Austerity is hitting lots of people, across pretty much all social classes, except for the top 1 per cent, who are rapidly recouping their losses in the GFC and will soon be pulling even further away from the 99. Just at the moment, academics seem to be in the crosshairs, from Washington to Sydney and beyond. Here’s a post on the subject from my friend and former colleague Rohan Pitchford. To forestall a possible line of criticism, let me observe now that, while academics have it better than plenty of others under attack from austerity policies, anyone who plays on this kind of division is a tool of the 1 per cent, and will be treated as such by me.
Sackings Hit Economics School Hard (Guest post from Rohan Pitchford)
I was surprised and dismayed to hear that that several of my former colleagues at the School of Economics at the University of Sydney have been told to leave their jobs by July. A remarkable aspect is that the sackings happened by edict, several layers of administration above the School level. How is it possible for such a removed group to know the details of people’s work life, their roles and the reasons behind their roles without any form of consultation? (ANU also faces budget cuts, but is taking the enlightened bottom-up approach.)
I know all of those concerned personally, and the group includes both talented researchers, teachers and administrators. They were apparently selected using retrospective publication criteria. We all know that most people experience a ‘bare patch’ in their publications during the life course, whether it be because of a new child, a death in the family, illness (admin duties!) etc. Knowing the people involved, the criteria seem to me unfair and random.
Perhaps the most astounding fact in all of this is that Sydney Economics has been perennially understaffed– as a Professor there, I estimated that they were some 10 academics short of what is required to deliver requisite courses: The average class size is 110, I conjecture larger than any other department. There are not enough staff to cover all the classes taught, let alone to reduce class sizes to educationally appropriate levels. Sydney typically has had to hire part-timers to fill the gap. The department generates some 20 million dollars per year in revenue from its teaching program. I cannot imagine that this will do anything but hurt this important revenue base.
A big question is this: Are the sackings due to productivity, or are they in response to an administration that has grossly over-spent on buildings? I have heard rumours of expenditure of 100m on a new medical centre, and 360m on a new obesity centre preceded these sackings.
Solutions? I discuss a possible way forward for Australia here:
John Quiggin 
No ‘real’ economist would say what many flesh and breathing economists say.
Very clever …
@Tim Macknay
Actually the update is pretty easy using RBA and ABS data.
The diamond device was also used in “Australia reconstructed”.
The Commonwealth parliamentary research service also publish additional data in one of its working papers.
Of course its a game – sometimes they wail about unemployment, later they wail about inflation, then later they wail about debt. Each is just a facet.
We need to wail about capitalism.
@James Haughton
A 20 year struggle is about right, but it ran from the 70s to the 90s. It was already pretty much in the past when I was at Sydney (in Ag Econ) in the late 80s. Most of the leading protagonists retired years or decades ago. So, I don’t think there’s much justification for blaming the current members of the Econ Dept.
Still, the question you raise is a good one.
@Wylie Bradford
What a nutty diatribe that, in general, does not deserve a response. However I am interested in your suggestion that:
Keyne’s ‘user cost’ is:
This is more difficult because intermediate goods are also capitalised. If I spend $100 in using-up “intermediate goods”, and the rate of profit is 10%, then the passed-on price is $110.
So we need to be clear what is being netted out.
Do you have an example?
@Tom N.
You need to listen more. I deliberately did not include ‘on its own’ because this was entirely your mistake.
This was your misunderstanding of what was said. Or maybe you were trying to deflect attention???
No-one has suggested anything about debt ‘on its own’.
It is reasonable to take a long-winded “does not tell us much of relevance” to mean “no relevance”. It is interesting that you resort to such nit-picking games.
@Chris Warren
Yeah, nice avoidance.
I’m not defending Keynes’s definition of user cost to the hilt, merely pointing out what he was *attempting* to do (perhaps quite unsuccessfully) as a way of highlighting (possibly superfluously) how utterly risible it is for you to hold it up as the epitome (your word) of what’s wrong with economic theory in general. Someone who throws around ‘equilibrium’, ‘marginal’, ‘subjective’ (the usual PE buzzwords – what, no place for ‘methodological individualism’?) as part of a nebulous critique of economics and then produces Keynes’s user cost as the rhetorical coup de grace clearly has no idea about the history of economics or the nature of economic theory. No first-hand idea anyway. They may well have excelled in absorbing a prefab critique.
So Chris, you misrepresent my statement in an material way*, and its entirely my fault! Brilliant!
Alas, there seems little point in discussing matters further with you. You are clearly comfortable to criticise straw economic men of your imagination’s own creation using loose pejorative labels such as “neoliberal” and, when rigour is sought, you seek to deflect and avoid. And when I (politely) pointed out your misrepresentation of me, you sought to shoot the messenger, rather than accepting your clear error and retracting.
Feel free to maintain your rage against those “nasty, narrow-minded, New Right, neoliberal economic rationalists” though, if it makes you feel good. Just don’t expect to be taken too seriously in more knowledgeable company.
___________
* Why did I say “on its own” and why was it material? Because in response to my challenge to show that the economy and future is being laid to waste by thanks to economists, your response (comment #21) was, in total:
That is, your response went no further than the issue of debt. My point is that, on its own, debt increase tells us little of relevance. You have effectively acknowledged the turth of that by attempting to add to it in subsequent posts.
I am obviously the only person who feels this way but:
In the real world, when I was an employee my contract wasn’t renewed due to lack of funds. I started my own business, and have employees. If things were to deteriorate I would have to dismiss one or more of them. When less money comes in, less goes out.
What makes academia different?
@Wylie Bradford
Your rhetoric is impenetrable.
Tagging common concepts as ‘buzzwords’ doesn’t help.
If you have a view about Keynes’ “user cost”, I’d be interested in hearing it.
@Tom N.
At this stage, as you have ignored all the clarification which has been placed in front of you, the face at the bottom of the well is your own.
If you want to challenge a statement, by all means. But you need evidence.
You may like to start at the beginning.
I do not support that debt is the only problem. This line is generally associated with Keen’s and Minsky. Debt problems are a symptom.
The top one per cent are getting subsidised much more than any standard welfare recipient, young or old. This is because the top one percent, under our current monetary arrangements, share in the new money creation gains with the banks. We might say that they get a cut in the “fractional reserve/central bank subsidy.
I was told by a mortgage broker, that I was maybe in the top 5% in terms of the people he sees asking for loans. What this means in practice, is that if I could live forever, from about 15 years from now, I’d be on an endless money-train. Where the subsidised interest rate, was just making me richer and richer year after year. This is a scandal. And it ought to be seen as such. The righteous way for people to get rich legitimately is to start small businesses and grow them to be medium sized businesses. But the fractional reserve subsidy spreads out unrighteous gains, all through our society, and by no means excluding our overpaid bigshots in the large corporations.
This is not any fair version of capitalism. This is not capitalism as such.
@Chris Warren
LOL. Translation: I can’t justify the (obviously stupid) claim that Keynes’s user cost is the epitome of what’s wrong with economic theory because I lack the required knowledge and understanding.
Concepts become buzzwords when habitually used by those who don’t understand them.
Why should I have a view on user cost. You introduced it, and imbued it with inexplicable significance.
@Wylie Bradford
Please read what was said – not what you imagined.
No-one has said that “Keynes’s user cost is the epitome of what’s wrong with economic theory”.
rather – the several underlying theories that embed capitalist forms are the problem – Keynes’ ‘user cost’ is the epitome (of these theories). I named three other examples. User cost is not, by itself, responsible for the problems of capitalism.
Similar problems also occur with capitalist forms of equilibrium, the capitalist use of marginalism, and also the capitalist notion of subjective theory of value.
If you do not have a view on user cost, or see no need for a view, what did you mean by:
Perhaps economists could re-apply for jobs in the foreign languages faculty.
@Chris Warren
The further it goes the more garbled and incoherent you become. The reason why I have no particular view on Keynes’s user cost concept is that it is scarcely relevant to anything important. The fact that you appear to want to make it so is the marker of the fact that you have no idea what you’re talking about. As such your original comments about what economics departments are like are worthy of no consideration.
@Wylie Bradford
I would not be so sure.
A bit busy lately.
John, you say: ‘ANU also faces budget cuts, but is taking the enlightened bottom-up approach.’ Not so. ANU has a $14 m profit but it is not enough, according to the VC. last year return on investments fell $30 m, and depreciation on buildings increased $10 m. So obviously the ANU needs to sack between 100 and 150 staff to fix that up. Capital has a problem and it makes labour pay. Nothing enlightened about that. And at RMIT there are now be nice and smile declarations that staff are forced to sign, presumably to sack them when they are not. And Stephen Schwartz in the AFR banging on about education and business models. Maybe the Labor and Coalition governments’ underfunding or universities should be discussed.
Sorry John. It was Rohan who said it.
Wow, that Chris Warren’s a rather nasty piece of work, eh?
Anyway, thanks John, and Rohan. The situation at Sydney is a mess. I can tell you, John, that the agricultural (and now, resource) economics group that you have an historical connection to is under serious threat.
I think a point that has not been given enough prominence in the discussions that I am seeing (which focus, understandably, on things like the unfair restrospectivity of the process, and whether it is a performance-management action tarted up as a response to a budgetary crisis) is this. The nature of the rules of this process means that social sciences and humanities across the campus will be hit far harder than sciences.
Many reserach scientists work in labs, and publish in teams (as in, literally enough people to field a soccer or cricket team, sometimes including reserves), and can publish multiple papers a year. Also the “standards of publishing” vary widely across disciplines. A colleague in engineering told me that it is standard practice for them to submit to “peer reviewed” conferences, where the rigour of review is slight and the acceptance rates high. (Journal papers are fewer, and further between, and meet a much higher standard.) This means there is very little chance any of them will fail to meet a 4-papers-in-3-years target as long as refereed conference papers count.
I imagine the Dean of Arts and Sciences (which houses, inter alia, both Economics and Political Economy) has a much heavier job on his hands managing the individuals affected by this process than the Dean of Science. (Also, the incoming head of the School of Business will probably be overseeing the departure of a large number of academic staff. If, as is presumed, he re-fills those positions quickly, the lack of restriction on replacing staff made redundant suggests this is about perceived performance, not about budgetary crisis.)
In my own Faculty (and your former one, John) of Agriculture and ancillary stuff, our staff numbers are dominated by applied scientists, with agricultural and resource economists a distinct mionority. But the best intelligence I have available tells me that 80% of directly affected individuals in our faculty are in ARE.
@aidan
Further on the previous posts, you write:
“Still, the VC is targeting a 4% “surplus on budget”. Should this include costs for depreciation?”
Without further information, the first sentence does not have a unique meaning.
To illustrate, a budget is a financial plan for a period into the future (often but not necessarily 1 year). A plan entails a target.
Financial plans are usually in cash terms (not accrual accounting), in which case depreciation is not included, directly but indirectly via taxation, if applicable, and there may be a planned savings item for future capital replacement which may or may not be set equal to depreciation that is allowed for tax purposes or otherwise.
The expression ‘4% surplus on budget’, strictly speaking, makes no sense. A (cash) surplus means cash receipts exceed outgoings. This then constitutes planned savings and should be included in the budget.
Are you trying to say the receipts are 1.04 times the outgoings for the budget period? Or, are you trying to say, in comparison to last period’s budget the VC is targeting is a surplus of 4% in the current period’s buget?
You may have to study the financial information of the institution in detail to get clarity on your sentence.
@Michael Harris
“This means there is very little chance any of them will fail to meet a 4-papers-in-3-years target as long as refereed conference papers count.”
Not necessarily. The experts in performance mismanagement via KPIs have other tools such as preventing some staff to go to conferences via teaching allocation.
Focusing only on research output, as measured by DETYA, may involve a retrospective reallocation of workload, setting aside all else.
Soviet 5 year plans were based around meeting or exceeding a number of KPIs.
Interesting that those who independently dreamed up the same system of management in the West were free marketers.
Ernestine
Maybe, but I stand by what I said, which is that I expect the effect of the Spence/Garton clean-out to be predominantly felt by social sciences and humanities schools/departments. If as an engineering academic, I was having trouble finding time to GET to conferences to present, I could still submit co-authored work and have a co-author (who may be a student?) attend and present.
Since the retrospective rules of the Spence/Garton clean-out are “4-papers-in-3-years (minimum)”, without any reference to any measure at all, whatsoever, of publication quality OR of the number of co-authors involved, the net effect of this is going to be a disproprtionate impact on the non-sciences disciplines.
The example of my Faculty gives you something of a clue.
I don’t mean all the sciences (broadly defined) will be utterly unaffected. I hear stories of Vet Science reeling from the blow to one of its specialist areas, which could threaten the professional accreditation of its degree. I also hear stories of medical specialists who do life saving surgery during the day and then teach how it’s done to the next generation of surgeons coming through the ranks, but who don’t regularly publish — they’re apparently in the firing line (no pun intended).
But all that said, the Dean of Science is likely to be having far more relaxed a time of it than the Dean of Arts and Social Sciences. (And probably the Deans of Vet Sci and Medicine too.)
Michael,
I take (and took) your point immediately. I was trying to say it can get even worse.
Ernestine: ah, gotcha. And yes it can.
Freelander: if we knew what the KPIs were in advance, we could have responded accordingly. Most of the affected parties could have gotten book chapters or refereed conference papers out in sufficient quantities to meet the target, had the target been known in advance. The nature of the exercise is one of catching people by surprise.
The really is a lamentable tendency amongst some of John’s commenters to reduce topics to “Well, ha, those evil free marketeers are finally being hoist by their own petards! *madcackle*”
It’s really rather unnecessary. And distasteful.
The magic thing about KPIs is that those outside of the ‘in crowd’ are not supposed to meet them. That way they can be castigated for their sub par performance and in the case of some of your colleagues get canned. Those on the outer need to understand that they had it coming. Society just gets fairer and fairer.
Yes.
Some of those free marketers are being hoist. But, unfortunately, only now after and amongst the millions of innocents. Not much consolation at all.
So, take discussion of specific topic, and just word-vomit some stuff in the comments thread related to bees you carry around in your bonnet rather than discuss the thing under discussion?
OK. Good to know.
Well, wait a minute: “Some of those free marketers are being hoist” — maybe you COULD be specific. Perhaps you could name the names of the individuals you are referring to.
@Michael Harris
In these situations, names of individuals are not bandied about.
Nor should they be.
But you and Freelander know who they are? How important you must feel.
@Michael Harris
Now you’re simply getting a bit silly.
Very sorry that you too are feeling a bit stressed finally being at the pointy end of the ‘neoliberal revolution’.
Who could have know it would go so far? Who would have thought it would end in one’s own tears?
Wrong.
I’M the one getting a bit silly? Orly?
Ohhhh-kaaaay. *backs away slowly*
Good man.
Michael, perhaps you could enlighten me as to whether any of the Political Economy staff are at risk of the axe.
My info is second hand, but I believe Political Economy is also in the firing line (in both senses of the term). This isn’t karma – it’s managerialism laying waste to people’s careers without regard to whether their views are left or right, neoclassical or heterodox.
Given my explicit warning in the poist, I don’t appreciate at all the comments form Chris Warren and Freelander.
@Michael Harris
Perhaps so. Schadenfreude is not one of the more appealing of human behaviours, and IMO, we left|sts especially ought to be careful to avoid it. Unlike the right, we really do care what happens to humanity as a whole — including those parts of it who have acted unwisely or even anti-socially.
That said, we are also in part authored by the culture. There are few alive, I daresay, who didn’t start their conscious social life learning at the bended knee of someone uttering the world according to misanthropy. We have learned our shibboleths from those who despair and in their despair cling to the Daily Telegraph or The Bible. The narrative of good and evil, of metaphysical comeuppance and of much else that is unworthy whispers insistently in everyone’s ear. When people who have behaved badly suffer blowback, it is hard to suppress a moment of perverse satisfaction. the world we live in is an ugly place, and worse yet, there is no immediate prospect of it becoming a place where the horror is answered by the rational collaboration of those in its path. The misery of some spiv raised by his or her own misanthropic malfeasance offers a real, albeit momentary salve which can be put under the heading of “teachable moment” for those doing cognitive dissonance.
Is this ultimately a good thing? Of course not. It’s not rational politics. It can lead nowhere good. I know whom I hold responsible for it though, and why their complaints ring hollow.
@John Quiggin
Unfortunately you have to face reality. The same rationalism has been searing through the public service for decades, including CSIRO.
Education institutions (universities) are not being targeted – they are being included.
awaiting moderation?
Speaking of academics and ‘austerity’, sorry to hear about getting the sack from the Fin.
You tweeted “not surprising, but disappointing.”
Are you able to enlarge on “not surprising”?
There is a similar irony associated with those unfortunate souls who work in Australian call centres. The job is appalling in every respect, but those working there are paid, basically, to pester and abuse the public with unwanted calls or substandard service. Not that they have much say about that as they presumably have little choice ending up in a job like that. But what has happened in that sector? Progressively with the managerialist approach conditions have become worse and worse and large numbers have lost their jobs, with no recompense, as they have been outsourced to more efficient, which apparently simply means cheaper, operations overseas.
This reduction in working conditions has not been confined to call centres but has progressively been expanded to other occupations and to higher and higher paid jobs with all the gravy flowing upward to fewer and fewer at the top.
Of course, we are a lucky country. This process is far advanced in the worlds only ‘super-power’.
Sorry to hear that re: the Fin as well.
The main problem Fran is not leftist commentators “perverse satisfaction” in imagining that some economists are being hoist on their petards; rather its their manifest ignorance of what economists believe and why, their roles in shaping the policies in Australia over the years, and the effects of those policies and of the alternatives too them. The tendency to attack straw economic men, that has been evident among the Left in Australia at least since the time of Michael Pussey, continues today, quite immune from reality. I guess such behaviour may be of some value in a kind of group bonding or cathartic sense but, as I said above, those engaging in it just shouldn’t expect to be taken very seriously in more knowledgable circles.
I can only speak for myself, but I don’t consider the situation karma, and for the few that you could have little sympathy for, and amongst any great number there is always a few, that leaves the rest which is a large number indeed. Unfortunately, the whole process of bastardy has been going on now for sometime, and there have been many victims. Groups of victim seem to see themselves in isolation, and hence, provide little support for others when they meet a similar fate. By first picking off the easy targets, the so-called dole-bludgers, ‘illegal’ arrivals, ‘terrorists’ like David Hicks and Julian Assange, the erosion of decent treatment has allowed movement up the food chain. This is something that I certainly feel no Schadenfreude about.
It is not good for the current victims, and it is not good for us. Not to far down the track some of those currently administering the managerialism are likely to have it administered to them. There might be irony in that but certainly not Schadenfreude as that will just be further evidence of things getting worse.
Over the last forty plus years there has been a very successful push to demolish decent society by those who might claim there is no society, only individuals.
@Tom N.
But the bigger problem could be capitalist commentators who pretend others have some ignorance (?!) when it is their system which is collapsing and needs up to 100 trillion of debt (and continuous population growth) to survive. The GFC demonstrates clearly that it is capitalists who have been:
Only the ignorant cry ‘ignorant’.
There is no straw-man effect. This is all in your imagination.
Please do not try to impute your sins onto others.
If you propagate a theory that the market should determine employment, do not be distressed when the market says your employment should be elsewhere. If you want a special dispensation, then why not Commonwealth public servants who have weathered this nonsense for decades?
Your posing reeks of denialism.
Q.E.D.
@Tom N.
I was careful not to single out economists in the “academics behaving badly” category, though some have provided cover for the kinds of policies that are playing out now. I’m aware of the usages in the popular media, which entail selecting those most apposite to the perceived momentary needs of the ruling elite and allowing them to stand for all economists and political commentators more generally. They do this on climate science as well.
Nor did I even endorse Schadenfreude even for those who fit the description of behaving badly. I merely explained the impulse that many on the left feel without defending it. In a world in which inclusive governance was not a hollow slogan, I doubt that diversity of opinion within academia — even in the direction of irrational inequity, secular metaphysics and/or misanthropy — would widely elicit such responses.
@Fran Barlow
Yes, it is the economic theory that is “behaving badly”. Although it is possible to implicate those who go along for the ride. They can be singled-out as they self-identify themselves, just as a Windschuttle or an Irving do, in other fields.
Of course the ride must end one day – then they get upset.
Following on from the thread “Austerity and academia”
“A big question is this: Are the sackings due to productivity, or are they in response to an administration that has grossly over-spent on buildings? I have heard rumours of expenditure of 100m on a new medical centre, and 360m on a new obesity centre preceded these sackings.” (Prof Quiggin)
Maybe it is useful to first find out what the insiders say.
According to an open letter by the VC, Dr Spence, reproduced in the web-site below, the reduction in academic (and administrative) staff is necessitated by:
1. A short fall of student fee income from 2011, relative to planned (forward estimate) enrolments. This has flow-on affects for the financial target for 2012.
2. Overdue maintenance of old buildings
3. The need for new buildings (eg Physics and ICT)
4. Some funds from the government or foundations are tied
5. It is too expensive to carry people who do not pull their weight.
6. For minor items and ad-hoc hypotheses see the website
According to an open letter to the VC by a recent graduate from the Arts Faculty, also reproduced on the web-site,
• Academic staff is valued by students and should not be held responsible for the management’s forecasting error (ie item 1 above)
• The University spent huge amounts of money she can’t even imagine how much on the new Law School building, which she considers luxurious, wasteful of space and expensive to heat and cool (see her description). (For convenience, a web-site on the Sydney Law School is here: http://en.wikipedia.org/wiki/Sydney_Law_School)
• The University spent money on cobble stones which needed to be dug out and reset because they constituted a hindrance for handicapped access
• The University spent a lot of time and money on removing car parks
• The University removed and rebuilt and overhead bridge, which she considers even more ugly than the previous one.
http://theconversation.edu.au/sydney-uni-to-cut-academic-and-general-staff-but-boost-it-4404
What else can we find?
Re item 1: There is further internal information which points to item 1 being important http://sydney.edu.au/news/84.html?newscategoryid=3&newsstoryid=8687
Re item 2: This is not a new problem.
Re item 3: I suppose many people will be sympathetic with the plight of the physicists’ accommodation and IT is important for just about everybody at any university.
But: NO mention of the New Law Building and the cobble stones and the overhead bridge!
Re item 4: If, as the VC says, the surplus is not available for paying staff salaries, the question arises, have tied funds been optimally allocated in the past?
Re item 5: The VC does not make explicit the criteria for determining who is not pulling their weight.
Now it gets interesting. From the information available so far, it seems there are some academics whose effective teaching load (ie number of students taught, rather than number of hours) was ‘below par’ relative to the forward estimates made by management. So one would expect a reduction in casual teaching staff numbers. But no, the VC talks about academics who did not produce at least 3 or 4 pieces of academic work during the previous 3 years. Teaching is apparently not academic work.
Whatever conclusion people might draw, it seems to me the heading of this thread is very clever. (USA, Spain, Ireland, ….some years ago there was a excess supply of office space in the CBD……)