Science for Sale – The Perils, Rewards and Delusions of Campus Capitalism - Hardcover

Greenberg, Daniel S

Hardcover

ISBN 10: 0226306259 ISBN 13: 9780226306254

Publisher: University of Chicago Press, 2007

Synopsis

In recent years, the news media have been awash in stories about increasingly close ties between college campuses and multimillion-dollar corporations. Our nation's universities, the story goes, reap enormous windfalls patenting products of scientific research that have been primarily funded by taxpayers. Meanwhile, hoping for new streams of revenue from their innovations, the same universities are allowing their research - and their very principles - to become compromised by quests for profit. But is that really the case? Is money really hopelessly corrupting science? With "Science for Sale", acclaimed journalist Daniel S. Greenberg reveals that campus capitalism is more complicated - and less profitable - than media reports would suggest. While universities seek out corporate funding, news stories rarely note that those industry dollars are dwarfed by government support and other funds. And, while many universities have set up technology transfer offices to pursue profits through patents, many of those offices have been financial busts. Meanwhile, science is showing signs of providing its own solutions, as highly publicized misdeeds in pursuit of profits have provoked promising countermeasures within the field. But just because the threat is overhyped, Greenberg argues, doesn't mean that there's no danger. From research that has shifted overseas so corporations can avoid regulations to conflicts of interest in scientific publishing, the temptations of money will always be a threat, and they can only be countered through the vigilance of scientists, the press, and the public. Based on extensive, candid interviews with scientists and administrators, "Science for Sale" will be indispensable to anyone who cares about the future of scientific research.

About this title

About the Author

Daniel S. Greenberg is a journalist who has written extensively on science and health politics. He is the author of Science, Money, and Politics: Political Triumph and Ethical Erosion and The Politics of Pure Science, both published by the University of Chicago Press.

Excerpt. © Reprinted by permission. All rights reserved.

Science for Sale

The Perils, Rewards, and Delusions of Campus Capitalism By Daniel S. Greenberg

The University of Chicago Press

Copyright © 2007 Daniel S. Greenberg
All right reserved.
ISBN: 978-0-226-30625-4

Contents

A Background Note and Acknowledgments.....................................viiIntroduction..............................................................1Part One: The Setting and the System1 Money for Science: Never Enough.......................................112 Elusive Industrial Angels.............................................383 Commercialize! It's the Law...........................................514 Changing Attitudes....................................................825 The Price of Profits..................................................1016 Conflicts and Interests...............................................1277 A New Regime..........................................................147Part Two: As Seen from the Inside-Six Conversations8 Success and Remorse...................................................1819 A Congenial Partnership...............................................19510 When the Rules Change in Midstream....................................20511 Profits and Principles................................................22012 Generations Apart.....................................................23313 The Journals Revolt...................................................243Part Three: Fixing the System14 What's Right and Wrong, and How to Make It Better.....................257Epilogue: A Parable for Our Time..........................................286List of Abbreviations.....................................................295Notes.....................................................................297Index.....................................................................313

Chapter One

Money for Science: Never Enough

We run our research enterprise primarily in a self-funding way, but not in a profit mode. So we have to work very, very hard on a competitive basis to bring in the monies to pay the people, to fund the indirect costs, which includes replacing buildings. Actually, we end up subsidizing research through other revenue sources in the medical center to keep it going. Some faculty members will be recruited here to become wonderful, superb clinicians and, in doing so, clinician-teachers. Others will be more in what we call the physician-scientist track, have very modest clinical activities, teach graduate students and basic-science medical students. And, yes, we expect them to fund almost all of their laboratory activities through external funds. Almost all faculty are expected to bring in most of their own support. We try to be very, very supportive, because anyone can have a short downtime. So we provide good, reasonable inter-grant support, but not forever. Robert P. Kelch, executive vice president for medical affairs and CEO, University of Michigan Health Systems

* * *

Most serious science in the United States is conducted in the big institutions known as research universities. The counts vary, but about fifty of them are in the scientific big leagues, conducting research and producing PhD's across at least several important disciplines; perhaps another fifty are striving to join them. On money matters, all these universities are puzzling and contradictory organizations. Virtually all describe themselves as hard-pressed financially, even as they ingest colossal sums from a variety of sources, accumulate huge endowments, and operate on enormous budgets. In 2006 Harvard's endowment reached $29.2 billion, a one-year increase of $3.3 billion, and its operating budget was nearly $3 billion. For the University of Michigan, the endowment in 2005 stood at $4.9 billion, and revenues for its three campuses-at Ann Arbor, Dearborn, and Flint-were $4.2 billion; for Stanford, $12.2 billion in endowment and a budget of $2.9 billion, plus a capital budget of $373 million; and for Johns Hopkins, $2.1 billion in endowment and a $2.4 billion budget. Their begging and searching for money never stops, while most practice miserliness in drawing upon their mounting endowments. Exempted from federal regulations that require tax-exempt foundations to spend at least 5 percent of their endowments annually, most universities spend less-in 2004, 4.5 percent each for Harvard and Yale, 4.1 percent each for Princeton and the University of California. A few spend more, but very little more. Despite the appearance of wealth, annual increases in tuition above the rate of inflation are a common feature of academic finance, though price-cutting deals are routinely made to bring in academically high-ranking students and other desirables, particularly star athletes and, lately, impoverished minority members who show academic promise.

With populations of students, faculty, and staff running into the scores of thousands, big universities are modern versions of the city-state. The University of Wisconsin-Madison, for example, lists 41,000 students, 2,250 faculty members, and 7,000 professional and administrative employees. Arizona State University, with 61,000 students in 2005, aims to enroll 95,000 by 2020 and double its research budget-which stood at $183 million in 2005-within three or four years. Employing persistent and sophisticated dunning methods, fund-raising campaigns run continuously in academe, with the billion-dollar mark, or more, often set as an inspirational goal at the mega-institutions. In 2003-4, gift collections totaled $540 million at Harvard, $524 million at Stanford, and $385 million at Cornell. The Chronicle of Higher Education periodically reports the progress of the twenty to twenty-five universities running billion-dollar, or more, fund-raising drives.

Universities possess their own security staffs, residential housing, schools for children, health facilities, newspapers and TV stations, theaters, places of worship, recreation facilities, and even courtlike bodies for judging infractions by both students and faculty. Like sovereign governments, they hold elections and they levy taxes, known in their context as tuition. Universities are increasingly innovative in developing relationships outside their boundaries, with local and national business firms, surrounding communities, and the federal and state governments. And they're constantly tinkering with their programs, with student internships, study abroad, combined undergraduate and graduate studies, and course offerings without bounds. A hoary legend of academe has it that Woodrow Wilson, in his frustrating pre-White House years as president of stodgy Princeton University, complained: "It's easier to move a cemetery than it is to change the curriculum." True at a few schools today, but not many.

In many settings, such as Johns Hopkins University, in Baltimore, the vast Boston-Cambridge higher-education concentration, the University of Michigan-Ann Arbor, and several University of California campuses, universities are the biggest or among the biggest employers and spenders in the region. They look rich, even while maneuvering around the operating deficits that chronically plague many of them. Small colleges occasionally collapse and disappear for lack of money and students. Following publication in 1910 of the Flexner Report on medical education, scores of substandard, for-profit doctor-training mills went out of business. In a rare modern occurrence, two smallish, free-standing medical schools in Philadelphia merged in 1993 to become MCP Hahnemann University, which was merged into Drexel University in 2002 as the Drexel University College of Medicine. In 2004 Britain's University of Manchester Institute of Science and Technology disappeared through a merger with the University of Manchester, to form a supersize university with global ambitions of scientific and academic greatness. Except for such events, which are extremely rare, big universities possess a unique quality: they are immortal. Founded in 1088, the University of Bologna is still there. So are Oxford and Cambridge (twelfth and thirteenth centuries), Harvard (1636), Yale (1701), Princeton (1746), and hundreds of others from prior centuries. Empires dissolve. Nations split. Religions fragment. Dissolved or absorbed in mergers are numerous corporate behemoths of yester-year: Studebaker, Packard, American Motors, Pan Am, TWA, RCA, Bethlehem Steel, Wang, Digital Equipment-all prey to capitalism's unsentimental "creative destruction," or mismanagement. In contrast, universities survive, and expand, situated in their own specially insulated, nurturing economy, based on government support, philanthropy and private gifts, unrestrained pricing for coveted enrollment slots, and freedom from taxation. Like potentates of yore, university leaders regard expansion as an imperative. The surrounding world encourages their ambitions. As societies grow in complexity, needs expand for the training, education, and professional certification provided by universities. Hundreds of institutions have metamorphosed from small seminaries and teachers and agricultural colleges to four-year arts and sciences colleges and then onward to the sprawling, academically diversified, PhD-granting universities that are the flagships of modern higher education. Aggressive pursuit of growth-for students, money, programs, buildings, even acreage-is an ingrained trait of modern universities. A modern expansionist tactic creates satellite campuses in their region, and even farther beyond, including in other nations. The top universities have become notorious for student-recruitment wiles that emphasize, and frequently exaggerate, their exclusivity; many of the lesser institutions, however, scrape to fill their classes, often employing consultants skilled at ferreting out the needed students. The infusion of corporate culture into the modern university is reflected in help-wanted ads for skills far distant from teaching, research, and the traditional tasks of academic administration. Thus, not atypically, the University of Idaho announced that it was seeking an assistant vice president for marketing and strategic communications who will be

responsible for managing the university's image, media relations, publications, advertising, world wide web communications, university branding, corporate identity, communications planning, presidential communications, event promotion, crisis communications and market research.

In Greatest Need of Money

The costliest parts of the modern university are the science, engineering, and medical components. Like the very rich, they need more money because they spend more money to satisfy their expensive tastes. They excel all other academic fields in drawing money to the university, wads of it from government agencies specially created to finance them. For bringing glory and public attention to a university, the science-related departments are exceeded only by the athletics department. But, unlike athletics, which are often a money-losing proposition, the sciences also bring universities a kind of income little known to the outside world but extremely appealing in the stringent environment of university finance: reimbursement for indirect costs, also referred to as overhead costs, which are distinct from the readily visible direct costs of research, such as equipment, supplies, and salaries.

Indirect costs are the nonscience expenses that a university incurs from the presence of research on its campus, such as security guards for the laboratories where the research is conducted, depreciation, library services for the scientists in the laboratories, and financial staff to track their money, write their paychecks, process orders for their equipment and supplies, and pay the electric bill. To maintain the fiction of a government-university financial partnership in research, Washington-the main source of money for academic research-pays only part of the claimed indirect costs, leaving the balance to the university as its share of the tab. Nevertheless, for each of the big research universities, with receipts of hundreds of millions of dollars a year in federal research funds, reimbursement for indirect costs provides additional scores of millions of dollars. The computation of these costs has developed into an arcane accounting specialty, but the outcome is a large helping of federal money atop the money specifically destined for the laboratory. The amounts awarded for indirect costs ostensibly range from about 30 to 90 percent or more of direct costs, depending on the type of research and the characteristics of the institution. But with a variety of exceptions and caps written into the rules, the take invariably runs below the stated rate, averaging out to about 30 percent of direct costs. Even so, more research means more money coming in for indirect costs, a link that adds allure to acquiring federal grants. For the federal agencies that are the financial mainstays of academic research, the slice of their budget taken by indirect costs annually totals billions of dollars. In 2005, when the NIH budget totaled $28 billion, $5.9 billion of that sum was expended on indirect costs, that is, costs incurred outside the laboratories but on the campuses of the NIH's academic beneficiaries. In that year the budget of the National Science Foundation stood at $5.4 billion, of which $980 million went to indirect costs. Underlying this academic-government partnership in science are strong political and cultural convictions that science is beneficial for the country, and that universities are a good place to do science because they train new generations of scientists and are, or should be, bastions of independent expertise for dealing with public problems.

While the reality of those expenses generated by science on campus is not disputed by the government, universities contend that the indirect costs are burdensome and the federal funds to cover them are insufficient. But in the hardscrabble world of university finance, they accept what they can get. Private foundations recognize that indirect costs also arise from their philanthropy, but they generally hold the level down to 15 to 20 percent. Even at these low rates, they do not lack academic takers.

The humanities can get along with books, a modest amount of travel and conference expenses, graduate stipends, and relatively simple computer facilities. Washington knows that and gives the National Endowment for the Humanities a mere $150 million or so a year, while the university-based medical and physical sciences annually receive over $30 billion. From this sum, a few crumbs are provided for the social sciences, but the great bulk of the money is for "real" science: biology-related research, physics, chemistry, astronomy, engineering, plus their interdisciplinary offshoots and a few others. Humanists helplessly rail against the disparity, as in a recent essay in the Chronicle of Higher Education:

Never before has there been such inequality among the disciplines and schools that make up a university.... Disciplines like history, sociology, philosophy, the visual arts, and literature were once seen as the heart of the university, respected as sources of wisdom about the human condition. But over the last 10 years, faculty members in those disciplines have become the poor relations of the hard-science powerhouses, who have higher salaries, greater abilities to hire, and better chances of attracting better students, who will themselves leave with better jobs.

The so-called real sciences basically operate in two realms, both heavily financed by their federal patrons. First there are "user" facilities for the huge and costly equipment of modern science, such as particle accelerators, synchrotrons, radio and optical telescopes, along with the panoply of hardware and services needed for oceanography, space research, and other fields of "big science." Scientists from various universities compete to use these facilities, which are usually managed by university consortia. Then there are home-campus facilities, roomy halls of costly equipment constantly threatened with obsolescence by new and, invariably, costlier equipment. A couple of million dollars to equip and staff a laboratory for a new hire is not unusual. While chatting with a scientist in a characteristically crammed office/laboratory, he cautioned me not to bump against a piece of equipment close by the only open space for a visitor's chair. "That costs $150,000," he said. To stretch their budgets, government research agencies request scientists to share expensive equipment, especially apparatus that is used intermittently. But scientists like to have their own equipment, nearby and available when they want it. If the money is to be had-and often it is-they'll acquire their own, even if the very same equipment down the hall is mostly idle.

(Continues...)

Excerpted from Science for Saleby Daniel S. Greenberg Copyright © 2007 by Daniel S. Greenberg. Excerpted by permission.
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Edition details

• Publisher: University of Chicago Press
• Publication date: 2007
• Language: English
• ISBN 10: 0226306259
• ISBN 13: 9780226306254
• Binding: Hardcover
• Edition number: 1
• Number of pages: 288