Despite government-funded academic science having far more economic activity than the major U.S. sports leagues combined, Paula Stephan is one of the few (perhaps only) economists to look at that economic sector. Recently, Stephan has argued that government-funded academic science is best thought of as a shopping mall (boldface mine):
Universities of today are a far cry from those of the 1940s, having been transformed from a focus on educating students and taking care of patients, to placing a high—if not the highest—value on research. In many ways universities in the US have come to resemble high-end shopping malls. They are in the business of building state-of-the art facilities and a reputation that attracts good students, good faculty, and resources (Stephan 2012). They turn around and lease the facilities to faculty in the form of indirect costs on grants and the buyout of salary. To help faculty establish their labs—their firm in the mall—universities provide start-up packages for newly hired faculty. External funding, which was once viewed as a luxury, has become a necessary condition for tenure and promotion.
She describes three consequences, none of which will be especially surprising to academic scientists:
- Tight funding levels combined with the professional career need to obtain funding leads to risk-averse proposals. Ironically, the original justification for government funding was to encourage risky science that wouldn’t occur in industry.
- There is a PhD glut, propaganda notwithstanding.
- Universities have overbuilt their biomedical facilities and infrastructure, and most have excess capacity.
But it’s the early days of the NIH and NSF that blew my mind (boldface mine):
The Endless Frontier set about to grow research capacity at universities and increase the supply of individuals qualified to do research. The agencies that it established or greatly enhanced (NSF and NIH) supported faculty research in the form of funds for equipment, supplies and faculty summer salary. Occasionally, they paid for research assistants and postdoctoral trainees, although, as Bush intended, they originally focused their efforts on supporting training through scholarships and fellowships. The indirect rate was as low 8% at NIH; at NSF, which did not open for business until 1952, the rate was initially set at 15%. In the beginning, these agencies were in missionary mode, encouraging individuals to submit proposals and students to apply for fellowships. “It wasn’t anything to travel 200,000 miles a year” to accomplish this goal, to quote one NIH officer circa 1950 (Strickland 1989).
They had to convince faculty to apply for the money. Blows my mind.