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Is the American economy really like a university?

In his New York Times column today, David Brooks analogizes the government's proper role in the economy to an administration's actual role in a modern U.S. university:

[G]overnment will be a bit like the administration of a university. A university president is nominally the head of the institutions. He or she lives in the big house. But everybody knows a university president is a powerful stagehand.

The professors, the researchers, the tutors, the coaches and the students are the real guts of a university. They handle the substance of what gets done. The administrators play vital but secondary roles. They build the settings. They raise money. They recruit and do marketing. They help students who are stumbling.

The administrators couldn't possibly understand or control the work in the physics or history departments. They just try to gather talent, set guidelines and create an atmosphere where brilliance can happen.

Mulling it over, this is a better analogy than even Brooks indicates. The administration/everyone else dynamic at a university also captures the feelings that often predominate debates about the role of government in society.

To be specific:

1) Most faculty and students do their damndest to simply ignore the fact that a university administration actually exists.

2) Most faculty and students cultivate an active ignorance about things like budgets, revenues, etc.

3) The only time any university administration is popular is when it has resources to dole out;

4) Any time the administration interferes with what faculty, students, etc. want to do it provokes fierce resentment -- unless the faculty/student is in trouble, in which case the hope is that the administration will make it all better.

5) Trying to change any aspect of university governance is, I suspect, even more difficult than trying to get a law passed through Congress.

6) Paying customers rack up massive debts and inevitably feel like they're not getting close to their money's worth, even though the data suggests that the pecuniary rewards from going to college are pretty significant.

7) Even if administrators lack local knowledge about the research going on in their schools, they're nevertheless sure that they completely understand the research.

8) Even though administrators come from the faculty, approximately 99.8 percent of all faculty are completely ill-suited for administrative responsibilities.

Brooks uses this analogy because of his argument for how the global economy will function in this century:

In this century, economic competition between countries is less like the competition between armies or sports teams (with hermetically sealed units bashing or racing against each other). It's more like the competition between elite universities, who vie for prestige in a networked search for knowledge. It's less: "We will crush you with our efficiency and might." It's more: "We have the best talent and the best values, so if you want to make the most of your own capacities, you'll come join us."

The new sort of competition is all about charisma. It's about gathering talent in one spot (in the information economy, geography matters more than ever because people are most creative when they collaborate face to face). This concentration of talent then attracts more talent, which creates more collaboration, which multiplies everybody's skills, which attracts more talent and so on.

Well.... economic competition among countries has been something of a misnomer since the start of the Industrial Revolution. It's mattered only in the sense that geopolitical competition exists. To put this into concrete terms, from a strictly economic perspective China's massive growth is an unalloyed good for Americans, because it means a future growth market for U.S. goods and services. It good becomes slightly less pure only when people start worrying about a) whether China will convert its growing wealth into power; and b) whether Chinese power will advance interests that conflict with the United States.

More importantly, however, there's a way in which Brooks' model is the great power equivalent of the Dubai model of economic growth -- and as I noted earlier this month, a world in which everyone races after the Dubai model is a world of massive overinvestment and inadequate demand. Like the dollar auction game, a few countries might win, but most will lose in pursuing this strategy.

Readers are warmly encouraged to provide more ways in which the administration/university relationship is akin to the government/economy relationship.

Daniel W. Drezner

This week on Thucydides Abuse Watch

Your humble blogger likes to occasionally check the interwebs to make sure that no one is abusing Thucydides in making an argument about modern-day international relations. In descending order of offensiveness, examples of Thucydides Abuse include:

1) Blatantly making up what Thucydides actually said in History of the Peloponnesian War;

2) Exaggerating how Thucydides can contribute to understanding world politics today;

3) Writing the truth, but not the whole truth, about Thucydides' history.

Yesterday David Sanger invoked Thucydides in his New York Times Week in Review essay on a rising China and a fading United States. Let's see how he did:

For a superpower, dealing with the fast rise of a rich, brash competitor has always been an iffy thing....

[A]sk Thucydides, the Athenian historian whose tome on the Peloponnesian War has ruined many a college freshman's weekend. The line they had to remember for the test was his conclusion: "What made war inevitable was the growth of Athenian power and the fear which this caused in Sparta."

So while no official would dare say so publicly as President Hu Jintao bounced from the White House to meetings with business leaders to factories in Chicago last week, his visit, from both sides' points of view, was all about managing China's rise and defusing the fears that it triggers. Both Mr. Hu and President Obama seemed desperate to avoid what Graham Allison of Harvard University has labeled "the Thucydides Trap" - that deadly combination of calculation and emotion that, over the years, can turn healthy rivalry into antagonism or worse....

[I]n both capitals, fear makes for good business: It's a proven way to sell weapons systems.

Meanwhile, Thucydides might be appalled at the nationalistic talk that resounds in both countries. In Chinese newspapers these days, it's hard to avoid accounts of "American decline." Meanwhile, some new members of Congress talk lightly of cutting off Chinese access to the American market - as if that could happen in today's global economy.

In both languages, that's fear talking.

You know what? Given the space constraints, Sanger does pretty well. He manages to nail the subtle point about how fear leads to the worst sort of policy decisions. It is telling that, as the war progresses, Athenian decision-making devolves. Initially, the country's leaders understand that "fear, honor and interest" guide foreign policy. By the time the invasion of Sicily comes around, however, the Athenian leadership has reduced this to fear. Sanger actually quotes Thucydides rather than paraphrasing him. By modern journalistic standards, that's pretty extraordinary.

Nonetheless, Sanger commits the misdemeanor of omitting the whole truth of Thucydides. This is important, because the omission gets at how the historical analogy doesn't really hold up.

First, Sparta was never the hegemonic power prior to the war -- at best, they were a co-equal of Athens. That's not the current situation.

Second, Sparta was scolded by its allies -- and implicitly, by Thucydides himself -- for excessive caution when confronted with a rising power. Throughout the History of the Peloponnesian War, Thucydides contrasts Athenian energy and dynamism with Spartan conservatism and risk-aversion. Spartan fear was triggered by past Spartan inaction and caution.

Now, say what you will about American foreign policy, but conservatism and risk-aversion have not been nouns associated with it for quite some time. Similarly, until about mid-2009, China was not thought of as a source of foreign policy dynamism. Furthermore, when China's foreign policy changed, so did the United States'. Comparing the Obama administration's response to Spartan inaction doesn't hold up.

In the sparest structural sense, there are a few parallels that can be drawn between Greece in the fifth century B.C.E. and the present day. On the whole, however, I think the Athens-Sparta historical analogy obfuscates more than it enlightens.

Readers are warmly encouraged to alert the hard-working staff here at the blog for any further abuses of Thucydides. I mean, you know this is going to crop up on the next Jersey Shore episode.