever known, only American industry that currently has don’t think about the origins of lasers, fm how that success was achieved in a relative- a favorable balance of trade. radio, magnetic resonance imaging, global ly short period of time, and how our uni- Contrary to what most people think, the positioning systems, barcodes, the Google versities are under threat today. On what American research university is amazingly algorithm, the fetal monitor, the nicotine evidence do I base the claim that our uni- young, and it is highly embedded in the dy- patch, antibiotics, the Richter scale, bucky- versities are the best in the world? During namics of the larger American society. It balls and nanotechnology, the discovery of the past century, the United States has pro- did not originate in 1636, when Harvard Uni- the insulin gene, the invention of the com- duced an abundance of creative scientists versity opened its doors, or with the found- puter, or the development of bioengineering –more than any other nation. ing of Yale University or Columbia Univer- dna through the discovery of recombinant . In numerous surveys and rankings, 80 per- sity, though we tend to think of these insti- Nor do they think about improved weather cent of the top 20 universities in the world tutions as old, great universities. In reality, forecasting, cures for childhood leukemia, are in the United States; American univer- the American research university dates to the pap smear, scienti½c agriculture, survey- sities make up 75 percent of the top 50 and one hundred years after the signing of the ing and measuring public opinion, or the roughly 60 percent of the top 100. Econo- Declaration of Independence, when Johns

Bulletin of the American Academy, Spring 2011 27 Academy Meetings

not averse to recruiting stars from other in- stitutions, set his sights on places like Har- vard. At ½rst, his model was not overwhelm- ingly well received. Charles Eliot, who led Harvard in the late nineteenth and early twentieth centuries, said the Hopkins and German systems of higher learning would ½t Harvard freshmen “about as well as a barnyard would suit a whale.” As the com- petition rose and Eliot anticipated the loss of great faculty members to Johns Hopkins, Harvard’s model began to change, as others did elsewhere. That transformation cata- lyzed a great deal of interest in the new Amer- ican university. Along with the influence of the German and other European systems, the late nineteenth and early twentieth centuries witnessed a growing belief in the potential of science and technology. During the Civil War, the federal government became involved with universities. Responding to a demand for agricultural colleges, President Lincoln and Congress passed the Morrill Act of 1862, providing funding for land-grant colleges. Image courtesy of the Smithsonian Institution Niels Bohr, James Franck, Albert Einstein, I. I. Rabi The Act–which likely passed during the Civil War because the Southern states were not represented and therefore could not Hopkins University was opened in 1876. ican education and university life fell in love ½libuster against it–fostered agricultural Research universities are for the most part with the German system. Accordingly, the revolutions in the United States and made twentieth-century institutions. Their growth American system became an amalgam of possible the establishment of state univer- can be traced to the last quarter of the nine- the German model, which emphasized ad- sities and research stations. teenth century; by the 1930s, the system’s vanced research, and the British model, The emergence of organized academic dis- core set of values was in place. The critical which emphasized undergraduate colleges. ciplines further shaped the American uni- period of growth began in January 1933 and But in many ways, the American university versity model. At the end of the nineteenth took off after World War II. Essential to this improved on models that existed elsewhere. century, presidents of universities, such as growth was a remarkably enlightened post- For example, it was much less rigid and hier- Harvard’s Eliot or Columbia’s Nicholas war science policy–the best in the history archical than the German system and was Murray Butler, took on the responsibility of this country, certainly, and maybe in the more democratic in its organization and of assessing the quality of academic work history of any nation. That science policy structure. In fact, many of the scientists and at their institutions. As the breadth of provided the impetus for increasing the dis- scholars who came to the United States from knowledge grew, it became increasingly dif- tinction and preeminence of our universities Germany in the 1930s remarked on the open- ½cult to assess the value of this work. Instead, and paved the way for the life-changing dis- ness of the U.S. system. Students could talk many university presidents embraced the coveries I cited above. However, I must also to professors, using their ½rst names, and growth of disciplines, which allowed them emphasize that these institutions are fragile. could volunteer to contribute ideas when to hand off the task of evaluating the qual- They periodically come under attack, and I not necessarily called on. The American ity of work to a set of peers in the appropri- believe they are threatened today. system was also far more open to opportu- ate academic disciplines. nities than the British system in the early *** twentieth century. All the factors mentioned above led to a so- cial compact between government, the uni- The great transformation of the American This vision of a new kind of university, fos- versities, and society. The government, on university took place in 1876. Johns Hopkins tered by the ½rst president of Johns Hopkins, the one hand, would provide resources and was built from a hybrid model based on ed- Daniel Coit Gilman, began to attract the in- –remarkably–autonomy from government ucational systems in Germany and England. terest of established and prospective schol- control. This is a remarkable concept: that Many nineteenth-century leaders in Amer- ars in the United States. Gilman, who was

28 Bulletin of the American Academy, Spring 2011 The Great American University government would give resources to univer- create their own criteria of excellence, in- schools or at the University of Chicago. sities, expecting certain things from them dependent of government or external po- Hutchins gave the legislative committee but trying to remain hands-off. Universities, litical ideology. Some nations still have not nothing short of a civics lesson when he for their part, would prepare people for more learned that this is a necessary condition testi½ed against the proposal. Indeed, he highly skilled jobs, produce better-educated for greatness. brought the whole commission to its knees, citizens who could participate in the demo- and the legislation, needless to say, never cratic process, and encourage the discover- It was not just a matter of values, however. passed. Hutchins initiated the tradition ies that have changed our lives. Exceptionally talented people were brought that believes universities must cultivate a into the system from around the globe. En- culture of open and free inquiry. He advo- *** lightened and bold leadership was extremely cated a meritocracy of ideas that is still important for recruiting talent in the early integral to the culture at the University of Of the dozen core values I discuss in The years. For example, no more than a decade Chicago. Great American University, four were central after he founded the University of Chicago to the developing university system. These in 1892–using Rockefeller’s money, in short James Conant, president of Harvard Univer- values were ½rst formulated during the En- order–William Rainey Harper, a tireless sity from 1933 to 1953, was also a champion lightenment and the growth of scienti½c recruiter with a truffle-hunting dog’s nose of meritocracy. The idea of meritocracy, knowledge that occurred, for example, in for talent, had made the University of Chi- however, wasn’t new: for example, Cornell seventeenth-century England. I should men- cago one of the top ½ve research universities opened with a broad sense of meritocracy tion that these values are represented as in the United States. Eventually, leaders such that invited women and minorities to the as Harper, Eliot, Gilman, Butler, and Andrew Sixty percent of all Nobel Prize Dickson White of Cornell University handed Because many of the brightest over their work to a new set of extraordinary winners in science since World leaders in the 1920s and 1930s. and most able young people War II have been Americans Beyond leadership, American universities throughout the world want to or foreign nationals working cultivated a strong belief in competition and enjoyed a high level of autonomy from the attend and work at them, our at American universities. state. Competition has played a central role universities may collectively in the development of quality in American ideals; to this day, they are not necessarily higher education; indeed, one might argue represent the only American entirely approximated. First was the value of that competitiveness among elite institu- industry that currently has a universalism, or meritocracy. That is, indi- tions today has reached problematic heights. viduals were to be judged on the quality of Academic free agency dates back to the for- favorable balance of trade. their work, not on the basis of any ascribed mation of the University of Chicago, when characteristics, such as gender, nationality, universities began to compete for outstand- University. Prior to his appointment, Har- social origins, or race. A second core value ing talent. After World War II, as unprece- vard had purged itself of its undergraduate was organized skepticism, or the incessant dented public resources were invested to population of Jews. Quotas were set to limit questioning of claims to fact and truth, build excellence in the university system, the number of Jewish undergraduates who which meant being open to radical ideas institutional autonomy endured; the im- could attend and remained in effect for many but conservative in determining the meth- pact of this government support was far years. Conant transformed the admissions odology needed to demonstrate the fact greater than what private philanthropy or system according to his belief that admis- value of those ideas. Third, universities foundations alone could have achieved. sions should be based solely on merit. He de- embraced the free and open communication Among the leaders who championed core fended the conviction that Harvard should of ideas, whereby secrecy, prior restraint, values in the 1920s and 1930s, two were ex- recruit students of talent, regardless of means censorship, and privileging certain kinds of traordinarily important. Robert Maynard or background. Thus, Conant, Hutchins, and knowledge were anathema to an open sys- Hutchins, president of the University of other university presidents of their genera- tem of communication on which knowledge Chicago from 1929 to 1951, was perhaps the tion de½ned these core values as essential to could be built. A fourth core value was free greatest champion of academic freedom the development of the university system. inquiry and academic freedom, which was and free inquiry in the history of American *** not to be viewed as a privilege but as foun- higher education. One anecdote is particu- dational to great universities. Free inquiry larly striking: During the McCarthy period, Why do I identify January 1933 as the inflec- was considered essential for releasing the the state of Illinois attempted to pass legis- tion point for the ascendancy of American imagination and challenging established lation that would have made it unlawful for universities? It would be a mistake to think orthodoxies and prevailing views in science a member or former member of the Com- that prior to that point there did not exist, and society. This principle lies at the heart munist Party to teach in Illinois public for example, a growing body of able young of the way universities are organized to

Bulletin of the American Academy, Spring 2011 29 Academy Meetings physicists in this country. The United States the vertical mobility of up-and-coming The United States became the had a great deal of young talent–people American academics, many of whom were who, when they traveled abroad, were fas- Jewish and came from underprivileged bene½ciary of the intellectual cinated by universities in Germany. But backgrounds. when they came home, they were in need migration from Europe that of leaders. In the early 1930s, a wave of im- Along with this infusion of talent, a new followed Hitler’s rise. migration provided the U.S. system with science policy was put in place after World new leadership. After Hitler came to power War II, laid out in Science, the Endless Fron- mit be the domain of universities. He argued in January 1933, the German university sys- tier. engineer Vannevar Bush (no re- for linking research to teaching missions in tem caved in. By April of that year, Hitler lation to the Bush clan of more recent his- the universities and laboratories. Today, we had purged, on ideological and religious tory), an instrumental ½gure in developing emphasize undergraduate education, but we grounds, the great leaders of the German scienti½c work to aid the war effort, was the often overlook the forming or curricular universities. primary author. President Roosevelt in- spired Bush to write the report by asking the teaching that takes place at universities in Contrary to what most people question: what will happen to American graduate laboratories. Not only are gradu- science, engineering, and technology after ate students contributing to the growth of think, the American research the war? Scientists who had developed the knowledge, but they are engaged in an in- ½rst nuclear weapons would leave Los Ala- teractive form of learning. In this way, the university is amazingly young, mos National Laboratory, somewhat dis- American system differentiates itself from and it is highly embedded in couraged by what they had achieved, to many other systems around the world. return to university settings, wanting to get After the war, two university leaders away from big science and the ½rst nation- the dynamics of the larger emerged as exemplars of two polarly op- ally organized scienti½c enterprise. What posed visions: one forward-looking, the American society. would happen then? other backward-looking. Frederick Ter- This turn of events, while catastrophic for Bush, who was Roosevelt’s advisor, said, “It’s man, provost of Stanford University from German universities, was a great boon for going to be a complete disaster.” “Well, let’s 1955 to 1965, was perhaps the greatest pro- American institutions. The United States do something about it,” Roosevelt replied. vost in the history of American higher edu- became the bene½ciary of the intellectual With some help from committees assigned cation. A student of Vannevar Bush, he ran migration from Europe that followed Hit- to various tasks, Bush produced the prescient, the antisubmarine laboratory efforts at ler’s rise: 50 percent of theoretical physicists brilliant, and extraordinarily consequential Harvard during the war but spent the rest emigrated; 25 percent of German particle policy document. First, he advocated for the of his career at Stanford. He envisioned physicists left. These brilliant thinkers in- creation of a National Research Foundation, how universities would be reorganized and cluded physicists Albert Einstein, Hans a government-endowed, independent or- restructured, and he capitalized on that Bethe, and Enrico Fermi; physicist-turned- ganization that would subsidize fundamen- vision. For example, Terman and Stanford biologist Leó Szilárd; father of molecular tal research in science and engineering–pure President Wally Sterling moved the univer- biology Max Delbrück; sociologists Paul science, in particular–after the war. That sity’s medical school from San Francisco to Lazarsfeld and Theodor Adorno; writers idea morphed into the National Science the Stanford campus in Palo Alto. This Thomas Mann and Bertolt Brecht; archi- Foundation, which was formed in 1950. happened in the late 1950s, three or four years after Watson and Crick discovered tect Mies van der Rohe; composer Béla dna Bartók; and the father of psychoanalysis Beyond leadership, American the double-helical form of . Terman and his wife, Sigmund and Anna Freud. realized that the future of medicine was Some came from Germany, others from universities cultivated a strong linked to genetics and biology and had the Hungary, Italy, and those countries most foresight to directly connect the biological affected by Hitler’s regime. The existing belief in competition and sciences with medicine and its applications. disciplinary communities largely decided enjoyed a high level of Though the move was costly–four build- where the thinkers ended up: that is, they ings at the price of $12 million–it turned determined which university would most autonomy from the state. out to be a huge success. bene½t from each scholar’s potential for Once that project was under way, Terman leadership, based on who was already work- Perhaps even more important, Bush argued turned to recruiting. He predicted increas- ing on certain issues at that institution. cogently for the use of public money to sup- ing relationships between industry and the These placements created a new and ex- port research at universities–in essence, out- universities; he strengthened engineering traordinary chemistry between thinkers. sourcing research and knowledge production disciplines; and he oversaw the creation of American universities bene½ted, on the to universities rather than state-controlled the Center for Advanced Study in the Behav- one hand, from the horizontal mobility of agencies or institutions. A system of peer ioral Sciences, which would bring social sci- émigré scholars and, on the other, from review, as a measure of quality, would also entists to Stanford. He was clever as hell.

30 Bulletin of the American Academy, Spring 2011 The Great American University Image © Corbis Image courtesy of the Barbara McClintock Papers, American Philosophical Society Barbara McClintock Vannevar Bush

He wanted to recruit young and talented pact on their local communities and states. riate is characterized by a state-employee people and bring them in on the cheap. As Stanford is one of the few that does, and mentality that does not exist in American a member of the National Academy of Sci- the University reported in 2008 that faculty state universities. Furthermore, some coun- ences, he had access to the ballots of all the members, students, and alumni have found- tries have set up systems of internal com- young people being nominated to the Acad- ed more than 2,400 companies. A subset, petition with their own universities. For emy. He looked for all those who just missed including Cisco Systems, Google, and Hew- example, French elites want to send their the cutoff and did not get in, and he went lett-Packard, generated $255 billion in total kids to the École Normale Supérieure, the after them. He brought them to Stanford; revenue among the Silicon Valley 150 in École Polytechnique, and the other grandes they eventually got elected to the Academy; 2008. mit also tracks its economic impact: écoles, which are far more prestigious than and they became leaders in their ½elds, with in 2008, it reported approximately 4,000 French public universities. In Germany, the many of them receiving Nobel Prizes. mit-related companies that employ 1.1 mil- state-run universities are second to the Max lion people and have annual world sales of Planck Institutes, which are run by the In contrast to Terman’s forward-looking $232 billion–slightly less than the gross do- central government, are not involved with style, the preeminent historian Jacques mestic product of South Africa and Thailand, teaching, and offer better salaries and re- Barzun, dean of faculties and provost of which means that mit companies form one sources for research. Such internal compe- Columbia from 1958 to 1967, favored a re- of the forty largest economies in the world. tition makes countries less competitive turn to Cardinal Newman’s university of Moreover, this reporting does not account globally. the 1850s. He wanted universities to remain for the multiplier effect: it is not just the sanctuaries, or cloistered enterprises, and companies, but the services to those com- In Europe, the flow of talent is outward, at was wary of the government’s increasing panies, that creates jobs. the moment. The systems there are struc- involvement with the research university. turally rigid and do not allow young people Thus, Columbia resisted new developments, *** to shift their interest or attention to new undergoing a period of relative stagnation. topics. Research and teaching missions are Columbia resisted the growth of laboratory At present, the United States has the great- separate. Take, for example, the French life and industry-university relations, which est system of higher learning in the world, National Center for Scienti½c Research were anathema to Barzun. especially at the level of elite universities. (cnrs), which is somewhat comparable That said, one threat many people fear is to the U.S. National Science Foundation or Terman’s vision laid the foundation for global competition, or the perception that the National Institutes of Health. Scientists Silicon Valley. He didn’t originate the term, Chinese and European competitors could at the cnrs have tenure the ½rst day they but he did originate, on campus, the work overtake American universities. This sce- step into the laboratory. There is no real of Hewlett and Packard, for example. He nario is not imminent. Although some coun- form of accountability or quality review. gave them some space in one of his garages, tries have enormous potential for building Many people run businesses on the side where they built the ½rst elements of their human capital, the state-controlled systems while they hold their cnrs appointments. company. Today, too few universities look, in Asian and European nations are impeded Moreover, initiating reform in this and in a systematic way, at their economic im- by an absence of competition; the professo- other similar societies is dif½cult.

Bulletin of the American Academy, Spring 2011 31 Academy Meetings

There is another, equally important dimen- bacteria from Tanzania and was developing as well as colleges and universities–that sion to this discussion: we should not fear antibiotics that might be used to defend we are in jeopardy of losing the source of global competitors. Foreign competition against bioterrorist acts. He was arrested great talent that has come from abroad. would be good for the American system and indicted on sixteen charges for violat- In fact, 93 percent of public school students and the growth of knowledge. Even if the ing the patriot Act. The fbi searched in the ½fth through eighth grades in the United States did not boast 80 percent of his laboratories, lab notebooks, and tax United States are taught the physical scien- the top 20 universities in the world, we records–then added ½fty additional charges ces by a teacher without a degree or certi½- would still have enough. Increased global to his case. Eventually, he was ½red from his cate in the physical sciences. In addition, competition would mean more universities government investigators have endeavored contributing to the growth of knowledge, Today, too few universities to review and potentially restrain the publi- to ½nding cures for diseases, and to advanc- cation of biology papers, thereby violating ing the welfare of a nation’s people. Many look, in a systematic way, at the principle of open communication. such accomplishments would be transfer- their economic impact on their There has been increased surveillance in able across national borders. university libraries; outside investigators local communities and states. do not have to show probable cause to search *** library records and computer ½les, and librar- If not global competition, then what are university. Despite the fact that the jury ex- ians are not permitted to inform individuals the threats to the American university? To onerated him on all but one minor charge that they are the object of investigations. related to the patriot Act, he was convict- paraphrase Walt Kelly’s wonderful cartoon External to the universities, the politiciza- character Pogo, “We have met the enemy, ed of tax evasion, among other infractions, and was sent to jail for nine years. (The sen- tion of science and the resurfacing of anti- and he is us.” In the United States, govern- intellectualism in America have further ment ideology intrudes into the research tence was later reduced to two years.) He had to pay his university $250,000 in ½nes. imperiled important research. The next processes of the universities, especially in stage of embryonic stem cell research has moments of national crisis. During World The consequences of such actions, which been delayed by controversy over whether War I, professors who spoke out against the are little known to the wider public, led to develop new cell lines. Global climate draft were ½red; tenure did not hold much Cornell physicist Robert Richardson, recipi- research is slowed by government efforts force at the time. Other perceived dissidents ent of a Nobel Prize, to disclose the effects to censor scienti½c reports by prominent were ½red during the Red Scares of the 1930s of the patriot Act on research at Cornell. climatologists such as Jim Hansen, whom and 1940s. Recent attacks on universities Before the legislation was passed, Cornell the Bush administration attempted to muz- had thirty-eight laboratories studying dis- zle from giving talks because his views dif- American universities bene½ted, ease- and scourge-causing agents. After two fered from its of½cial policy and ideology. on the one hand, from the years with the Act in force, and after a num- In a dramatic effort to promote abstinence- ber of experiences like Thomas Butler’s, only sexual education, the Bush administra- horizontal mobility of émigré only two such labs remained. According tion dismantled Centers for Disease Control to Richardson, “We’ve got a lot less people scholars and, on the other, working on interventions to vaccinate Anti-terrorism legislation has from the vertical mobility of against smallpox, West Nile virus, anthrax, and any of the 30 other scourges.” Thus, inhibited research. It has also up-and-coming American anti-terrorism legislation has in fact inhib- ited research. It has also influenced the influenced the composition academics. composition of university laboratories. A of university laboratories.... student from Iran–deemed to be a country go beyond academic freedom of speech to that supports terrorism–cannot so much The government is telling fac- target the research mission itself. Anti- as walk into a laboratory that is doing re- terrorism legislation, speci½cally the usa ulty whom they can have as patriot search with select agents without placing Act of 2001 and the Public Health the faculty member in charge of that labo- graduate students and whom Security and Bioterrorism Preparedness and ratory at risk of criminal indictment and Response Act of 2002, contains provisions punishment. Consequently, the government they can hire. that influence and can curtail scienti½c re- is telling faculty whom they can have as search. graduate students and whom they can hire. and Prevention websites on reproductive The case of Thomas Butler is an interesting health that mentioned condoms as a method Another major factor is restrictive visa for preventing the spread of hiv. The peer- example. Butler was one of the nation’s policies. The United States produces so few leading immunologists working on plague. review system is also at risk, as efforts to science and technology majors–certainly name political appointees to the National For twenty-½ve years, he had transported not enough to staff both K–12 programs

32 Bulletin of the American Academy, Spring 2011 The Great American University

Peer Review Committees structural ability to adapt to the free explo- threaten the system’s integ- sion of new knowledge. For example, de- rity. In recent years, scholars spite movement toward interdisciplinary have come under attack for work, the sense of control and power that expressing non-dominant is locked into individual schools and de- views that challenge Ameri- partments inhibits the pursuit of knowl- can foreign policy. edge via multidisciplinary study. Can the university adapt, as any organism must It is also possible that a lack adapt, to environmental changes? of funding will dismantle public universities in this A fourth problem is that the rich are getting country. The University of richer in this country, not only in the gen- California, which has long eral population but in universities, too. provided access, opportunity, Fifty years from now, perhaps ½ve or ten and research quality in one universities will have substantial endow- system, is being starved at ments that double at the same rate as every- the moment. California legis- one else’s endowment–roughly seven to ten lators who are voting for this years. If Harvard’s endowment is roughly starvation policy do not seem $30 billion, in seven to ten years it becomes to appreciate its cascading ef- $60 billion, then $120 billion. Columbia’s fects. If the university system endowment of $7 billion doubles to $14 bil- begins to lose faculty mem- lion, then $28 billion. Eventually, the dis- bers who are great scholars parity between great universities and those and scientists, it will lose with far smaller endowments than Colum- great graduate students as bia, the University of Pennsylvania, mit, well as federal and other Chicago, or Boston University will have forms of research money. real consequences. Will smaller universi- It will have poorer teachers. Robert K. Merton (Image © Sandra Still) ties simply become farm systems for a It will not produce the spin- handful of universities that will become off companies that influence and lead to in- Second, even in universities that foster the Oxfords and Cambridges? Will real novation and new high-technology jobs in open discourse and a marketplace of ideas, competition be lost, especially in the high- the local and national economies. The state there is a tendency to gravitate toward in- priced, expensive ½elds? of California is not alone in its efforts to cut tellectual orthodoxy. If we are honest, there spending, but it provides one example in are certain things we just don’t talk about How do we prevent the skewing of wealth? which legislators overlook the fact that it is openly, even at the great universities. We I would not support taxation, or the shar- in½nitely harder and far more costly to re- hear most about a culture of resistance to ing of revenues–aside from laboratory build lost excellence than to maintain it. new ideas on the social, political, and hu- work–among the various schools. That manistic levels, but it goes on in the sci- would prove disastrous, but some mecha- Universities themselves are not immune to ences, too. New and radical ideas are not nisms need to be found to keep the compe- internal challenges. First, the commercial- acknowledged, and orthodoxy tends to tition among our great universities alive. ization of intellectual property has eroded hold forth. The truth is that there is not a (As poor as Columbia’s football program scholarly impartiality. One hundred years huge amount of intellectual courage in has been over the years, I don’t think Har- ago, scholars and scientists believed they American universities. There’s not a great vard is interested in giving us money to im- should not pro½t from their discoveries. deal of it anywhere, but we certainly don’t prove it–or to make us more competitive Today, that norm has become obsolete. have a superabundance. There is no impulse, with them in places where we are competi- Most great universities foster the use of as Max Weber said, to recognize and teach tive, such as neuroscience or art history.) intellectual property for good, productive inconvenient facts or possibilities. While I believe that President Obama un- reasons, following the Bayh-Dole Act of derstands the full scope of the university’s 1980 and its 1982 amendment. But given the Third, we have problems with the struc- mission, thus far I am disappointed by what real and potential conflicts of interest that tural balance required for innovation and he has been able or willing to do. Certainly, have been exposed, how do universities re- excellence. Some of the old structures, nothing has changed with the anti-terror- formulate a balance that reinforces essen- which have been in place for a hundred ism legislation. In fact, in some ways the ef- tial norms and institutional core values years, are becoming fetters on the growth fects have worsened. The stimulus package while using intellectual property for the of knowledge. Information expands much was bene½cial, but one-time funding is not bene½t of society? more rapidly than does the university’s the same as base funding. The average age

Bulletin of the American Academy, Spring 2011 33 Academy Meetings of researchers in the medical and biomedical Question We have not been good at sciences who receive ½rst-time R01 grants is forty-three; younger scientists cannot Could you speak briefly about the challenges articulating in a persuasive operate laboratories independent from that face the social sciences and humanities? their mentors. Those strictures must be Jonathan Cole way the multiple missions attacked if we are going to remain extraor- and the achievements of dinary and strong. We cannot deal with the sensibilities of being human, of making moral and ethical choices, our universities. There are good reasons to believe the United without an education in the humanities. States should be able to maintain its domi- Increasingly, even large-scale science proj- We are becoming an increasingly diverse nant position among preeminent research ects employ philosophers and ethicists who society; soon, a majority of the population universities. We should not fear foreign are actively engaged in some of the problems will be members of minority groups. If we competition, which I believe is not immi- that arise, for example, in the ½elds of nano- do not begin to tackle persistent disparities, nent and, at any rate, will be good for the technology and nanoscience. A great uni- we will face mounting problems, especially international system of higher learning and versity necessarily integrates the humanities, in the areas of science and technology de- for the growth of knowledge once it emerges. the arts, and the social and behavioral sci- velopment. Beyond supporting historically I also believe that there continues to be ences. This issue is not adequately addressed black colleges, a much bolder plan is needed enormous, unrealized potential in the in my new book, but it is critical to the suc- to sustain the quality of American universi- American system. Not all threats are ab- cess of any enterprise seeking greatness. solute; many simply slow down the rate of ties. In The Race Between Education and Tech- improvement. I am interested in the slope nology, Harvard economists Claudia Gold- of that line: does it continue on an upward If the university system begins man and Larry Katz argue that the United trajectory or flatten horizontally? There are to lose faculty members who States has excelled in education and tech- choices to be made. If we follow the path nology development in part because it has taken by many states in dealing with their are great scholars and scien- a record of being open to social mobility great universities, the American education and education at the mass level since the system may lose its luster. That is the great tists, it will lose great graduate beginning of the twentieth century. Histor- test we face, and whether we will pass re- students as well as federal and ically, as more people ½nished high school mains an open question. and college, they acquired the skills neces- other forms of research money. sary for jobs in a technological society. We have since lost that edge to European and Question ... It will not produce the spin- other nations that have opened up their European bureaucracies can engage in large systems signi½cantly. It is not clear that our scienti½c projects more effectively than the off companies that influence K–12 schools, or even many of the under- American bureaucracy. Is this difference a and lead to innovation and new graduate programs around the country, threat? can ensure a labor force–as envisioned by high-technology jobs in the Vannevar Bush in Science, the Endless Frontier Jonathan Cole local and national economies. –equal to the task of succeeding in the While this may be true, it seems to me that knowledge-based twenty-½rst century. American scientists are deeply implicated in the very large European projects, as they Question Question should be. On the more general level, bu- This week, Barack Obama named the his- Could you elaborate on the elements of the reaucratization of the university, in terms torically black schools as a key segment of post–World War II educational policy that of big–almost global–science, is an im- our educational system that he wants to in- you ½nd most attractive? Would these ele- portant problem that we face. Universities vest in. What role do you think those schools ments still be useful today? add bureaucracy after bureaucracy; the bu- will play in Obama’s interest in the future reaucracies are linked to interest groups; of education? Jonathan Cole and the interest groups are stakeholders in the university. It becomes increasingly dif- Jonathan Cole Historians of education often muse on the ½cult for university leaders to move in any “golden age” of higher education: the 1960s Supporting historically black schools is direction without facing opposition to al- enjoyed the aftermath of Sputnik and the important. Their graduates have a much most any idea that they have. The bureau- infusion of increased federal expenditures higher probability of going on to graduate cratization and the change in scale of the in science and technology laboratories and school and becoming members of faculties. university indeed represent threats. research. I’m skeptical about “golden ages.”

34 Bulletin of the American Academy, Spring 2011 The Great American University

The same historians who nostalgically look trees; we do not give people the broader back on the Golden Age of funding during picture of the forest in which the trees are the 1960s often forget to mention that the embedded and why it is important to pre- campuses were torn asunder by ideological serve the forest. disputes, including over the war in Vietnam. Campuses were not harmonious systems © 2011 by Jonathan R. Cole where everyone joined together under com- mon values and common objectives. The Jonathan R. Cole, The Great American Univer- policies that were represented in postwar sity: Its Rise to Preeminence, Its Indispensable science policy were instrumental over the National Role, Why It Must Be Protected long run in differentiating the American (PublicAffairs, 2010) system of higher learning and had an enor- mous positive effect on the growth and quality of universities here. But once set in motion, these policies did not determine a golden age.

Question Why have research universities been unable to increase awareness among the broader educated public about the bene½ts univer- sities bring to culture and society, whether in the sciences or the humanities? What can members of the university community do to increase awareness among the broad- er public? Jonathan Cole Many leaders of American universities spend seventeen hours a day solving imme- diate problems and lack the luxury of time. That said, I think they ought to begin to make this case wherever they can in what- ever way they can. Part of the reason for my particular point of view in the book was to address the reality that few people out there –including members of Congress and state legislatures–really understand that under- mining the quality of universities equates to turning off a pipeline that is essential for national excellence and for the upward tra- jectory of the quality of life in American so- ciety. We have not been good at articulating in an offensive way the multiple missions and the achievements of our universities. Instead, we have played defense against highly esoteric matters, such as indirect cost recovery or claims relating to conflicts of interest. We have failed to realize what mathematician and philosopher Alfred North Whitehead called the “fallacy of misplaced concreteness.” We focus on the

Bulletin of the American Academy, Spring 2011 35 Academy Meetings

The Financial Crisis and Economic Policy

Presentations by Benjamin M. Friedman and Robert M. Solow Comments by Peter Temin Introduction by John Y. Campbell

1961st Stated Meeting, held at the House of the Academy on November 10, 2010

precedented step, and it is a sign that both Second to speak will be Robert Solow. Bob the United States and the world economy is Institute Professor Emeritus at MIT and are facing exceptional problems as a result a giant of the economics profession. In of the global financial crisis that developed 1961, he was awarded the John Bates Clark and unfolded from 2007 to 2009. Crafting Medal of the American Economic Associ- effective monetary and government strate- ation. In 1987, he received the Nobel Prize gies to get growth back on track is a chal- in Economics, in recognition of his contri- lenging task. butions to the theory of economic growth. In 1999, he received the National Medal of The Fall 2010 issue of Dædalus, edited by Science for his creation of the modern Ben Friedman and Bob Solow, dissects the framework for analyzing the effects of in- causes of the collapse and the impacts that vestment and technological process on government policy can have both before economic growth. Bob is also well known such an event and in its aftermath. The is- for his wit. I vividly remember attending a sue’s authors approach this subject from a conference at which he discussed a paper variety of scholarly perspectives, including that was rather indiscriminate in its use the law, political science, economics, and of assumptions. Bob compared the paper finance. to a ride on the New York subway, with as- Our first speaker is my colleague Benjamin sumptions getting on at one station and John Y. Campbell Friedman, who is the William Joseph Maier then off at the next as new assumptions Professor of Political Economy at Harvard got on . . . and so forth down the line. Bob John Y. Campbell is the Morton L. and Carole University and the author or editor of thir- is a long-standing Fellow of the American S. Olshan Professor of Economics and Chair teen books, including The Moral Consequences Academy, and when I say long-standing, I of the Department of Economics at Harvard of Economic Growth (2005). His Day of Reck- mean that he has been a Fellow since 1956, University. He was elected a Fellow of the Ameri- oning: The Consequences of American Economic two years before I was born. can Academy in 2000. Policy under Reagan and After (1988) received We have also with us tonight one of the the George Eccles Prize for Excellence in contributors to the Dædalus volume, Peter Introduction Economic Writing from Columbia Uni- Temin. Peter is the Elisha Gray II Profes- versity. Ben is a director of the National sor Emeritus of Economics at MIT. He is Within the past week, we have seen not Council on Economic Education and an well known for his influential books on only a national election but the announce- advisor to the Encyclopaedia Britannica. American economic history, including ment that the Federal Reserve Board will He is also a predecessor of mine as Chair themes of slavery and industrialization in take extraordinary new measures to stim- of the Harvard Economics Department the nineteenth century and two books on ulate the economy and job growth by buy- and in fact recruited me to Harvard. Ben the Great Depression. Peter has served as ing $600 billion in long-term treasury se- has been a Fellow of the American Acad- President of the Eastern Economic Asso- curities through the first half of next year. emy since 2009. ciation and the Economic History Associ- The program is known as “quantitative ation. A Fellow of the American Academy easing round two,” or qE2. This is an un- since 1986, Peter’s essay in the Dædalus volume is “The Great Recession and the Great Depression.”

36 Bulletin of the American Academy, Spring 2011 The Financial Crisis and Economic Policy

capital. In an economy like ours, we de- its capital allocation mechanism doing its vote approximately 20 percent of what job well and at a cost that the economy we earn and produce to investing for our can afford? economy’s future. Nobody decrees that 20 percent is the right share of what we When we talk about the economy’s prob- produce, and no central authority decrees lems and the recent financial crisis, we how that 20 percent ought to be allocated. mostly talk about the losses that various The decisions that determine how much investors have incurred on the paper as- goes into business equipment, into ma- sets that they hold. People’s stocks lost chinery, into new factories, into new houses, value. People’s mortgages defaulted. or to this industry rather than to that one Banks took losses. The key thing to keep are instead the result of the countless daily in mind is that the losses incurred on pa- decisions made, on one side, by individu- als, families, and firms that are bringing The question I think we are their funds to the market to be put to work now entitled to ask–indeed, in banks or mutual funds or through direct investment, and, on the other side, by in- are obligated to ask after the dividuals, families, and firms that are com- ing to the market to be financed. Alloca- experience through which we Benjamin M. Friedman tion of the economy’s capital is what our have just lived–is whether our financial markets do. Benjamin M. Friedman is William Joseph Maier economy is being well served The financial system also provides other Professor of Political Economy at Harvard Uni- services that are valuable. But I highlight versity. He was elected a Fellow of the American by our financial system. the allocation of the economy’s capital be- Academy in 2009. cause for all of the financial system’s other per assets are merely the financial reflec- functions–for example, running the pay- tion of what is happening in the real econ- A person would have to have been living ment system (making sure that when you omy. The fact that losses occurred means in a closet not to understand that some- write a check the money gets to where you that assets were mispriced and resources, thing very wrong happened to the U.S. want it to go); allowing families to save therefore, were badly allocated. For exam- economy and to the broader world econ- for their retirement or have liquid funds at ple, the fact that mortgage interest rates omy over the past several years. We are all their disposal; and providing insurance– were so low and lenders were so willing to aware as well that much of what went wrong advance mortgage credit on a no-money- has to do with events within our financial I take the role of the financial down and no-documentation basis meant system. Not surprisingly, these events, un- that millions of Americans built and bought fortunate as they were, have touched off markets in a free-enterprise houses that now stand empty. These houses an enormous public conversation about were not costless to build. They used in- what we can do to ameliorate the conse- economy to be one of allocat- vestment capital that could have been al- quences of such events, as well as what we ing the economy’s scarce invest- located elsewhere. Maybe new airports, can and should do to prevent such events maybe new industries, maybe new research from happening in the future or at least to ment capital. facilities. These houses also took labor lower the probability of their happening that could have been allocated to other ap- again. we have well-established alternative mod- plications. What happened with the hous- els that don’t run on a free-enterprise ba- ing and mortgage market was not unique, I sympathize with this line of conversa- sis. Government knows how to do those either. A similar event occurred ten years tion and the public debate to which it has things. The one thing our financial markets ago, when we had the high-tech bubble in given rise. My concern, though, and this is are doing that is important and specific to the stock market. The overpricing of tech the direction of my own contribution to a free-enterprise economy is allocating our stocks, especially in the communications the Dædalus volume, is that something economy’s capital. industry, meant that these firms were able more fundamental needs to be addressed, to raise money to invest in assets–for ex- and the public conversation has not done The question I think we are now entitled ample, fiber optic cable lines–that then that yet. to ask–indeed, are obligated to ask after became worthless. The United States now the experience through which we have I take the role of the financial markets in a has tens of millions of miles of fiber optic just lived–is whether our economy is be- free enterprise economy to be one of allo- cable that have never been lit and presum- ing well served by our financial system. Is cating the economy’s scarce investment ably never will be lit. Why? Because the

Bulletin of the American Academy, Spring 2011 37 Academy Meetings

financial market didn’t do its job correctly when pricing the stocks of these commu- nications firms. Financial markets are supposed to allocate an economy’s capital. This is their funda- mental function in an economy like ours. They are supposed to determine how much capital goes to fiber optic cable, how much goes into new manufacturing facilities, how much into automobile plants, how much into new apartment buildings. The recent evidence, however, indicates that the finan- cial system has been making big mistakes. Financial markets are supposed to allocate an economy’s capital. This is their fundamental function in an economy like ours.

We also need to ask how much it is costing us to operate this financial system that al- locates our capital. The answer is a lot. The newspapers have emphasized the fact that the share of all profits earned in the economy–in other words, the share of the returns on the capital being invested– that gets siphoned off to pay for the mech- anism that does the allocating has been rising dramatically. Thirty years ago, the cost of running the financial system was 10 percent of all of the profits earned in America. Fifteen years ago, the financial system cost somewhere between 20 and 25 percent of all profits earned in America. In the first half of this decade, before the cri- sis hit, running the financial system took one-third of all profits earned on invest- ment capital. Moreover, the profits earned by financial firms represent only one part of what it actually costs us to run the finan- cial system. Financial firms pay salaries and bonuses and rents; they have advertising budgets, travel budgets, and so on. Maybe the financial system really could not allo- cate capital adequately without hours and hours of advertising during primetime tel- evision. If so, that merely means that the function of allocating capital is all the more

Photograph © Paul J. Richards/AFP/Getty Images expensive. Maybe, too, we couldn’t allocate Foreclosure sign in front of a townhouse in Herndon, Virginia, November 22, 2007 capital without banks, hedge funds, and

38 Bulletin of the American Academy, Spring 2011 The Financial Crisis and Economic Policy asset management firms taking up much a system. But that is not the benchmark we of the prime real estate in Manhattan. But should have in mind. Instead, we should if that is also true, then it simply means be asking questions such as, what if our that the cost of this activity is all the financial system were smaller, as it was higher. thirty years ago? What if some particular part of our financial system didn’t exist? The time has come for a serious Would we really be allocating capital any differently if the firms that engage in super- evaluation of the costs and high-speed trading didn’t exist? Would we be allocating capital any worse if minute benefits of running our finan- departures of prices from their true value cial system. were resolved in two nanoseconds instead of four nanoseconds? I don’t think we would. But the cost of operating those As someone who teaches undergraduates firms–including not just the profits but at the local university, I must say that the the salaries, bonuses, rents, the travel most obvious cost to me is the fact that so budget, and so on–is a major levy against many of our best undergraduates go off what we could otherwise do with our re- into the financial world, where they par- sources. How about the market for what ticipate in this process. These are people are called collateralized debt obligations Robert M. Solow who could be doing something else. If it is (cdos), a type of derivative? Has our econ- necessary to have that share of our nation’s omy operated better because of the existence Robert M. Solow is Institute Professor Emeritus best talent engaged in the allocation of of these obligations? Does anybody think at the Massachusetts Institute of Technology. our economy’s capital, then so be it. But they are worth what this market costs us He was elected a Fellow of the American Acad- if that is so, it means that this process is to operate? I don’t think so myself, but I emy in 1956. costing us, in terms of resources used, a don’t have much more than a guess. What great deal. we need is some serious evaluation. One of the intellectual merits of the Fall In my contribution to the Fall 2010 Dædalus 2010 issue of Dædalus is that it focuses so volume, I suggest the time has come for a We need to ask how much it strongly on the fact that the financial sys- serious evaluation of the costs and benefits is costing us to operate this tem justifies itself, justifies its existence, of running our financial system. Under- only to the extent that it makes the real standing the cost is itself a major enter- fi nancial system that allocates economy operate more efficiently. Finance prise, which no one has yet done. We sim- has its charm and its excitement. Large ply don’t have, to my knowledge, an all-in our capital. The answer is sums of money are made and lost in a estimate of the cost of allocating our econ- a lot. hurry. The Boston Globe entertainment sec- omy’s capital. We know what the profits tion recently had an article noting that ten are. We have some notion of the salaries. I do have some suggestions for policies movies about Wall Street, about finance, But we don’t know the overall cost. We that we could pursue in the interim, but are now in circulation. I do not recall a need to undertake a major project to un- what we most need is a serious project– single movie about the index of industrial derstand the costs involved in the alloca- perhaps even an American Academy proj- production. One wants always to focus on tion of the economy’s investment capi- ect–to evaluate both the costs to run our this question of what is the financial sys- tal–including, especially, the costs of the financial system in its current form and tem doing for the real economy. Its charm occasional disruptions to which our cur- the benefits we get from it in terms of the is beside the point. rent system exposes us. This is difficult to allocation of capital. Once something Ben raised the question of how efficiently do empirically, but at least it is conceptu- costs more than the benefits it generates– the financial system performs its function. ally straightforward. whether that something is a car or a man- To his list of examples that might cause ufacturing facility or a financial system– The harder part of the assignment is to one to wonder whether the system is as the time has come to change it. In view of evaluate not the costs but the benefits. efficient as it might be, I would add credit what seems to be an erosion of the effec- The problem lies in establishing some default swaps. The total nominal value of tiveness of our economy’s capital alloca- benchmark against which to understand credit default swaps in the United States tion mechanism, together with the clear how well our economy’s allocation of cap- two years ago was estimated–although I increase in costs, the time has now come ital is doing. Compared to what, though? have no idea how–to be something like to evaluate the question seriously. To a Soviet-type or Maoist-type central $60 trillion. The gross domestic product planning mechanism? There the answer is (gdp) of the United States at the time was clear. We are doing well compared to such

Bulletin of the American Academy, Spring 2011 39 Academy Meetings

We have learned that a have learned from our very recent financial can lead to real damage–first of all, to history, financial systems of a sufficient financial institutions. Such markets may financial system of our kind degree of complexity and size contain a not correct themselves but may in fact large potential for instability. All these magnify disturbances as they occur. tends more and more to re- complex, risky assets–about which you semble a casino. More and may understand only a little more than In an unregulated or lightly the person with whom you deal–provide more it tends to create risks an irresistible temptation for leverage, for regulated financial system like borrowing–sometimes to borrow short ours–and on the scale and rather than allocate risks. term in order to purchase risky assets, of- ten at the long term. Financial institutions complexity of our system–the about $14 trillion, and productive capital borrow from one another to acquire com- stock was maybe two or, at most, three plex, risky assets. If you are a financial in- danger of instability is always times that. One wonders about how much stitution, you may not understand your present. of the $60 trillion consisted of insurance creditor’s balance sheet. You may not un- against the risks that arise in the real econ- derstand the balance sheet of the people omy and how much consisted simply of to whom you have loaned. But if you don’t Once large-scale damage to the financial gambling, of bets, of wagers on whether understand their balance sheet, then you system is in the offing, the system can lose A would default on its obligations to B. don’t understand your own balance sheet. its capacity to perform the real functions The recent crisis has provided a lot of evi- that God created it to perform: to lend to We have learned that a financial system of businesses, to allocate savings, to provide our kind–and learned this most especially dence that lack of understanding has been widespread. liquidity, to provide diversification possi- after the computer revolution and the bilities to savers. In an unregulated or growth of financial engineering–tends lightly regulated financial system like more and more to resemble a casino. More Like most human enterprises, ours–and on the scale and complexity of and more it tends to create risks rather finance is subject to diminish- our system–the danger of instability is than allocate risks. In the course of doing always present. The system is not always this, it generates enormous complexity, ing returns, so it is capable of self-correcting. From day to day it is, but including many complex assets that are there come occasions when it is not. hard to evaluate. Highly complex assets becoming too large. As we invite asymmetries of information and The natural response to such occasions is asymmetries of understanding and there- have learned from our very to regulate, to forbid the most dangerous fore offer opportunities for enormous recent financial history, finan- activities, to limit sharply the leverage, profits. However, operations like this add perhaps to disallow the most complex little to the efficiency of the real economy, cial systems of a sufficient kinds of assets. However, as we have seen to the volume of valuable, real output that in the wake of our recent financial crisis, our economy or the world economy is able degree of complexity and size this is not easy to do. Indeed, the possibil- to generate out of its resources. contain a large potential for ity of adequately regulating a financial system like ours is slim, and for two rea- By the way, all this stuff about how the instability. sons. First, the industry is politically pow- financial system is supposed to improve erful; it lobbies on an extremely large the efficiency of the economy is not just scale and spends its considerable sums of “blah blah blah”; it is, in fact, real. We Keep in mind that this kind of situation is difficult to avoid in any modern industrial lobbying money nonideologically to pro- would not do well with a barter economy. tect its chances of earning large incomes. Careful studies have been made of emerg- economy and is almost inherent in the idea of limited liability, without which an In a politically polarized environment, the ing economies, economies that are grow- lobbying arm of the financial industry can ing into the modern industrial world, and elaborate, real economy like ours could not exist. In an economy with limited lia- be very effective indeed. One of the arti- the data make clear that financial depth– cles in the Fall 2010 issue of Dædalus (“Po- some level of nontrivial financial infrastruc- bility, a highly leveraged owner of risky assets can lose only the equity. If things go litical Fortunes: On Finance and Its Regu- ture–actually does promote efficiency and lation,” by Nolan McCarty, Keith Poole, growth in emerging economies. well, though, the amount of gain is almost unlimited. The possibility of highly lever- Thomas Romer, and Howard Rosenthal) is Like most human enterprises, finance is aged, complex asset structures not fully about the political economy of regulation, subject to diminishing returns, so it is ca- understood by anyone–certainly not by and I strongly recommend the essay to pable of becoming too large. When that many of the participants–thus offers the you. happens, a second danger arises. As we possibility of instability. Any adverse event

40 Bulletin of the American Academy, Spring 2011 The Financial Crisis and Economic Policy

I am inclined to think that the Reserve System thought they had recovery well enough in hand that they could each problem of how to regulate tighten up in their appropriate ways. So they did, and the result was a sharp recession in the financial industry has no 1937–1938. That ideology is slightly danger- neat solution and that having ous at the moment. multiple lines of defense–lots Discussion of regulatory bodies, even if John Campbell they get in one another’s way Bob and Ben have both expressed some –is probably a good idea. skepticism that the U.S. financial system is socially productive enough to justify its high costs, whether you measure those by The second reason why regulating a com- bank profits or the high pay of bankers or plex financial system is so difficult is that, the flow of talented young people into the regardless of what laws are passed, achiev- industry. I think that is an important and ing effective regulation is extremely dif- good question that needs to be asked. But it ficult. The regulatory capacity of our po- raises a further question: if the financial litical system is not that great. The regu- Peter Temin system is too expensive, how has it per- latory competence of the system is also suaded market participants to pay its bills? not that great. Regulatory competence Peter Temin is Elisha Gray II Professor Emeri- One can think of a few possible answers. cannot keep up with the industry. Indus- tus of Economics at the Massachusetts Institute try salaries are much higher than regula- of Technology. He was elected a Fellow of the One line of thought would argue that the tors’ salaries. Industry attracts the best American Academy in 1986. customers are suckers. An analogy can be people from your university and mine. made to bank overdraft fees, which have And industry keeps pushing the envelope. In my contribution to the Fall 2010 issue recently been regulated. Many people Regulation has an extremely difficult time of Dædalus, I write about the parallels be- thought their bank accounts were free be- keeping up with what industry does. The tween our current condition and the Great cause they didn’t realize they would be Dædalus article by McCarty and his col- Depression. One of the parallels is ideo- paying overdraft fees. Then they bought leagues suggests that some kind of taboo logical. A large community of opinion to- is attached to effective regulation. The day in the United States and Europe sup- If the financial system is too official explanation is always that prob- ports the idea of minimal government, lems are caused by bad apples, by bad peo- free competition in finance and industry, expensive, how has it per- ple at Enron or bad people at Bear Stearns. and stable exchange rates, a view that is This explanation is just a way of avoiding reminiscent of the views of the gold stan- suaded market participants stringent regulation of the good apples or dard that got us into so much trouble in to pay its bills? what are thought to be the natural tenden- the interwar period. We saw a small dem- cies of the industry. onstration of that recently when the presi- too many checking services because they I am inclined to think that the problem of dent of the World Bank said we should re- thought these accounts were free when in how to regulate the financial industry has construct not the domestic system Bob fact they were not. Similarly, some people no neat solution and that having multiple has talked about but the international argue that active mutual fund manage- lines of defense–lots of regulatory bod- financial system and suggested that we use ment is fruitless and expensive. On that ies, even if they get in one another’s way– gold as the index of expectations. That set view of the world, the problem is that the is probably a good idea. This might not be off a little firestorm in the press. people who buy such mutual funds are not the most efficient way to regulate, but when The problem with this kind of ideology is savvy enough. The customers, you and I, any given formula for regulation is likely it leads people to think the best policy at the people in the economy, are not savvy to fail or give way at some point, having the moment is to limit the government, to enough, and so we have allowed the sys- another one in place would be good. reduce its activities in order to get to this tem to grow too big. combination that they support. One lesson we learned from the Great Depression, Another line of thought would argue not which evolved much more slowly than we that the customers are suckers but the tax- think things are evolving now, was that by payers, because we have set up a system 1936 both the government and the Federal that provides the financial industry with

Bulletin of the American Academy, Spring 2011 41 Academy Meetings guarantees that allow it to extract what are The arrangements are such who are lending to other big-time opera- essentially rents from the taxpayers. If we tors. You expect big-time operators to be had a clear theory of how the industry per- that the financial system’s smart enough to see that they are taking suaded market participants to pay its high a risk, and a big risk, and to ask a large costs, it might guide our regulatory or polit- decisions are being made by enough price for that service to limit the ical response. people who have a financial amount of risk that is taken. That is not an implausible thought, but we have seen an Benjamin Friedman interest but whose potential example in the last couple of years where I think both answers are right: it has some- returns are bounded from things didn’t seem to work that way. thing to do with customers and something Another interesting thing about which I to do with taxpayers. But the real issue– below and in such a way that have puzzled, as I imagine John and Ben to use a phrase that Louis Brandeis used as the risk doesn’t really accrue have puzzled, is what to do about the the title of a book almost one hundred moral hazard. What do we do about the years ago–is that it is all done with other to them. willingness of the taxpayer (or the tax- people’s money. Bob implicitly referred to payer’s representatives; you might have the point that what we see happening in will be better compensated when the noticed that the taxpayers have recently the financial system today is based in part financial institution does well than when indicated their bitter resentment of their on leverage but also in part on equity con- it doesn’t do well. representatives’ actions) to bail out large tributions from other people. failing institutions? What do we do about But even when the financial institution Leverage means that the owner of a pool the risk-taker who says, “Oh, well, I’m too does so badly that it goes broke, the man- of assets is taking risks, much of which do big to fail. I will be rescued if I go sour.” agers will still be compensated extremely not accrue to the owner of the pool of as- Can we seriously expect the federal gov- well. My favorite current example is Citi- sets but rather to some debt holder some- ernment to say, “Nobody is too big to fail. bank. In the year 2008, the shares of Citi- where. You could call the risk-takers cus- If you fail, you fail. We won’t help you at bank lost 95 percent of their value. But for tomers of the casino, or you could take the all.” What if the failure of a large institu- taxpayer assistance, the loss would have more practical view that they understand tion does enormous damage to the real been 100 percent. Despite this, the man- that in the event of a problem they will be economy? agement of Citibank decided that forty- bailed out by the taxpayer. The point is four people working at the bank had done that the equity owner–be it a bank, a such a wonderful job enhancing the value What do we do about the hedge fund, or some other kind of entity– of their shareholders’ stock that they were of the pool of assets is taking risks that get each entitled to bonuses of more than $5 willingness of the taxpayer laid off on other people. million. (or the taxpayer’s representa- What we see happening in The real answer to your question, John, is tives) to bail out large failing Brandeis’s answer: it’s other people’s the financial system today is money, whether the taxpayer’s, the bond- institutions? based in part on leverage but holder’s, or the depositor’s. The arrange- ments are such that the financial system’s Let me put the proposition to you in a sim- also in part on equity contri- decisions are being made by people who ple way. Suppose the government an- have a financial interest but whose poten- nounced it would not rescue commercial butions from other people. tial returns are bounded from below and fishermen who went to sea on a rough day. in such a way that the risk doesn’t really After all, a moral hazard arises when accrue to them. A typical hedge fund is entirely equity; fishermen go out when they shouldn’t go but its decision-makers are people who Robert Solow out because they know that the Coast will be paid regardless of whether the Guard will come after them if they get in fund gains or loses money. If the fund John asks the right question. First of all, trouble. So the Coast Guard says, “Now does well, they will be paid more, but the some believed–including, notoriously, we won’t rescue you,” but the fishermen main point is they will be paid, and hand- Alan Greenspan–that the creditors of still go out, and the storm comes. With somely, regardless of whether the fund financial institutions would keep those in- twelve Rhode Island trawlers about to sink does well or badly. A similar compensa- stitutions from doing foolish things. After in Rhode Island Sound, can you really tion structure is in place at most major all, Greenspan said–and correctly so– imagine the Coast Guard saying, “We told American financial institutions. At a typi- these are not two-bit players we are talk- you so”? Of course not. To avoid moral cal, even modest-size bank, senior officers ing about. These are big-time operators hazard is politically and socially difficult.

42 Bulletin of the American Academy, Spring 2011 The Financial Crisis and Economic Policy

Question 1960s. The economist Hyman Minsky this. They talk about “financial frictions,” claimed that there is nothing wrong with for example. People have now internalized Does the huge financial reform package macroeconomics that another depression Minsky’s central idea that as the elapsed deal with any of the problems you talked would not cure. I think what he meant by time from the last great crisis increases, about? that was that economists–the economics people become more and more willing to Benjamin Friedman profession–would relearn their Keynes. I take on greater risk. People also have un- think one of the things Krugman was point- derstood, in a way that Minsky would The answer is yes. The Dodd-Frank bill ing out was that some major economists have approved of, the notion that financial has some useful steps in it. If I had been at major institutions don’t know the first markets are able to inflict real damage on asked to vote yea or nay on the bill, I would thing about Keynes. Did the Great Reces- the rest of the economy. While I am not have voted yes. My own view, though, is sion prove Minsky right? Are people re- optimistic that you will see Keynes’s les- that it is all thin beer. If you thought we learning their Keynes, and what other les- sons reappear in modern economics any were about to enter an era in which, step sons should the economics profession time soon, I am more optimistic about by step, we would move toward a more learn from this crisis? Minsky’s future. sensible financial system with not just Band-Aid regulations but something more Peter Temin Robert Solow fundamental, then Dodd-Frank was a nice I think we are having a Great Recession Hy Minsky was a dear friend. So dear a first step. My suspicion, however, for many rather than another Great Depression friend that one day, probably in 1942, of the reasons that Bob articulated, is that partly by luck and partly by policies. The when he was a graduate student in eco- the rosy view is just that. crisis has produced a little soul-searching, nomics at Harvard, he said to a Radcliffe as you can see in the Dædalus volume, but sophomore of his acquaintance, “You Banks don’t want to have to not a lot. Keynes never confronted the know, there’s a Harvard student with a kinds of issues that Ben and Bob have been part-time job in the stacks of Littauer Li- buy in the marketplace the talking about tonight. Thus, although I brary with whom I think you would get insurance against failure that think Keynes has something to tell us, he along well.” The Radcliffe sophomore did doesn’t have everything. If we are looking nothing about it, but she and I met other- they are currently receiving for a revolution in our thinking, we perhaps wise, and we have now been married for free from the government. need a bigger shock than we have had. about sixty-six years. Benjamin Friedman The insight that the longer it has been since The sense of urgency has now disappeared you were burned, the more likely you are Alas, Paul Samuelson is not here to remind from the public conversation. People no to play with matches, while a valid insight, us of what Planck said about science ad- longer think it is going to be 1933 all over never struck me as deep. It offers little in vancing funeral by funeral. One does not again tomorrow morning. Therefore, the the way of a method for making solid in- expect economists of a certain age to learn Dodd-Frank bill is not going to end up ferences about when the next match new lessons. This does not happen. Also, being the first of a sequence of efforts. might go off, or what might ignite that although people have not relearned Keynes, Viewed that way, I find it is all very disap- they have relearned Minsky, and that is pointing. In my own piece in the Dædalus important. I see this in the work of younger What do we do about the risk- issue, I indicate a few obvious things that people in our department. But the ten- we should have done that are not in Dodd- taker who says, “Oh, well, dency to do economic work as if there is Frank, and one could go on in that vein no such thing on the planet as a person I’m too big to fail. I will be with quite a few others. Was it a bill worth who is unemployed or who would like to having? Yes. Was this a good use of our get a job at the current wage rate but can- rescued if I go sour”? once-in-a-generation opportunity to do not find one is undiminished by the recent something in a climate of perceived public match, or what action you could take that experience. I do not know what unemploy- urgency? I think we missed the opportunity. would not be too painful but would per- ment rate would be required to change haps prevent someone from playing with Robert Solow that view among most of my colleagues, matches. Let’s face it; there wasn’t enough but clearly it would have to be a lot greater theory in the insight. Still, I fussed over it I think Rahm Emanuel might say we let the than 9.6 percent. crisis go to waste. with Hy Minsky probably until the year he By contrast, I am impressed with the num- died. The recent crisis probably was a Question ber of young scholars in economics, both “Minsky moment.” But I am afraid the key word here is moment, and I don’t Paul Krugman has claimed that the econom- in my department and elsewhere, who are think too many PhD theses that pass ics profession has unlearned the macro- working in what I would call a Minskian muster with you will go down that line. economic lessons of the 1930s through the mode. People use lots of buzzwords for

Bulletin of the American Academy, Spring 2011 43 Academy Meetings

What will happen to Keynes, I don’t know. stronger control would be desirable. But One other good idea that was in the public I am disqualified from speaking about this that is just the sort of thing the Dodd-Frank discussion but never made it in a serious because I never forgot. Here we had this bill was unable to do, for perfectly obvious way into the Dodd-Frank bill was a re- enormous earthquake, and I detect only political reasons. (I would love to see a de- quirement that banks, if they are to con- the tiniest tremors in the macroeconom- tailed description of the financial services tinue to be leveraged institutions (as a ics profession. I find that sad. industry’s lobbying efforts on the Dodd- practical matter, they will), be required to Frank bill.) issue some of their liabilities in convert- Question ible form so that under some definable set Wouldn’t it be good to think about this One idea is to require corpo- of events people who start off as bond- failure in the market as a kind of market holders would become equity holders. failure? Wouldn’t it be worth thinking rations–financial and nonfi- The banks resist this idea because, pre- about the information that’s produced nancial–to have a living will sumably, such securities would be more about securities as being a public good, expensive for them to issue. If you are a because it is information? Wouldn’t it be that lays out in advance what bondholder who knows that your liabili- good to think about the fact that that in- ties could be converted–not at your op- formation is not publicly provided and is should happen in the event of tion but because of some sequence of instead being kept secret as proprietary a bankruptcy. events–to equities, you would demand a information, creating a great breeding higher yield, and the banks don’t want to pay that higher yield on their securities. ground for fraud, as Bob was suggesting? The question of what to do with the rating Wouldn’t it be better to have a single gov- agencies is a very good one. But I am not But what does that tell you? What it says ernment agency rather than 120 regula- sure that a public rating agency would be a is that banks don’t want to have to buy in tory agencies to organize the rating of se- good idea, because rating complex securi- the marketplace the insurance against fail- curities by nonconflicted companies, to ties is not easy and whatever the rating ure that they are currently receiving free organize the appraisal of the collateral of agency learned to do industry would soon from the government. If somebody of- the securities, to organize the full disclo- learn to do better and subtler and in a fered me free homeowner’s insurance, I sure in real time of the securities, and to more complex way. That doesn’t mean would take it. The banks now get this in- verify all the statements (e.g., the income one doesn’t have to reform the system of surance free from the government, and of of the borrower and the employment his- rating agencies. What we have is clearly course they resist having to pay for it in tory) on these securities? And wouldn’t it unsatisfactory. Whether by opening it up the form of market-based insurance. be good to have all the financial interme- and having a more competitive industry diaries that are protected by a limited lia- and having it pay in different ways would Robert Solow bility turned into mutual fund companies work well, I don’t know, but I would sure I discuss briefly some of these ideas in my so that all the investment comes in the be game to try. form of equity, thus eliminating leverage? contribution to the Fall issue of Dædalus. We would then have mutual funds invest- Benjamin Friedman A similar idea is to require corporations– ing in these securities that the single regu- financial and nonfinancial–to have a living lator was fully vetting and disclosing on I am sympathetic to a lot of the things sug- will that lays out in advance what should the Web so that we actually knew what it gested in the question and certainly to the happen in the event of a bankruptcy. spirit of the suggestions, but I haven’t was we were buying in the financial mar- Benjamin Friedman ketplace. Wouldn’t it be good to have that thought through the details. And I have kind of a system, because we would never the same kind of reservations on some of But the difference is that when you write have another financial collapse? Mutual these things that Bob does. I also have a your will, the assets that you are disposing funds, by definition, cannot go broke. concern with the scale of the activity that of are your assets and your wife’s assets. They can lose the value of their invest- is necessary to do this kind of verification. When the bankers write the living will for ments, but they can’t actually collapse. For example, for the last twenty-odd years, the bank, they are planning for the dispo- Wouldn’t it be good to think about our I have been a trustee of one or another of sition of somebody else’s assets. To them, financial system that way? these Boston-based families of mutual it’s other people’s money. funds. I have seen the kinds of disclosures Robert Solow people make to the Securities and Exchange © 2011 by John Y. Campbell, Benjamin M. Commission (sec). For the sec to verify A much stronger control of leverage would Friedman, Robert M. Solow, and Peter all of that information in a detailed way Temin, respectively certainly be desirable, but you can’t run a would be a massive undertaking that would bank without some leverage. You can’t require an sec far beyond the scale of any- earn a decent return on the difference be- thing we currently have. tween the lending rate and the borrowing rate without a little bit of leverage. Much

44 Bulletin of the American Academy, Spring 2011 Academy Meetings

The Future of Power

Joseph S. Nye, Jr. Introduction by Jack Landman Goldsmith

1967th Stated Meeting, held on February 16, 2011, at the House of the Academy

simistic as many–it reflects on the arc of he did get involved, and he has been leading American power in all its guises. Like all of a series of lunches with a group of people Joe’s work–and this is what makes it so from around Cambridge twice a month on powerful–it is serious about theory and the problem of cybersecurity, and it has been ideas but at the same time is informed by one of the best intellectual experiences I deep practical knowledge of how interna- have had since I have been at Harvard. The tional politics works and how government meetings are great because of how many works. different people are around the table but also because Joe has been a great discussion One of the most important themes in his leader. Because of his efforts to learn about new book is that power diffusion is poten- the topic, he is now an expert on cyber power. tially a greater threat to American power By leading us, pushing us, helping us stay than power transition; that is, the threat organized, and by being generous with his from nonstate actors may be greater and time and intellect in order to help others more serious than the threat from, say, improve their work, he has also been an China. This comes through most power- exemplar of what an intellectual and an fully in his discussion of cyber power. If you academic should be. His generosity of mind have read in newspapers all the scary sto- and spirit makes him a rare thing at Harvard ries about cyber attacks, cyber war, and and in the academy generally; it is also what cyber exploitation and you are wondering makes his work so wonderful. Jack Landman Goldsmith about their signi½cance, you will ½nd no better analysis than in this book. The ex- Jack Landman Goldsmith is the Henry L. Shattuck tent to which Joe’s book anticipates and Professor at Harvard Law School. He was elected helps us understand what is going on right a Fellow of the American Academy in 2010. now in the Middle East, on WikiLeaks, and so on is amazing. The book frames the de- Introduction velopments we are reading about in our morning papers and puts them in a larger theoretical framework. t is a cliché to say that a speaker needs no I A little less than two years ago, a group of introduction, but in Joe Nye’s case the cliché mit happens to be true. Joe is University Distin- us at and Harvard were working to- guished Service Professor at Harvard; a long- gether on the problem of cybersecurity time former dean at the Kennedy School; a under the guise of a grant called Minerva. former top of½cial in the U.S. State Depart- We were desperate to get Joe involved in ment, Defense Department, and in the in- the project. He asked me, “Should I really telligence community; and the author of at do this? I’m not sure I understand the tech- least a dozen books on international politics nology.” I didn’t know Joe well at the time, and related topics. His new book, The Future and I said, “Yes, you should. The technol- of Power, is one of his best. Sober but not ogy’s not that hard to understand; you don’t terribly pessimistic–or at least not as pes- need to understand it too deeply to under- stand the problems.” Well, to my surprise,

Bulletin of the American Academy, Spring 2011 45 Academy Meetings

population was still in Asia, but only about Power is the ability to affect 20 percent of world product was. Now, in the twenty-½rst century, we are getting back others to get the things you to proportions that are historically more normal. The shift began in the twentieth want. century with Japan after World War II, moved on to Korea, and then to the so- thus been a signi½cant lowering of the bar- called smaller East Asian states. Now it is in riers to entry to the stage of world politics. China, and it is about to be in India. In the Consider the ability to communicate simul- days of Teddy Roosevelt, the American view taneously to all points of the globe. In 1970, was that power would migrate around the if you wanted to be in Cambridge and com- globe from east to west; that is, from Europe municate with Johannesburg, Beijing, Mos- to the United States. That view was real- cow, and London all at the same time, you ized, only the migrating didn’t end here. could do so; it was technically possible but Power continues to migrate westward. In very, very expensive. Today, anybody can the twenty-½rst century, we are going to see do so for the price of entry to an Internet more of the world’s economic activity cen- café or, if you use Skype at home, for free. tered in Asia. Consider also something that was a deep secret and cost billions of dollars when I was serving in the State Department in the Joseph S. Nye, Jr. Today we are seeing two big 1970s: the ability to take a picture of any place on earth with one meter resolution. Joseph S. Nye, Jr., is University Distinguished shifts in how power is used At the time only the United States and the Service Professor at Harvard University and Soviets had this capability. Today, anybody former Dean of the Harvard Kennedy School. in international politics and can view such images by using Google Earth, He was elected a Fellow of the American Acad- world affairs. These shifts, a free program. This is an extraordinary emy in 1984. which are the result of the lowering of the barriers to entry. And with such changes you get a different kind of pol- Presentation information revolution and itics. Sometimes people say these changes portend the decline or even the end of the globalization, are power tran- nation-state, but that is not the right way to What is power, and why does it matter? sition among states and power think about what is happening. The state I de½ne power as the ability to affect others and governments remain the most power- to get the things you want. You can do that diffusion from states to non- ful actors in international politics, but they in three ways: you can use coercion, sticks; are no longer alone on the stage, and shar- you can use payments, carrots; or you can state actors. ing the stage with many new actors makes use attraction and persuasion, soft power. for a different type of politics. As we try to In the twenty-½rst century, the ability to The other great power shift, power diffu- think our way through this, we have to real- combine these as smart power will be one sion, is the movement of power from gov- ize that we haven’t quite caught up with this of the main challenges not just for the ernments, whether East or West, to non- diffusion of power, and while we know a United States but for any actor in interna- governmental actors or nonstate actors. lot about power transition through history, tional politics. Today we are seeing two big Nongovernmental actors have always played we don’t know anything about such rapid shifts in how power is used in international important roles, but their development and power diffusion. politics and world affairs. These shifts, the growth of their influence has become which are the result of the information much more rapid and much more wide- The recent events in Egypt, Tunisia, and the revolution and globalization, are power spread as a result of the information revo- rest of the Middle East are illuminating in transition among states and power diffusion lution. Information revolution is just a fancy that sense. The conventional wisdom among from states to nonstate actors. term for the extraordinary decrease in the those who looked at the Middle East used to costs of computing and communications. be that you had a choice either of supporting The power transition occurring in this cen- the autocrat or being stuck with the religious tury is sometimes called the rise of Asia, but From 1970 to 2000, the cost of computing decreased a thousand-fold. If the price of extremists. The extraordinary diffusion of it is more accurately called the recovery of information created in Egypt and other Mid- Asia. In 1800, more than half of the world’s an automobile had decreased as rapidly as the price of computing power, you could dle Eastern countries reveals a strong mid- population was in Asia and more than half dle that we weren’t fully aware of. What is of the world’s product was in Asia. One buy a car today for ½ve dollars. One conse- quence of the information revolution has more, new technologies allow this new mid- hundred years later, more than half of the dle to coordinate in ways unseen before

46 Bulletin of the American Academy, Spring 2011 The Future of Power

Twitter, Facebook, and so forth, and this actors who previously were not able to play. We have to develop a broader awareness in could lead to a very different politics of the Recall that wonderful New Yorker cartoon the public and in the policy community to Middle East. This introduces a new com- with the caption, “On the Internet, nobody be able to think clearly about how we trade plexity to our government’s dealings with knows you’re a dog.” Well, if you are attacked off different values and develop sensible the region. With Egypt we watched the and something happens to your systems, you strategies for cyber. Obama administration try to deal with the don’t know who the attacker is–probably hard power elements, with issues such as it isn’t a dog, but you don’t know whether To deal with a government and military assistance to the government, peace it is a hacker, a criminal group, a terrorist with Israel, the balancing of Iranian power, group, or another government, and if a gov- with a civil society requires an and so forth–issues that can’t just be ignored ernment, a large or small government. Peo- and that thus force us to deal with govern- ple can now send electrons across borders extraordinary ability to use ments. But at the same time, the Obama to do things that you previously had to do both hard and soft power. administration had to deal with civil society, by sending bombers or spies who could be with what was going on in Tahrir Square, with caught or defended against. Stuxnet, the a new generation. If we think of stability as worm that essentially disabled Iran’s uranium In learning to deal with the problems, many dealing only with existing institutions and centrifuges–an attack probably mounted by of them unprecedented, raised by power the government and don’t think about the a government or governments, though we diffusion, we will need a much better ac- future, we are missing dynamic stability. don’t know for certain–illustrates the type of count of what power is. We still tend to We will fall behind the curve. To deal with attack that could also be mounted against us. think of power in old-fashioned ways, as a government and with a civil society re- hard power, discounting soft power. We quires an extraordinary ability to use both The United States may be ahead of other often use de½nitions like the one Robert hard and soft power–on the one hand, to countries in its offensive capabilities in Dahl, the distinguished Yale political scien- use the threat of reduced or eliminated mil- cyber, but because it depends so much on tist, proposed in the late 1950s: “Power is itary assistance to encourage the Egyptian cyber, it is also more vulnerable. What, then, the ability to get others to do what they should our policy be? When it comes to otherwise wouldn’t do.” That is a good thinking about cyber, we are at about the de½nition for one part of power, but it The state and governments same place people were in 1950 when think- doesn’t encompass all of power; it misses remain the most powerful ing about the nuclear revolution. We know the ability to set the agendas, which deter- it is something new and big and that it is mine how others see issues. And it misses actors in international politics, transformative, but we haven’t thought out the ability to establish the preferences of what offense means, what defense means. others, to affect minds, so that you might but they are no longer alone What is deterrence in such a world? What not have to twist arms when push comes on the stage, and sharing the is strategy? How do we ½t the pieces to- to shove. gether? Can we establish rules of the road? stage with many new actors Can we ½nd an analogue in arms control, Our way of thinking about the great pow- or is that an unlikely model for something ers is also old-fashioned. The British histo- makes for a different type of that is apparently unveri½able? The ½rst ef- rian A.J.P. Taylor wrote in his wonderful politics. forts at arms control didn’t bear fruit until book The Struggle for Mastery in Europe that twenty years after the ½rst nuclear explo- “The mark of a great power is the ability to prevail in war.” Well, the ability to prevail army not to shoot people; on the other hand, sion and came about largely to deal with third parties (the Nuclear Non-Proliferation in war remains important in the twenty- to craft a narrative that will attract young ½rst century, but in an information age it is people of the new generation. The Obama Treaty) or because of concerns with envi- ronmental fallout (the Limited Test Ban not just whose army wins; it is whose story administration had to walk a policy tight- wins, and if you don’t understand the im- rope and, although it wobbled a bit along the Treaty). Not until the 1970s, some thirty years after the technology emerged, were portance of that narrative in shaping pref- way, by and large it crossed the chasm–like- erences and setting agendas, then you are ly the ½rst of many that will characterize this the ½rst bilateral arms control agreements signed, and not until the 1980s did leaders going to have a foreign policy that relies on new and different type of politics–success- only one part of the spectrum of power, that fully. of the two superpower nations proclaim that nuclear war cannot be won and must uses only some of the tools in the toolbox. We forget how new cyber is. Yes, the Internet never be fought. Forty years were needed to Sometimes this seems to be understood may be forty-or-so years old, but the Web develop a powerful basic normative agree- better in countries other than the United is only about twenty years old, and the mil- ment. In cyber, we are still around 1950. States. In 2007, Hu Jintao told the Seven- lions of people who were on the Web in the What this means is that we can no longer teenth Party Congress of the Communist 1990s has today grown to 1.7 billion people. treat cyber and the other aspects of power Party of China that China had to invest more This is an extraordinary pace of change, and diffusion as something to be left to the in its soft power. That is a smart strategy. If it means the entry into the game of a lot of technocrats or the intelligence specialists. your economic and military hard power is

Bulletin of the American Academy, Spring 2011 47 Academy Meetings increasing, you are going to scare others, discussion enters our broader political dis- we will necessarily achieve a solution, but and they will form coalitions against you. course is remarkable. To stand on a stump we shouldn’t pretend that no solutions are But if you can accompany your hard power and get money for defense is still a lot eas- possible. The Bowles and Simpson com- with soft power so you look attractive and ier than to get money for exchange programs mission shows that solutions to, for exam- friendly, you are less likely to create these or aid programs in the State Department. ple, the de½cit problem are possible. That countervailing coalitions. After Hu Jintao But if we are going to succeed in this world possibility doesn’t mean we will have the urged China to invest more in soft power, of diffusion of power, we are going to have will to put solutions into effect; just that it the nation followed up with billions of dol- to think much more subtly about what is is not a situation where you can’t imagine lars of expenditures–not only things like involved in power, and we will need a public solutions. Throughout American history the Beijing Olympics and the Shanghai Expo that is educated to understand and engage people have expressed concern that the but Confucius Institutes around the world. in this broader discussion of our policies. If we are going to succeed We can no longer treat cyber Unfortunately, one of the narratives cur- rently being used to help us try to under- in this world of diffusion of and the other aspects of power stand the power transition that I called the power, we are going to have diffusion as something to be recovery of Asia is the narrative of Ameri- can decline. We are told that countries have to think much more subtly left to the technocrats or the life cycles, America is past its peak, we are now in decline, and that is the narrative of about what is involved in intelligence specialists. We have the twenty-½rst century. I think using such power, and we will need a to develop a broader aware- narratives is a big mistake because countries don’t have natural life cycles, so the organic public that is educated to ness in the public and in the metaphor of natural decline is misleading when applied to countries. Yes, the 2008 understand and engage in policy community. ½nancial crisis was a disaster, much of it made in America, but I suspect the idea this broader discussion of In the United States, however, where we that this shows the beginning of American our policies. are sometimes good at soft power–all the decline–as President Medvedev of Russia way back to John Winthrop and the “City has suggested–will be proven wrong as the country is in decay, but if you compare upon a Hill”–we don’t discuss it in our economy recovers. In the eighteenth cen- American society today to that of the Mc- public discourse. I once talked to a con- tury, after Britain had lost its American Carthy period or the 1920s or the beginning gresswoman, a friend of mine, who said, colonies, Horace Walpole lamented, “We of the century, we have a healthier society “You know, you’re absolutely right about shall be reduced to a miserable little island; today. We have always complained about the importance of soft power, but I can’t and from a mighty empire sink into as in- immigration, and yet immigration is what get up on a political platform and say the signi½cant a country as Denmark or Sar- we are. We are a nation of immigrants, and word soft, because I will not be elected.” dinia.” Of course, he missed the point that fortunately we will be inef½cient enough In practical terms this leads to situations Britain was on the verge of its second cen- that we won’t be able to stop the flow of like the one in which Hillary Clinton, the tury of ascendancy because of the Indus- newcomers. secretary of state, and Bob Gates, the secre- trial Revolution. Rome went on for some tary of defense (who does talk about soft 300 years after the apogee of its power, and Once when I was talking with former Singa- power) agreed to transfer an aid program when it ½nally did collapse, it collapsed not porean Prime Minster Lee Kuan Yew about from the Defense Department to the State before another country but because of in- his projections of what would happen in Department so that these tools of soft and ternal decay and the onslaught of barbar- the contest between the United States and hard power could be more effectively inte- ians. We don’t know where America is in China in the twenty-½rst century, he said, grated. But after the program was transferred the trajectory of its history. Thus, the meta- “You know, the Americans have a unique from Defense to State, Congress cut the phor of organic decline misleads us into advantage. The Chinese can draw from the budget in half–but not because anything conflating relative and absolute decline talents of 1.3 billion people; the Americans had changed in the program. Rather, the when we ought to think of these two sepa- can draw upon the talents of 7 billion peo- cut is a reflection of a political culture and rately. ple. And what’s more, when the Americans discourse in the United States that makes take these talented people, they recombine developing a balanced strategy dif½cult. Absolute decline is not what we are seeing them with diversity to create a new and cre- Clinton talked about smart power during in America. The severe problems we face– ative generation, which the Chinese can’t her con½rmation hearings for secretary of including the budget de½cit and the issues do because of ethnic Han nationalism.” To state, about the need to balance hard and of secondary education–do not prove ab- the extent the United States maintains that soft power and, as she put it, to “use all the solute decline. These are problems that, in openness, worries about American society tools in the toolbox.” But how little that principle, have solutions. That doesn’t mean being in absolute decay are probably over-

48 Bulletin of the American Academy, Spring 2011 The Future of Power

China will decrease the gap between its power and that of the United States, but I don’t think it is likely to surpass the United States in the next few decades. On one measure, size of economy, the Chinese probably will pass the United States some- time in the 2020s, and that stands to reason. With 1.3 billion people and a growth rate of 10 percent, China is bound to get bigger. But having similarly sized economies does not mean having economies equal in com- position. Per capita income is a better mea- sure of the sophistication or composition of an economy, and China is not likely to equal the United States in per capita income until In learning to deal with the problems, many of them un- precedented, raised by power diffusion, we will need a much better account of what power is.

close to the middle of the century, if then. The other mistake people make is to look only at one-dimensional projections of power. Most people, when they talk about China passing the United States, are look- ing only at growth in gross domestic prod- uct (gdp) and the size of the economy. They neglect military power and soft power. In military power, however, the Americans are well ahead of the Chinese, and the Chi- nese are unlikely to catch up in the ability to project military power globally for sev- Image © Cooperphoto/Corbis eral decades. China is investing billions of dollars to increase its soft power, but it is stated. The World Economic Forum’s latest extreme partisanship–look at the relations limited by the characteristics of its do- Global Competitiveness Report places the between Adams and Jefferson and Hamilton. mestic political society. An authoritarian United States fourth on its competitiveness This type of political debate comes from system has a hard time generating soft index behind Switzerland, Sweden, and deep in our roots as a people and does not power because much of soft power is gen- Singapore. China is ranked twenty-seventh. lead me to believe we are in absolute decline. erated by civil society, not by governments. We are still the innovation leaders in areas Our present mood is one of declinism, and American soft power comes from Holly- like nanotechnology and biotechnology, it is a mood we have felt before. After Sput- wood and Harvard and the Bill and Melinda and American universities and higher edu- nik we thought the Russians were ten feet Gates Foundation and from many, many cation lead the world. The United States tall. In the 1980s, it was the Japanese. Now, others. The Chinese have been unwilling to has its share of problems at the moment, after the 2008 ½nancial crisis, the Chinese unleash their civil society. I was once asked but the picture they paint is not of absolute are ten feet tall. You can ½nd polls showing by a Chinese student at Beijing University, decay. Yes, we are going through a miserable that a majority of people think the Chinese “How can we increase our soft power?” I trough of extreme partisanship in our po- economy is now larger than the American said, “By relaxing your censorship. Look at litical debate, but we have seen worse peri- economy. We will outgrow this. These cycles India. Bollywood makes more movies than ods. The 1930s was one. Even among the of declinism tell us more about the Amer- Hollywood, but if you compared India’s founding fathers we can ½nd examples of ican psyche than about reality. directors, actors, and actresses to those in

Bulletin of the American Academy, Spring 2011 49 Academy Meetings

China, you wouldn’t say India’s ½lm pro- Why does all of this matter? Certainly, Understanding our own power, fessionals are more talented–but they do power is not about being able to brag we have fewer censors.” I think that was the are number one. We are not the Green Bay its strengths and its limits, and right advice to give my Chinese interlocu- Packers of world politics. Instead it matters tor, even if it was totally useless as advice! because power is not good or bad per se. having others understand it, is Power is a lot like calories in a diet–too You can see the dif½culties China will have particularly important if we little and you expire; too much and you be- in generating soft power in the problems it come obese. Understanding the different has faced in the last year. After all its efforts are to manage one of the great dimensions of power and the right strategy to invest in soft power with the Olympics for using it is what we need to look at. Un- questions of power transition, and the Shanghai Expo, China locks up Liu derstanding our own power, its strengths Xiaobo and prevents him from going to the the rise of China. and its limits, and having others understand Nobel Peace Prize ceremony, essentially it, is particularly important if we are to man- shooting itself in the foot. The Chinese are age one of the great questions of power tran- Power in world politics today resembles a unlikely to equal the Americans in soft sition, the rise of China. Thucydides said three-dimensional chess game. On the top power until you see a transformation of the that the Peloponnesian War, which tore board of military power among states, the political system in China, and I don’t think apart the Greek city-state system, was world is unipolar, and the United States is that is likely to come quickly. Recent polls caused by the rise of the power of Athens likely to remain the dominant power for taken by the Chicago Council on Global Af- and the fear it created in Sparta. Many peo- another decade or two. On the middle board fairs show that, even after the disastrous ple have said World War I, which tore the of economic relations among states, the ½rst part of this past decade for American European state system apart, was caused by world is multipolar and has been for two soft power, the United States is still ahead the rise in the power of Germany and the decades. In this domain, Europe can act as of China and the other Asian countries when fear this created in Britain. Some analysts an entity, and when it does, its economy is it comes to measuring or judging soft power. today say this story will be repeated in the larger than that of the United States. On the twenty-½rst century as the rise in the power bottom board of transnational relations, The Chinese are unlikely to of China creates fear in the United States. things that cross borders outside the con- But that is bad history. By 1900, Germany trol of the government, whether terrorists equal the Americans in soft had already surpassed Britain economi- or international cyber crime syndicates or power until you see a transfor- cally. If my analysis is correct and China whether impersonal forces like pandemics will not surpass the United States for an- or global climate change, power is distrib- mation of the political system other decade, or even two or three decades, uted chaotically; the traditional terminol- then we have time to deal with this change. ogy of unipolarity and multipolarity makes in China. We have time to manage the rise of China no sense here. Dealing with the challenges without succumbing to the second part of that emerge from the bottom board of trans- Finally, when considering whether China the Thucydidean trap: overreaction because national relations requires cooperation, will pass the United States in overall power, of fear. But we face a concurrent problem, and that is where our soft power comes in. you have to take into account the geopoliti- the danger of Chinese belief in American With many of these transnational issues, cal circumstances in Asia. Asia is not mono- decline. Such belief could lead to Chinese which pose serious challenges to us, power lithic. Bill Emmott, in his ½ne book Rivals, hubris, which would make it even more with others is as important as power over points out that Japan, India, Vietnam, and dif½cult for us to then make compromises others. Therefore, we have to think of posi- others have quite different views of the rise and accommodate China because every tive-sum and zero-sum games simulta- of Chinese power than China does, which time we made a compromise it would be neously. To deal with this world of power makes them natural allies for the United read in Beijing as proof of American decline. transition and power diffusion, we need to States. The situation is analogous to Canada Managing well our relationship with China think more clearly about how we treat and Mexico inviting China to come in to over the next decade or so is going to be ex- power. We have to understand that the rise North America to balance American power. tremely dif½cult, but we can succeed if we of the rest is not necessarily a sign of Ameri- Fortunately, because of our soft power, that design our policies intelligently. can decline. We have to keep our wits about is not a problem with our neighbors, but us if we are not to succumb to the fear that We need not repeat the mistakes that led to China does have that problem. The argu- Thucydides warns against. When we deal the great disaster of World War I. But avoid- ment that China is bound because of its with power diffusion issues, we have to ing a similar outcome will take a much more gdp growth to pass the United States seems think about how we can use the full set of sophisticated understanding of the present to me a rather simplistic, unidimensional tools in our toolbox, the soft-power instru- power transition than the current common- view of power. ments as well as the hard-power instru- place narrative of American decline. ments. As Anne-Marie Slaughter of Prince-

50 Bulletin of the American Academy, Spring 2011 The Future of Power ton put it, the unique capacity of the United bering that when Google and China squared let the government take over everything, States to maintain alliances, to create net- off a year ago, the Chinese government did which is largely what happened in France. works, and to use institutions puts us in a better. We should not overestimate, but What I ½nd in the United States is that peo- good position to be the most powerful state. companies, and information companies in ple think primarily about their private af- If we think in terms of the ability to coordi- particular, are becoming more important. fairs and have little sense of community, nate collective action to deal with the diffu- Let’s just not overstate the decline of gov- and therefore nobody speaks for the com- sion of power rather than thinking in the ernments as a result. munity. It is not that the government has old traditional terms of military hegemony, taken over, though; the poor government which I believe is an obsolete conception of During recent trips to China, I asked Chi- is handicapped by a constitution that was power, then we might well get through these nese there why the government felt it had designed to make the use of power impos- next decades of the twenty-½rst century in to lock up Liu Xiaobo and make the fuss it sible. As long as this little problem remains reasonable shape. But in dealing with power did about his Nobel Peace Prize, actions unaddressed, I think we will be in trouble. transition and power diffusion in the twenty- that I believe were counterproductive for ½rst century, we are going to have to learn the government. I said, “You know, I don’t as a people to think and talk about power in think you’re quite that fragile. You could To deal with this world of different ways and to become a truly smart afford to lighten up.” But they don’t see it power transition and power power. quite that way. They see a situation where, as the joke goes, it’s a market-Leninist sys- diffusion, we need to think Question tem. With the Chinese Communist Party now, you have a political control apparatus more clearly about how we Where do corporations ½t in the category in which nobody believes in communism. of nonstate actors, and can a company be- So legitimacy comes from high rates of eco- treat power. come more relevant, more powerful than nomic growth and ethnic Han nationalism. the nation? For example, Facebook has The Chinese themselves report that more Joseph Nye two hundred million more users than the than 100,000 riots, demonstrations, and in- American population and was the tool that cidents occurred in the past year. The possi- I can’t disagree with your characterization brought down Mubarak; Google took on bility that these more-or-less isolated local of current politics, and I agree that the Amer- China in a way that the American govern- incidents could become something more if ican government was designed so that King ment could not. Also, if China is astute they were connected through the Internet George couldn’t rule over us and neither enough to realize the need for soft power greatly worries Chinese authorities. could anybody else, but that also gives us a and to succeed in the way it did with the sense of historical perspective. Our polity was designed to be inef½cient; the empha- Olympics, what is it so scared of when it Question comes to the Nobel Peace Prize or Falun sis was on preserving greater liberty rather Gong? One issue I think needs more discussion is than on greater ef½ciency. We have had a internal affairs, which has been the cause of couple hundred years of this. We have been decline of many great powers. I was horri½ed through worse periods in the past than we Power with others is as impor- by the campaigns preceding our recent mid- are in now; for example, the middle of the tant as power over others. term elections, by what they revealed about nineteenth century, when we broke apart American ignorance of and lack of interest into a civil war; or the 1930s; or the 1950s, in the outside world, by the concentration with McCarthyism. We have had some quite Joseph Nye on ludicrously parochial issues, and by the bad periods in our politics. We are in an un- fortunate period now, but I don’t think it is Multinational corporations have long been unwillingness to take seriously some of the one in which we won’t overcome the obsta- important nonstate actors–this goes back challenges that will undoubtedly develop. cles we face. I suspect that the budget de½cit centuries–and many multinational corpo- The basic industrial situation in America probably will not be solved in the next two rations have annual revenues that are larger reminds me of what it was in France in 1950. years (instead we will see a lot of postur- than the gdp of many countries. What The unwillingness of a large part of the ing), but I wouldn’t be surprised if a political companies don’t have are the resources of American population, judging from the po- consensus develops after the 2012 election to force. They also don’t have the resources of litical scene, to take seriously the state of implement with greater seriousness some legitimacy that governments in many cases our infrastructure and instead to look at of the things that are important for our still have. So the idea that companies are the future exclusively in terms of what needs long-term ½nancial health. That won’t be taking over the world is a bit simple. Yes, to be cut is likely to be a bigger contributor suf½cient, but it is a base from which to Google and Twitter helped to ½nd ways– to our national decline than competition start, and it does go to your point about for example, with speak-to-tweet–that al- from other nations. Tocqueville predicted community. As I read Bob Putnam, we lowed protestors to get past the Internet that in democracies people would think only haven’t lost that community; it is not nec- cutoff in Egypt, but it is also worth remem- about their private affairs and thus would

Bulletin of the American Academy, Spring 2011 51 Academy Meetings essarily centered on the government, but if Question If the book had been written in China, it you look at volunteers and the quality of would probably talk about American de- community life in the United States, we Some thinkers, Richard Rosecrance and cline. Many, but not all, Chinese scholars still compare relatively well. Trying to as- others, have written about the rise of the are now writing about American decline sess the question of internal decay inde- virtual state. Do you address this issue in and tend to believe that it is true. When I pendently and from within our immediate your book as you discuss power diffusion? was in Beijing in January 2011, I spoke with historical circumstances is always hard. We Joseph Nye an important Chinese academic who said can’t step back as well as we need to. But as that what worried him was the debate in- I look back at history, the fact that we have I don’t quite know what it means to be a side China about how to write that book. made it through worse times with our de- virtual state. The chapter in my book where He agreed with me that the Americans will liberately inef½cient governmental system I address cyber power doesn’t use the term remain ahead, but his great worry was that makes me think we might be able to make virtual state; instead I talk about a state that the people who write the book in China it through again. has to adapt to the fact that it is fully pene- will write the opposite of my book and that trable by electrons crossing its borders and this will lead to disastrous policies. He ar- Question has made itself vulnerable in this way by its gues–and I think he has a case–that since dependency on cyber. Perhaps that ½ts the the start of the recent ½nancial recession, What about Europe? It has the tools for de½nition of a virtual state. But the state China has been more assertive in its foreign smart power. What is its future? also retains powerful traditional capacities. policy. One of the reactions to its new as- The Internet doesn’t reside in a cloud; it re- Joseph Nye sertiveness has been worsened relations lies on physical servers and cables that are with India, Vietnam, South Korea, and I tend to be relatively optimistic on Europe, located within the sovereign jurisdiction of Japan, not to mention the United States. which is not fashionable now. One is sup- nation-states, and governments have tradi- tional hard power options like economic posed to be pessimistic. But Europe’s ac- © 2011 by Jack Landman Goldsmith and sanctions and police powers with which to complishments over the past four or ½ve Joseph S. Nye, Jr., respectively decades are incredible; it has created a Kant- handle Internet service providers and other ian island of peace in the international sys- actors that are within their jurisdiction. tem; it showed that France and Germany But that isn’t virtual power; it is very tradi- need not go to war again, that the prospect tional. of such a war could even become unthink- able. The Europeans have created not a sin- Question gle European nation but a different relation among European peoples, what Bob Keo- If a book called The Future of Power were to hane and I once called a “complex interde- have come out of China or India, what would pendence.” This is tremendously healthy. the conclusion of that book have been? Will it last? Some people say the euro is Joseph Nye going to collapse and bring down Europe. I was at the Munich Security Conference in One of my Indian friends says that by 2050 early February 2011, and I was struck by the world will have three powers: India, the strength of the political commitment China, and the United States. His comment Angela Merkel expressed in defense of the to me was, “We may not like the United euro even though she is facing domestic States, we may have trouble with the United problems about who pays Greek bills and States at times, but when it comes to living so forth. Examples like that make me more with China, we would rather be with the optimistic about Europe than the current United States.” That is the picture the book conventional wisdom. When Europe acts as would have painted had he written it. In an entity, it is the world’s largest economy; population terms, he is right too. India will it still has enormous capacity. be the largest country, China will be second, and the United States will be third. The Unit- ed States will be the only rich country main- taining its current demographic position.

52 Bulletin of the American Academy, Spring 2011 Noteworthy

As of press time, several Fel- Recent Honorary Degrees Mina Bissell (Lawrence Berkeley Eric Foner (Columbia University) lows of the Academy, listed National Laboratory) is the recipi- was awarded the 2011 Pulitzer Leslie Cohen Berlowitz (American below, had been nominated ent of the 2011 Jill Rose Award, Prize in History for The Fiery Trial: Academy of Arts and Sciences): given by the Breast Cancer Re- Abraham Lincoln and American or appointed to key posts in Honorary Doctorate of Humane search Foundation. Slavery. the Obama administration: Letters from Northeastern Uni- versity Helen M. Blau (Stanford Univer- Elaine Fuchs (Rockefeller Univer- Susan Athey (Harvard Univer- sity School of Medicine) was sity) was awarded the 2011 Albany sity): Member, President’s Com- William Jefferson Clinton awarded the Seventh Annual Medical Center Prize in Medicine mittee on the National Medal of (William J. Clinton Foundation): aacr-Irving Weinstein Founda- and Biomedical Research. Science Honorary Doctorate of Law from tion Distinguished Lectureship. New York University Susan Gottesman (National Insti- Robert J. Zimmer (University of Stephen Carpenter (University of tutes of Health) is the recipient of Chicago): Member, National Sci- Claire M. Fagin (University of Wisconsin-Madison) was awarded the 2011 Abbott-asm Lifetime ence Board, National Science Pennsylvania): Honorary Doctor- the 2011 Stockholm Water Prize. Achievement Award. Foundation ate of Science from New York University John M. Connors, Jr. (Hill, Holli- Earl G. Graves (Black Enterprise day, Connors, Cosmopoulos) was Magazine) was inducted into the Evelyn Fox Keller (mit): Hon- Select Prizes and Awards inducted into the American Ad- American Advertising Federation’s orary Doctorate of Science from vertising Federation’s Advertising Advertising Hall of Fame. Purchase College, State University Hall of Fame. of New York Carol Greider (Johns Hopkins National Humanities Medal, Titia de Lange (Rockefeller Uni- University) was named a Gilman 2010 Arthur E. Levine (Woodrow Wil- versity) was awarded the Vilcek Scholar at Johns Hopkins Univer- son National Fellowship Founda- Prize in Biomedical Science. sity. Daniel Aaron (Harvard Univer- tion): Honorary Doctorate of sity) Humane Letters from the Univer- Esther Duflo (mit) received the Philip C. Hanawalt (Stanford sity at Buffalo 2011 Thomas C. Schelling Award, University) was awarded the ½fth Bernard Bailyn (Harvard Univer- given by the Harvard Kennedy Annual aacr Princess Takamatsu sity) Jane Lubchenco (National Oceanic School. Memorial Lectureship for Interna- and Atmospheric Administration): Jacques Barzun (San Antonio, tional Collaboration. Honorary Doctorate of Humane Catherine Dulac (Harvard Uni- Texas) versity) is the recipient of the 11th Susan Howe (State University of Letters from Loyola University unc Roberto González Echevarría Perl- Neuroscience Prize. She New York at Buffalo) was named Henri A. Termeer (Genzyme (Yale University) shares the award with Cornelia the 2011 winner of Yale Univer- Corporation): Honorary Doctor- Bargmann (Rockefeller Univer- sity’s Bollingen Prize in American Stanley N. Katz (Princeton Uni- ate of Global Business from sity). Poetry. versity) Northeastern University Carol S. Dweck (Stanford Univer- Takeo Kanade (Carnegie Mellon Philip Roth (New York, New York) Ada E. Yonath (Weizmann Insti- sity) was named a 2010 recipient University) is the 2010 winner of tute of Science): Honorary Doc- of the Elizabeth Hurlock Beckman the acm/aaai Allen Newell Gordon S. Wood (Brown Univer- torate of Science from New York Award. Award. sity) University Claire M. Fagin (University of Fred Kavli (The Kavli Foundation) National Medal of Arts, 2010 Pennsylvania) is the recipient of the is the recipient of the 2011 Bower Other Awards nyu College of Nursing Helen Award for Business Leadership, Manzer Award. given by the Franklin Institute. Donald Hall (Wilmot, New Hamp- Peter Agre (Johns Hopkins Univer- shire) sity) was named a Gilman Scholar Drew Gilpin Faust (Harvard Uni- Cynthia Kenyon (University of Quincy Jones (Quincy Jones Pro- at Johns Hopkins University. versity) was named the 40th Jef- California, San Francisco) was ductions) ferson Lecturer in the Humanities awarded a Dan David Prize. She Cornelia Bargmann (Rockefeller by the National Endowment for shares the prize with Gary Ruvkun University) is the recipient of the Sonny Rollins (New York, New unc the Humanities. (Harvard University). York) 11th Perl- Neuroscience Prize. She shares the award with Andrew Feinberg (Johns Hopkins Joseph LeDoux (New York Uni- Catherine Dulac (Harvard Uni- University) was named a Gilman versity) is the recipient of the 2011 versity). Scholar at Johns Hopkins Univer- Karl Spencer Lashley Award. sity. Charles Bennett (Johns Hopkins Arthur Levinson (Genentech) is University) was named a Gilman Marcus Feldman (Stanford Uni- the recipient of the American As- Scholar at Johns Hopkins Univer- versity) is the recipient of a Dan sociation for Cancer Research sity. David Prize. Margaret Foti Award for Leader- ship and Extraordinary Achieve- May Berenbaum (University of David Ferry (Wellesley College) ments in Cancer Research. Illinois at Urbana-Champaign) was awarded the Ruth Lilly Poetry was awarded the 2011 Tyler Prize Prize by the Poetry Foundation. for Environmental Achievement.

Bulletin of the American Academy, Spring 2011 53 Noteworthy

Maya Lin (Maya Lin Studio) is Jonathan D. Sarna (Brandeis Uni- Academy Fellows elected to New Appointments the recipient of the 2011 Thomas versity) is the recipient of the 2011 the American Philosophical Jefferson Foundation Medal in Martin E. Marty Award for the Society, April 2011 Kwame Anthony Appiah (Prince- Architecture. Public Understanding of Religion, ton University) was reelected Pres- given by the American Academy pen John McDowell (University of Svetlana Alpers (New York Uni- ident of American. of Religion. versity) Pittsburgh) is the recipient of a James Cuno (Art Institute of Chi- 2010 Distinguished Achievement Charles Simic (University of New John C. Avise (University of Cali- cago) has been named President Award from the Andrew W. Mel- Hampshire) was awarded the Vil- fornia, Irvine) and Chief Executive Of½cer of the lon Foundation. cek Prize in Literature. J. Paul Getty Trust. Richard Stephen Berry (Univer- Richard A. Meserve (Carnegie Solomon Snyder (Johns Hopkins sity of Chicago) Kenneth Kaushansky (State Uni- Institution for Science) is the re- University) was named a Gilman versity of New York at Stony cipient of the ½rst Vannevar Bush Scholar at Johns Hopkins Univer- Kenneth Burns (Walpole, New Brook) was elected to the Council Dean’s Medal, given by Tufts Uni- sity. Hampshire) of the Association of American versity School of Engineering. Gabrielle Spiegel (Johns Hopkins Natalie Zemon Davis (University Physicians. Peter G. Peterson (Peter G. Peter- University) was named a Gilman of Toronto) Richard Klausner (Column son Foundation) is the recipient of Scholar at Johns Hopkins Univer- Marcus William Feldman (Stan- Group) was appointed Chairman the 2011 Thomas Jefferson Founda- sity. ford University) of the Strategic Development and tion Medal in Citizen Leadership. Claude M. Steele (Columbia Uni- Scienti½c Advisory Council of Graham R. Fleming (University Sano½-aventis. Menahem Pressler (Indiana Uni- versity) was named a 2010 recipient of California, Berkeley) versity) is the recipient of the Life- of the Elizabeth Hurlock Beckman Maria Klawe (Harvey Mudd Col- time Achievement Award from Award. Richard J. Franke (John Nuveen lege) was appointed to the Board the 2011 International Classical Company) of Directors of Broadcom Corpo- Music Awards. Moshe Vardi (Rice University) is the recipient of the ieee Computer Paul H. Freedman (Yale Univer- ration. Carol L. Prives (Columbia Uni- Society’s 2011 Harry H. Goode sity) Anita K. Jones (University of Vir- versity) was awarded the Four- Award. Benjamin W. Heineman, Jr. ginia) has been named to the Fed- teenth Annual aacr Women in (Harvard University) eral Advisory Board of Digital Cancer Research Charlotte Friend Bert Vogelstein (Johns Hopkins University) was named a Gilman Reasoning. Memorial Lectureship. Sarah Blaffer Hrdy (Winters, Scholar at Johns Hopkins Univer- California) Cathy E. Minehan (Arlington Ad- Hilary Putnam (Harvard Univer- sity. visory Partners) has been named sity) was awarded the 2011 Rolf Elena Kagan (U.S. Supreme Paul Volcker (New York, New Dean of the Simmons College Schock Prize in Logic and Philoso- Court) School of Management. phy. York) received the 2011 Richard E. Neustadt Award, given by the Har- Larissa Adler Lomnitz (Univer- Hunter R. Rawlings III (Cornell C.N.R. Rao (Jawaharlal Nehru vard Kennedy School. sidad Nacional Autónoma de University) has been named Presi- Centre for Advanced Scienti½c Re- México) Harry H. Wellington (New York dent of the Association of Ameri- search) received a Dhirubhai Am- can Universities (AAU). bani-uaa Lifetime Achievement Law School) received the Presi- Glenn C. Loury (Brown Univer- Award. dent’s Medal of Honor from New sity) Henry Samueli (Broadcom Cor- York Law School. poration) was appointed to the Kyriacos C. Nicolaou (Scripps Judith Resnik (Yale Law School) Board of Directors of Broadcom Jeannette Wing (Carnegie Mellon Research Institute; University of was named a 2010 recipient of the Corporation. Elizabeth Hurlock Beckman University) is the recipient of the California, San Diego) 2011 Distinguished Service Award Theda Skocpol (Harvard Univer- Award. Olufunmilayo Olopade (Univer- of the Computer Research Associ- sity) was named a Director of the sity of Chicago) Adam Riess (Johns Hopkins Uni- ation. Association of American Colleges versity) was named a Gilman Schol- Robert C. Post (Yale Law School) and Universities. ar at Johns Hopkins University. Amnon Yariv (California Institute of Technology) is the recipient of ieee Robert J. Sampson (Harvard Uni- Matthew Tirrell (University of Gary Ruvkun (Harvard Univer- the 2011 Photonics Award. versity) California, Berkeley) has been ap- sity) was awarded a Dan David pointed founding Pritzker Direc- Prize. He shares the prize with Matthew Zapruder (May Sarton Anne-Marie Slaughter (U.S. De- Award recipient; University of Cal- tor of the University of Chicago’s Cynthia Kenyon (University of partment of State; Princeton Uni- Institute for Molecular Engineer- California, San Francisco). ifornia, Riverside) was awarded a versity) Guggenheim Fellowship by the ing. John Simon Guggenheim Memo- Patrick Thaddeus (Harvard Uni- Margaret C. Whitman (Atherton, rial Foundation. versity) California) is Strategic Advisor at Kleiner Perkins Cau½eld & Byers.

54 Bulletin of the American Academy, Spring 2011 Select Publications Ronald Dworkin (New York Uni- Judith Resnik (Yale Law School) versity School of Law). Justice for and Dennis Curtis (Yale Law Hedgehogs. Belknap Press of Har- School). Representing Justice: Inven- Poetry vard University Press, January tion, Controversy, and Rights in City- 2011 States and Democratic Courtrooms. Carl Phillips (Washington Univer- Yale University Press, January 2011 sity in St. Louis). Double Shadow. Claude S. Fischer (University of Farrar, Straus and Giroux, March California, Berkeley). Still Connected: Jonathan D. Sarna (Brandeis Uni- 2011 Family and Friends in America since versity) and Adam Mendelsohn 1970. Russell Sage Foundation, (College of Charleston), eds. Jews Robert Pinsky (Boston Univer- January 2011 and the Civil War: A Reader. New sity). Selected Poems. Farrar, Straus York University Press, May 2010 and Giroux, April 2011 Susan T. Fiske (Princeton Univer- sity). Envy Up, Scorn Down. Russell Simon Schama (Columbia Uni- Sage Foundation, April 2011 versity). Scribble, Scribble, Scribble: Fiction Writings on Politics, Ice Cream, Henry Louis Gates, Jr. (Harvard Churchill, and My Mother. Ecco, Chinua Achebe (Bard College). University). Black in Latin America. April 2011 Chike and the River. Anchor, August New York University Press, March 2011 2011 Theda Skocpol (Harvard Univer- sity) and Lawrence R. Jacobs Susan Howe (State University of Henry Louis Gates, Jr. (Harvard (University of Minnesota), eds. New York at Buffalo). That This. University) and David Bindman Reaching for a New Deal: Ambitious New Directions, December 2010 (University College London), eds. Governance, Economic Meltdown, The Image of The Black in Western Bharati Mukherjee (University of and Polarized Politics in Obama’s First Art. Belknap Press of Harvard Uni- Two Years. Russell Sage Foundation, California, Berkeley). Miss New versity Press, November 2010 India. Houghton Mifflin Harcourt, August 2011 May 2011 Oscar Hijuelos (Duke University). Charles M. Taylor (McGill Uni- Thoughts Without Cigarettes: A Mem- versity). Dilemmas and Connections: Francine Prose (New York, New oir. Gotham, June 2011 York). My New American Life. Selected Essays. Belknap Press of Harper, April 2011 Henry Kissinger (Kissinger Asso- Harvard University Press, Febru- ciates, Inc.). On China. Penguin ary 2011 Press, May 2011 Non½ction Gordon S. Wood (Brown Univer- David McCullough (West Tisbury, sity). The Idea of America: Reflec- Charles Bernstein (University of Massachusetts). The Greater Journey: tions on the Birth of the United States. Pennsylvania). Attack of the Dif½- Americans in Paris. Simon & Schus- Penguin Press, May 2011 cult Poems: Essays and Inventions. ter, May 2011 University of Chicago Press, May 2011 Bill Moyers (Public Affairs TV, Exhibitions Inc.). Bill Moyers Journal: The Con- David Brooks (New York Times versation Continues. New Press, May Wayne Thiebaud (University Company). The Social Animal: A 2011 of California, Davis): Exhibition Story of Love, Character, and Achieve- of works on view at The Morandi ment. Random House, March 2011 Sigrid Nunez (New York, New York). Sempre Susan: A Memoir of Museum in Bologna through James Carroll (Boston, Massa- Susan Sontag. Atlas & Co., April October 2011. chusetts). Jerusalem, Jerusalem: 2011 How the Ancient City Ignited Our Modern World. Houghton Mifflin Martha C. Nussbaum (University Harcourt, March 2011 of Chicago Law School). Creating We invite all Fellows and Capabilities: The Human Develop- For eign Honorary Members Joshua Cohen (Stanford Univer- ment Approach. Belknap Press of to send notices about their sity). The Arc of the Moral Universe Harvard University Press, April recent and forthcoming pub - and Other Essays. Harvard Univer- 2011 lications, scienti½c ½ndings, sity Press, January 2011 Meghan O’Rourke (May Sarton exhibitions and performances, Robert Darnton (Harvard Univer- Award recipient; Paris Review). The and honors and prizes to sity). Poetry and the Police: Commu- Long Goodbye: A Memoir. River- bulletin@ama cad.org. nication Networks in Eighteenth- head, April 2011 Century Paris. Belknap Press of Harvard University Press, Novem- Orhan Pamuk (Columbia Univer- ber 2010 sity). The Naive and the Sentimental Novelist. Harvard University Press, November 2010

Bulletin of the American Academy, Spring 2011 55 american academy of arts & sciences Norton’s Woods, 136 Irving Street, Cambridge, ma 02138 telephone 617-576-5000, facsimile 617-576-5050, Academy President Receives email [email protected], website www.amacad.org Honorary Degree academy officers Louis W. Cabot, Chair of the Board and Trust Leslie Cohen Berlowitz, President of the Acad- Leslie Cohen Berlowitz, President and William T. Golden Chair emy, was awarded an Honorary Doctorate of Hu- John S. Reed, Treasurer mane Letters from Northeastern University during its commencement ceremony on May 6, 2011. Jerrold Meinwald, Secretary Gerald L. Early, Cochair of the Council In announcing the honorary degree, Northeastern Neal Lane, Cochair of the Council President and Academy Fellow Joseph E. Aoun John Katzenellenbogen, Vice Chair, Midwest cited her national leadership on humanities schol- arship and policy. Aoun called Berlowitz “a cham- Jesse H. Choper, Vice Chair, West pion of the liberal arts and a strategic thinker about issues that affect higher education.” publications advisory board

Jerome Kagan, Chair; Steven Marcus, Editor; Jesse H. Choper, Academy Fellow Henri A. Termeer (Genzyme Denis Donoghue, Gerald Early, Linda Greenhouse, Jerrold Meinwald Corporation) received an Honorary Doctorate of Global Business from Northeastern University and editorial staff was the commencement speaker at the ceremony.

Phyllis S. Bendell, Director of Publications Micah J. Buis, Associate Editor Erica Dorpalen, Editorial Assistant Scott Eaton Wilder, Design & Layout Initial design by Joseph Moore of Moore + Associates

Bulletin Spring 2011 Issued as Volume lxiv, Number 3 © 2011 by the American Academy of Arts & Sciences The Bulletin of the American Academy of Arts & Sciences (issn 0002–712x) is published quarterly by the American Academy of Arts & Sciences. Periodi cals rate postage paid at Boston, ma, and at additional mailing of½ces. Post master: Send address changes to Bulletin, American Acad- emy of Arts & Sciences, 136 Irving Street, Cambridge, ma 02138. The views expressed in the Bulletin are those held by each contributor and are not necessarily those of the Of½cers and Fellows of the Amer- ican Acad emy of Arts & Sciences.

photo credits

Steve Rosenthal inside front cover Marcus Dejakaisaya page 1 Martha Stewart pages 3, 36–37, 39, 41, 45–46

NYU Photo Bureau: Madere page 5 Courtesy of Mary Knox Merrill/Northeastern University Joseph E. Aoun and Leslie Cohen Berlowitz Wendy Barrows pages 7, 14 Ron Searcey page 20

56 Bulletin of the American Academy, Spring 2011 Special Thanks to Academy Members and Donors

A total of $7.4 million was raised in the ½scal year completed on March 31, 2011. The Academy’s Annual Fund surpassed the $1.5 million mark for the fourth consecutive year with nearly 1,200 donors contribut- ing; additional gifts and grants totaled $5.9 million. “Every gift and grant was important to achieving these results,” said Alan Dachs, Development and Public Relations Committee Chair. “The Academy is fortunate to have the interest and support of so many Fellows, foundations, university and corporate af½li- ates, friends, and staff members.” Dachs expressed his deep appreciation to the Fellows serving as mem- bers of the committee during the past year, including Louise Bryson, Richard Cavanagh, Jesse Choper, Michael Gellert, Charles Haar, Stephen Stamas, Donald Stewart, Samuel Thier, and Nicholas Zervas, along with the continuing involvement of Board Chair Louis Cabot.

“We are particularly grateful to a growing number of leadership donors,” said President Leslie Berlowitz. “Our research projects are having increasing impact in shaping informed national policy. This work, a wide range of publications, and our programs around the country depend on the resources provided by successful fund-raising efforts.”

A complete list of 2010–2011 contributors will appear in the Academy’s Annual Report, which will be published in the fall.