Tuesday, May 27, 2003
As I noted in the comment, I think Richard McKenzie has the right take on this. The academic workplace is pretty democratic, by which I mean that one's future pay and working conditions are determined by the people you work with. In the social sciences and the humanities, there is a tendency to shifting fads in scholarship. (This is not as true in business and the natural sciences, though I'm sure there are scattered counter-examples.) In order to engage in the academic life, one will wish to receive some assurance that these shifting fads will not cause one to be suddenly put out in the street because s/he doesn't research in the "in" or acceptable fields. This is a far more compelling argument for tenure than the "external pressure" arguments about academic freedom that attended stories like Paul Sweezey's at New Hampshire in the 1950s.
It neatly explains a couple of things. First, as McKenzie points out, it explains why you see tenure in a university setting and not elsewhere. There's a nice, testable hypothesis -- the more democratic the workplace, the more likely you are to see tenure demanded by workers and granted by employers. Counter-examples, please? Second, the presence of tenure would explain lower salaries in the university. (Econ-types, here's a problem: A 40-year-old tenured full professor of economics has a choice whether to stay in her current job paying $65,000 per year and a private-sector job paying $90,000. There's a 20% probability every year that she will separate from the private-sector job -- i.e., jobs last about 5 years -- and it takes about 6 months to generate another comparable job. She expect to retire at age 65. Should she change jobs if her time rate of discount is 4%? 12%? What is the critical discount rate that tips her decision one way or the other?) Some of the discussion on IA's latest post suggests that the abolition of tenure in England has been met with lower, not higher wages, as the theory would predict -- but it's questionable whether tenure has been reduced. And that doesn't obviate the need to show that the democratic nature of the academic workplace hasn't changed with the change in tenure rules. And, moreover, if it is difficult to pass through the wage increases to tuition-payers then we may not see the rise in wages right away. It may need to wait for a period of higher demand for education.
So what to do with the excess supply of historians and literature professors? One point about the economics of this is that two-tier or three-tier pricing -- a tenure track, a non-tenure, full-time renewable track, and an adjunct track -- does at least produce more jobs than would exist with a single track. Any principles of economics book will teach you that you get more efficient solutions with this type of "price discrimination". And with it comes more classes, more students, and more education. That's a thing worth having. Certainly some PhDs will lose the tournament for the tenure track, but their willingness to work without tenure or part-time produces something of real value. Tinkering with the system may be more costly than we realize.