“The Governing boards”: a memorandum on the conduct of universities by business men


by Thorstein Veblen

In the working theory of the modern civilized community, — that is to say in the current common-sense apprehension of what is right and good, as it works out in the long run, — the university is a corporation of learning, disinterested and dispassionate. To its keeping is entrusted the community’s joint interest in esoteric knowledge. It is given over to the single-minded pursuit of science and scholarship, without afterthought and without a view to interests subsidiary or extraneous to the higher learning. It is, indeed, the one great institution of modern times that works to no ulterior end and is controlled by no consideration of expediency beyond its own work. Typically, normally, in point of popular theory, the university is moved by no consideration other than “the increase and diffusion of knowledge among men.” This is so because this profitless quest of knowledge has come to be the highest and ulterior aim of modern culture.

Such has been the case, increasingly, for some generations past; but it is not until quite recently that such a statement would hold true unequivocally and with an unqualified generality. That the case stands so today is due to the failure of theoretical interests of a different kind; directly and immediately it is due to the fact that in the immediate present the cult of knowledge has, by default, taken over that primacy among human interests which an eschatologically thrifty religious sentiment once held in the esteem of Christendom. So long as the fear of God still continued to move the generality of civilized men in sufficient measure, their theoretical knowledge was organized for “the glory of God and the good of man,” — the latter phrase being taken in the eschatological sense; and so long the resulting scheme of learning was laid out and cultivated with an eye to the main chance in a hereafter given over, in the main and for its major effect, to pains and penalties. With the latterday dissipation of this fear of God, the scheme of knowledge handed down out of a devout past and further amplified in the (theoretically) Godless present, has, by atrophy of disuse, lost its ulterior view to such spiritual expediency, and has come to stand over as an output of intellectual enterprise working under the impulsion and guidance of an idle curiosity simply. All this may not be much to the credit of civilized mankind, but dispassionate reflection will not leave the fact in doubt. And the outcome for the university, considered as an institution of this modern culture, is such as this conjuncture of circumstances will require.

But while such is the dispassionate working theory, the long-term drift of modern common sense as touches the work of the university, it is also a matter of course that this ideally single-minded course of action has never been realized in any concrete case. While it holds true, by and large, that modern Christendom has outlived the fear of God, — that is to say of “the Pope, the Turk, and the Devil,” — it does not therefore follow that men take a less instant interest in the affairs of life, or carry on the traffic of their lives with a less alert eye to the main chance, than they once did under the habitual shadow of that barbarian fear. The difference is, for the purpose in hand, that the same solicitous attention that once converged on such an avoidance of ulterior consequences now centres on questions of present ways and means. Worldly wisdom has not fallen into decay or abeyance, but it has become a wisdom of ways and means that lead to nothing beyond further ways and means. Expediency and practical considerations have come to mean considerations of a pecuniary kind; good, on the whole, for pecuniary purposes only; that is to say, gain and expenditure for the sake of further gain and expenditure, with nothing that will stand scrutiny as a final term to this traffic in ways and means, — except only this cult of the idle curiosity to which the seats of learning are, in theory, dedicate. But unremitting habituation to the competitive pursuit of ways and means has determined that “practical” interests of this complexion rule workday life in the modern community throughout, and they are therefore so intimately and ubiquitously bound up with current habits of thought, and have so strong and immediate a hold on current workday sentiment, that, hitherto, in no case have the seats of learning been able to pursue their quest of knowledge with anything like that single-mindedness which academic men are moved to profess in their moments of academic elation.


Some one vital interest of this practical sort, some variant of the quest of gain, is always at hand and strenuously effective in the community’s life, and therefore dominates their everyday habits of thought for the time being. This tone-giving dominance of such a workday interest may be transient or relatively enduring; it may be more or less urgently important and consequential under the circumstances in which the community is placed, or the clamour of its spokesmen and beneficiaries may be more or less ubiquitous and pertinacious; but in any case it will have its effect in the counsels of the “Educators,” and so it will infect the university as well as the lower levels of the educational system. So that, while the higher learning still remains as the enduring purpose and substantial interest of the university establishment, the dominant practical interests of the day will, transiently but effectually, govern the detail lines of academic policy, the range of instruction offered, and the character of the personnel; and more particularly and immediately will the character of the governing boards and the academic administration so be determined by the current run of popular sentiment touching the community’s practical needs and aims; since these ruling bodies stand, in one way or another, under the critical surveillance of a lay constituency.

The older American universities have grown out of underlying colleges, — undergraduate schools. Within the memory of men still living it was a nearly unbroken rule that the governing boards of these higher American schools were drawn largely from the clergy and were also guided mainly by ecclesiastical, or at least by devotional, notions of what was right and needful in matters of learning. This state of things reflected the ingrained devoutness of that portion of the American community to which the higher schools then were of much significance. At the same time it reflected the historical fact that the colleges of the early days had been established primarily as training schools for ministers of the church. In their later growth, in the recent past, while the chief purpose of these seminaries has no longer been religious, yet ecclesiastical prepossessions long continued to mark the permissible limits of the learning which they cultivated, and continued also to guard the curriculum and discipline of the schools.

That phase of academic policy is past. Due regard at least is, of course, still had to the religious proprieties — the American community, by and large, is still the most devout of civilized countries — but such regard on the part of the academic authorities now proceeds on grounds of businesslike expediency rather than on religious conviction or on an ecclesiastical or priestly bias in the ruling bodies. It is a concessive precaution on the part of a worldly-wise directorate, in view of the devout prejudices of those who know no better.

The rule of the clergy belongs virtually to the prehistory of the American universities. While that rule held there were few if any schools that should properly be rated as of university grade. Even now, it is true, much of the secondary school system, including the greater part, though a diminishing number, of the smaller colleges, is under the tutelage of the clergy; and the academic heads o£ these schools are almost universally men of ecclesiastical standing and bias rather than of scholarly attainments. But that fact does not call for particular notice here, since these schools lie outside the university field, and so outside the scope of this inquiry.

For a generation past, while the American universities have been coming into line as seminaries of the higher learning, there has gone on a wide-reaching substitution of laymen in the place of clergymen on the governing boards. This progressive secularization is sufficiently notorious, even though there are some among the older establishments the terms of whose charters require a large proportion of clergymen on their boards. This secularization is entirely consonant with the prevailing drift of sentiment in the community at large, as is shown by the uniform and uncritical approval with which it is regarded. The substitution is a substitution of businessmen and politicians; which amounts to saying that it is a substitution of businessmen. So that the discretionary control in matters of university policy now rests finally in the hands of businessmen.


The reason which men prefer to allege for this state of things is the sensible need of experienced men of affairs to take care of the fiscal concerns of these university corporations; for the typical modern university is a corporation possessed of large property and disposing of large aggregate expenditures, so that it will necessarily have many and often delicate pecuniary interests to be looked after. It is at the same time held to be expedient in case of emergency to have several wealthy men identified with the governing board, and such men of wealth are also commonly businessmen. It is apparently believed, though on just what ground this sanguine belief rests does not appear, that in case of emergency the wealthy members of the boards may be counted on to spend their substance in behalf of the university. In point of fact, at any rate, poor men and men without large experience in business affairs are felt to have no place in these bodies. If by any chance such men, without the due pecuniary qualifications, should come to make up a majority, or even an appreciable minority of such a governing board, the situation would be viewed with some apprehension by all persons interested in the case and cognizant of the facts. The only exception might be cases where, by tradition, the board habitually includes a considerable proportion of clergymen: “Such great regard is always lent By men to ancient precedent.”

The reasons alleged are no doubt convincing to those who are ready to be so convinced, but they are after all more plausible at first sight than on reflection. In point of fact these businesslike governing boards commonly exercise little if any current surveillance of the corporate affairs of the university, beyond a directive oversight of the distribution of expenditures among the several academic purposes for which the corporate income is to be used; that is to say, they control the budget of expenditures; which comes to saying that they exercise a pecuniary discretion in the case mainly in the way of deciding what the body of academic men that constitutes the university may or may not do with the means in hand; that is to say, their pecuniary surveillance comes in the main to an interference with the academic work, the merits of which these men of affairs on the governing board are in no special degree qualified to judge. Beyond this, as touches the actual running administration of the corporation’s investments, income and expenditures, — all that is taken care of by permanent officials who have, as they necessarily must, sole and responsible charge of those matters. Even the auditing of the corporation’s accounts is commonly vested in such officers of the corporation, who have none but a formal, if any, direct connection with the governing board. The governing board, or more commonly a committee of the board, on the other hand, will then formally review the balance sheets and bundles of vouchers duly submitted by the corporation’s fiscal officers and their clerical force, — with such effect of complaisant oversight as will best be appreciated by any person who has bad the fortune to look into the accounts of a large corporation.

So far as regards its pecuniary affairs and their due administration, the typical modern university is in a position, without loss or detriment, to dispense with the services of any board of trustees, regents, curators, or what not. Except for the insuperable difficulty of getting a hearing for such an extraordinary proposal, it should be no difficult matter to show that these governing boards of businessmen commonly are quite useless to the university for any businesslike purpose. Indeed, except for a stubborn prejudice to the contrary, the fact should readily be seen that the boards are of no material use in any connection; their sole effectual function being to interfere with the academic management in matters that are not of the nature of business, and that lie outside their competence and outside the range of their habitual interest.

The governing boards — trustees, regents, curators, fellows, whatever their style and title — are an aimless survival from the days of clerical rule, when they were presumably of some effect in enforcing conformity to orthodox opinions and observances, among the academic staff. At that time, when means for maintenance of the denominational colleges commonly had to be procured by an appeal to impecunious congregations, it fell to these bodies of churchmen to do service as sturdy beggars for funds with which to meet current expenses. So that as long as the boards were made up chiefly of clergymen they served a pecuniary purpose; whereas, since their complexion has been changed by the substitution of businessmen in the place of ecclesiastics, they have ceased to exercise any function other than a bootless meddling with academic matters which they do not understand. The sole ground of their retention appears to be an unreflecting deferential concession to the usages of corporate organization and control, such as have been found advantageous for the pursuit of private gain by businessmen banded together in the exploitation of joint-stock companies with limited liability.[1]


The fact remains, the modern civilized community is reluctant to trust its serious interests to others than men of pecuniary substance, who have proved their fitness for the direction of academic affairs by acquiring, or by otherwise being possessed of, considerable wealth.[2] It is not simply that experienced businessmen are, on mature reflection, judged to be the safest and most competent trustees of the university’s fiscal interests. The preference appears to be almost wholly impulsive, and a matter of habitual bias. It is due for the greater part to the high esteem currently accorded to men of wealth at large, and especially to wealthy men who have succeeded in business, quite apart from any special capacity shown by such success for the guardianship of any institution of learning. Business success is by common consent, and quite uncritically, taken to be conclusive evidence of wisdom even in matters that have no relation to business affairs. So that it stands as a matter of course that businessmen must be preferred for the guardianship and control of that intellectual enterprise for the pursuit of which the university is established, as well as to take care of the pecuniary welfare of the university corporation. And, full of the same naive faith that business success “answereth all things,” these businessmen into whose hands this trust falls are content to accept the responsibility and confident to exercise full discretion in these matters with which they have no special familiarity. Such is the outcome, to the present date, of the recent and current secularization of the governing boards. The final discretion in the affairs of the seats of learning is entrusted to men who have proved their capacity for work that has nothing in common with the higher learning.[3]

As bearing on the case of the American universities, it should be called to mind that the businessmen of this country, as a class, are of a notably conservative habit of mind. In a degree scarcely equalled in any community that can lay claim to a modicum of intelligence and enterprise, the spirit of American business is a spirit of quietism, caution, compromise, collusion, and chicane. It is not that the spirit of enterprise or of unrest is wanting in this community, but only that, by selective effect of the conditioning circumstances, persons affected with that spirit are excluded from the management of business, and so do not come into the class of successful businessmen from which the governing boards are drawn. American inventors are bold and resourceful, perhaps beyond the common run of their class elsewhere, but it has become a commonplace that American inventors habitually die poor; and one does not find them represented on the boards in question. American engineers and technologists are as good and efficient as their kind in other countries. but they do not as a class accumulate wealth enough to entitle them to sit on the directive board of any self-respecting university, nor can they claim even a moderate rank as “safe and sane” men of business. American explorers, prospectors and pioneers can not be said to fall short of the common measure in hardihood, insight, temerity or tenacity; but wealth does not accumulate in their hands, and it is a common saying, of them as of the inventors, that they are not fit to conduct their own (pecuniary) affairs; and the reminder is scarcely needed that neither they nor their qualities are drawn into the counsels of these governing boards. The wealth and the serviceable results that come of the endeavours of these enterprising and temerarious Americans habitually inure to the benefit of such of their compatriots as are endowed with a “safe and sane” spirit of “watchful waiting,” — of caution, collusion and chicane. There is a homely but well-accepted American colloquialism which says that “The silent hog eats the swill.”

As elsewhere, but in a higher degree and a more cogent sense than elsewhere, success in business affairs, in such measure as to command the requisite deference, comes only by getting something for nothing. And, baring — accidents and within the law, it is only the waiting game and the defensive tactics that will bring gains of that kind, unless it be strategy of the nature of finesse and chicane. Now it happens that American conditions during the past one hundred years have been peculiarly favourable to the patient and circumspect man who will rather wait than work; and it is also during these hundred years that the current traditions and standards of business conduct and of businesslike talent have taken shape and been incorporated in the community’s common sense. America has been a land of free and abounding resources; which is to say, when converted into terms of economic theory, that it is the land of the unearned increment. In all directions, wherever enterprise and industry have gone, the opportunity was wide and large for such as had the patience or astuteness to place themselves in the way of this multifarious flow of the unearned increment, and were endowed with the retentive grasp. Putting aside the illusions of public spirit and diligent serviceability, sedulously cultivated by the apologists of business, it will readily be seen that the great mass of reputably large fortunes in this country are of such an origin; nor will it cost anything beyond a similar lesion to the affections to confirm the view that such is the origin and line of derivation of the American propertied business community and its canons of right and honest living.


It is a common saying that the modern taste has been unduly commercialized by the unremitting attention necessarily given to matters of price and of profit and loss in an industrial community organized on business principles; that pecuniary standards of excellence are habitually accepted and applied with undue freedom and finality. But what is scarcely appreciated at its full value is the fact that these pecuniary standards of merit and efficiency are habitually applied to men as well as to things, and with little less freedom and finality. The man who applies himself undeviatingly to pecuniary affairs with a view to his own gain, and who is habitually and cautiously alert to the main chance, is not only esteemed for and in respect of his pecuniary success, but he is also habitually rated high at large, as a particularly wise and sane person. He is deferred to as being wise and sane not only in pecuniary matters but also in any other matters on which he may express an opinion.

A very few generations ago, before the present pecuniary era of civilization had made such headway, and before the common man in these civilized communities had lost the fear of God, the like wide-sweeping and obsequious veneration and deference was given to the clergy and their opinions; for the churchmen were then, in the popular apprehension, proficient in all those matters that were of most substantial interest to the common man of that time. Indeed, the salvation of men’s souls was then a matter of as grave and untiring solicitude as their commercial solvency has now become. And the trained efficiency of the successful clergyman of that time for the conduct of spiritual and ecclesiastical affairs lent him a prestige with his fellow men such as to give his opinions, decisions and preconceptions great and unquestioned weight in temporal matters as well; he was then accepted as the type of wise, sane and benevolent humanity, in his own esteem as well as in the esteem of his fellows. In like manner also, in other times and under other cultural conditions the fighting-man has held the first place in men’s esteem and has been deferred to in matters that concerned his trade and in matters that did not.

Now, in that hard and fast body of aphoristic wisdom that commands the faith of the business community there is comprised the conviction that learning is of no use in business. This conviction is, further, backed up and coloured with the tenet, held somewhat doubtfully, but also, and therefore, somewhat doggedly, by the common run of businessmen, that what is of no use in business is not worth while. More than one of the greater businessmen have spoken, advisedly and with emphasis, to the effect that the higher learning is rather a hindrance than a help to any aspirant for business success;[4] more particularly to any man whose lot is cast in the field of business enterprise of a middling scale and commonplace circumstances. And notoriously, the like view of the matter prevails throughout the business community at large. What these men are likely to have in mind in passing this verdict, as shown by various expressions on this head, is not so much the higher learning in the proper sense, but rather that slight preliminary modicum that is to be found embodied in the curriculum of the colleges, — for the common run of businessmen are not sufficiently conversant with these matters to know the difference, or that there is a difference, between the college and the university. They are busy with other things.

It is true, men whose construction of the facts is coloured by their wish to commend the schools to the good will of the business community profess to find ground for the belief that university training, or rather the training of the undergraduate school, gives added fitness for a business career, particularly for the larger business enterprise. But they commonly speak apologetically and offer extenuating considerations, such as virtually to concede the case, at the same time that they are very prone to evade the issue by dwelling on accessory and subsidiary considerations that do not substantially touch the question of trained capacity for the conduct of business affairs.[5] The apologists commonly shift from the undebatable ground of the higher learning as related to business success, to the more defensible ground of the undergraduate curriculum, considered as introductory to those social amenities that devolve on the successful man of business; and in so far as they confine themselves to the topic of education and business they commonly spend their efforts in arguing for the business utility of the training afforded by the professional and technical schools, included within the university corporation or otherwise. There is ground for their contention in so far as “university training” is (by subreption) taken to mean training in those “practical” branches of knowledge (Law, Politics, Accountancy, etc.) that have a place within the university precincts only by force of a non-sequitur. And the spokesmen for these views are commonly also, and significantly, eager to make good their contention by advocating the introduction of an increased proportion of these “practical” subjects into the schedule of instruction.


The facts are notorious and leave little room for cavil on the merits of the case. Particularly is the award of the facts unequivocal in America, — the native ground of the self-made businessman, and at the same time the most admirably thorough-paced business community extant. The American business community is well enough as it is, without the higher learning, and it is fully sensible that the higher learning is not a business proposition.

But a good rule works both ways. If scholarly and scientific training, such as may without shame be included under the caption of the higher learning, unfits men for business efficiency, then the training that comes of experience in business must also be held to unfit men for scholarly and scientific pursuits, and even more pronouncedly for the surveillance of such pursuits. The circumstantial evidence for the latter proposition is neither less abundant nor less unequivocal than for the former. If the higher learning is incompatible with business shrewdness, business enterprise is, by the same token, incompatible with the spirit of the higher learning. Indeed, within the ordinary range of lawful occupations these two lines of endeavour, and the animus that belongs to each, are as widely out of touch as may be. They are the two extreme terms of the modern cultural scheme; although at the same time each is intrinsic and indispensable to the scheme of modern civilization as it runs. With the excision or serious crippling of either, Western Civilization would suffer a dislocation amounting to a revolutionary change.

On the other hand, the higher learning and the spirit of scientific inquiry have much in common with modern industry and its technological discipline. More particularly is there a close bond of sympathy and relationship between the spirit of scientific inquiry and the habit of mind enforced by the mechanical industries of the modern kind. In both of these lines of activity men are occupied with impersonal facts and deal with them in a matter-of-fact way. In both, as far as may be, the personal equation is sought to be eliminated, discounted and avoided, so as to leave no chance for discrepancies due to personal infirmity or predilection. But it is only on its mechanical side that the industrial organization so comes in touch with modern science and the pursuit of matter-of-fact knowledge; and it is only in so far as their habits of thought are shaped by the discipline of the mechanical industries that there is induced in the industrial population the same bent as goes to further or to appreciate the work of modern science. But it would be quite nugatory to suggest that the governing boards of the universities should be made up of, or should comprise, impecunious technologists and engineers.


There is no similar bond of consanguinity between the business occupations and the scientific spirit; except so far as regards those clerical and subaltern employments that lie wholly within the mechanical routine of business traffic; and even as regards these employments and the persons so occupied it is, at the most, doubtful whether their training does not after all partake more of that astute and invidious character of cunning that belongs to the conduct of business affairs than of the dispassionate animus of scientific inquiry.

These extenuating considerations do not touch the case of that body of businessmen, in the proper sense of the term, from which the membership of the governing boards is drawn. The principles that rule business enterprise of that larger and pecuniarily effectual sort are a matter of usage, appraisement, contractual arrangement and strategic manoeuvres. They are the principles of a game of competitive guessing and pecuniary coercion, a game carried on wholly within the limits of the personal equation, and depending for its movement and effect on personal discrepancies of judgment. Science has to do with the opaquely veracious sequence of cause and effect, and it deals with the facts of this sequence without mental reservation or ulterior purposes of expediency. Business enterprise proceeds on ulterior purposes and calculations of expediency; it depends on shrewd expedients and lives on the margin of error, on the fluctuating margin of human miscalculation. The training given by these two lines of endeavour — science and business — is wholly divergent; with the notorious result that for the purposes of business enterprise the scientists are the most ignorant, gullible and incompetent class in the community. They are not only passively out of touch with the business spirit, out of training by neglect, but they are also positively trained out of the habit of mind indispensable to business enterprise. The converse is true of the men of business affairs.[6]


Plato’s classic scheme of folly, which would have the philosophers take over the management of affairs, has been turned on its head; the men of affairs have taken over the direction of the pursuit of knowledge. To any one who will take a dispassionate look at this modern arrangement it looks foolish, of course, — ingeniously foolish; but, also, of course, there is no help for it and no prospect of its abatement in the calculable future.

It is a fact of the current state of things, grounded in the institutional fabric of Christendom; and it will avail little to speculate on remedial corrections for this state of academic affairs so long as the institutional ground of this perversion remains intact. Its institutional ground is the current system of private ownership. It claims the attention of students as a feature of the latterday cultural growth, as an outcome of the pecuniary organization of modern society, and it is to be taken as a base-line in any inquiry into the policy that controls modern academic life and work — just as any inquiry into the circumstances and establishments of learning in the days of scholasticism must take account of the ecclesiastical rule of that time as one of the main controlling facts in the case. The fact is that businessmen hold the plenary discretion, and that business principles guide them in their management of the affairs of the higher learning; and such must continue to be the case so long as the community’s workday material interests continue to be organized on a basis of business enterprise. All this does not promise well for the future of science and scholarship in the universities, but the current effects of this method of university control are sufficiently patent to all academic men, — and the whole situation should perhaps trouble the mind of no one who will be at pains to free himself from the (possibly transient) preconception that “the increase and diffusion of knowledge among men” is, in the end, more to be desired than the acquisition and expenditure of riches by the astuter men in the community.

Many of those who fancy themselves conversant with the circumstances of American academic life would question the view set forth above, and they would particularly deny that business principles do or can pervade the corporate management of the universities in anything like the degree here implied. They would contend that while the boards of control are commonly gifted with all the disabilities described — that much being not open to dispute — yet these boards do not, on the whole, in practice, extend the exercise of their plenary discretion to the directive control of what are properly speaking academic matters; that they habitually confine their work of directorship to the pecuniary affairs of the corporation; and that in so far as they may at times interfere in the university’s scholarly and scientific work, they do so in their capacity as men of culture, not as men of property or of enterprise. This latter would also be the view to which the men of property on the boards would themselves particularly incline. So it will be held by the spokesmen of content that virtually full discretion in all matters of academic policy is delegated to the academic head of the university, fortified by the advice and consent of the senior members of his faculty; by the free choice of the governing boards, in practice drawn out from under the control of these businessmen in question and placed in the hands of the scholars. And such, commonly, is at least ostensibly the case, in point of form; more particularly as regards those older establishments that are burdened with academic traditions running back beyond the date when their governing boards were taken over by the businessmen, and more particularly in the recent past than in the immediate present or for the establishments of a more recent date.


This complaisant view overlooks the fact that much effective surveillance of the academic work is exercised through the board’s control of the budget. The academic staff can do little else than what the specifications of the budget provide for; without the means with which the corporate income should supply them they are as helpless as might be expected.

Imbued with an alert sense of those tangible pecuniary values which they are by habit and temperament in a position to appreciate, a sagacious governing board may, for instance, determine to expend the greater proportion of the available income of the university in improving and decorating its real estate, and they may with businesslike thrift set aside an appreciable proportion of the remainder for a sinking fund to meet vaguely unforeseen contingencies, while the academic staff remains (notoriously) underpaid and so scantily filled as seriously to curtail their working capacity. Or the board may, again, as has also happened, take a thrifty resolution to “concede” only a fraction — say ten or fifteen per-cent — of the demands of the staff for books and similar working materials for current use; while setting aside a good share of the funds assigned for such use, to accumulate until at some future date such materials may be purchased at more reasonable prices than those now ruling. These illustrations are not supplied by fancy. There is, indeed, a visible reluctance on the part of these businesslike boards to expend the corporation’s income for those intangible, immaterial uses for which the university is established. These uses leave no physical, tangible residue, in the way of durable goods, such as will justify the expenditure in terms of vendible property acquired; therefore they are prima facie imbecile, and correspondingly distasteful, to men whose habitual occupation is with the acquisition of property. By force of the same businesslike bias the boards unavoidably incline to apportion the funds assigned for current expenses in such a way as to favour those “practical” or quasi-practical lines of instruction and academic propaganda that are presumed to heighten the business acumen of the students or to yield immediate returns in the way of a creditable publicity.

As to the delegation of powers to the academic head. There is always the reservation to be kept in mind, that the academic head is limited in his discretion by the specifications of the budget. The permissible deviations in that respect are commonly neither wide nor of a substantial character; though the instances of a university president exercising large powers are also not extremely rare. But in common practice, it is to be noted, the academic head is vested with somewhat autocratic powers, within the lines effectually laid down in the budget; he is in effect responsible to the governing board alone, and his responsibility in that direction chiefly touches his observance of the pecuniary specifications of the budget.


But it is more to the point to note that the academic head commonly holds office by choice of the governing board. Where the power of appointment lies freely in the discretion of such a board, the board will create an academic head in its own image. In point of notorious fact, the academic head of the university is selected chiefly on grounds of his business qualifications, taking that expression in a somewhat special sense. There is at present an increasingly broad and strenuous insistence on such qualifications in the men selected as heads of the universities; and the common sense of the community at large bears out the predilections of the businesslike board of control in this respect. The new incumbents are selected primarily with a view to give the direction of academic policy and administration more of a businesslike character. The choice may not always fall on a competent businessman, but that is not due to its inclining too far to the side of scholarship. It is not an easy matter even for the most astute body of businessmen to select a candidate who shall measure up to their standard of businesslike efficiency in a field of activity that has substantially nothing in common with that business traffic in which their preconceptions of efficiency have been formed.

In many cases the alumni have much to say in the choice of a new academic head, whether by courtesy or by express provision; and the results under these circumstances are not substantially different. It follows as an inevitable consequence of the current state of popular sentiment that the successful businessmen among the alumni will have the deciding voice, in so far as the matter rests with the alumni; for the successful men of affairs assert themselves with easy confidence, and they are looked up to, in any community whose standards of esteem are business standards, so that their word carries weight beyond that of any other class or order of men. The community at large, or at least that portion of the community that habitually makes itself heard, speaks to the same effect and on the same ground, — viz., a sentimental conviction that pecuniary success is the final test of manhood. Business principles are the sacred articles of the secular creed, and business methods make up the ritual of the secular cult.


The one clear note of acclaim that goes up, from the avowed adepts of culture and from those without the pale, when a new head has, as recently been called to one of the greater universities, is in commendation of his business capacity, “commercial sense,” executive ability, financiering tact; and the effectual canvass of his qualifications does not commonly range much outside of these prime requisites. The modicum of scholarship and scholarly ideals and insight concessively deemed indispensable in such a case is somewhat of the nature of a perquisite, and is easily found. It is not required that the incumbent meet the prepossessions of the contingent of learned men in the community in this respect; the choice does not rest with that element, nor does its ratification, but rather at the other end of the scale, with that extreme wing of the laity that is taken up with “practical,” that is to say pecuniary, affairs.

As to the requirements of scholarly or scientific competency, a plausible speaker with a large gift of assurance, a businesslike “educator” or clergyman, some urbane pillar of society, some astute veteran of the scientific demi-monde, will meet all reasonable requirements. Scholarship is not barred, of course, though it is commonly the quasi-scholarship of the popular raconteur that comes in evidence in these premises; and the fact that these incumbents of executive office show so much of scholarly animus and attainments as they do is in great measure a fortuitous circumstance. It is, indeed, a safe generalization that in point of fact the average of university presidents fall short of the average of their academic staff in scholarly or scientific attainments, even when all persons employed as instructors are counted as members of the staff. It may also be remarked by the way that when, as may happen, a scholar or scientist takes office as directive head of a university, he is commonly lost to the republic of learning; he has in effect passed from the ranks of learning to those of business enterprise.

The upshot of it all should be that when and in so far as a businesslike governing board delegates powers to the university’s academic head, it delegates these powers to one of their own kind, who is somewhat peremptorily expected to live up to the aspirations that animate the board. What such a man, so placed, will do with the powers and opportunities that so devolve on him is a difficult question that can be answered only in terms of the compulsion of the circumstances in which he is placed and of the moral wear and tear that comes of arbitrary powers exercised in a tangle of ambiguities.[7]

[Note: This piece is the second chapter of Veblen’s The Higher Learning in America, 1918.]


[Credit: educationviews.org.]

End notes:

[1] An instance showing something of the measure and incidence of fiscal service rendered by such a businesslike board may be suggestive, even though it is scarcely to be taken as faithfully illustrating current practice, in that the particular board in question has exercised an uncommon measure of surveillance over its university’s pecuniary concerns.

A university corporation endowed with a large estate (appraised at something over $30,000,000) has been governed by a board of the usual form, with plenary discretion, established on a basis of co-optation. In point of practical effect, the board, or rather that fraction of the board which takes an active interest in the university’s affairs, has been made up of a group of local business men engaged in divers enterprises of the kind familiar to men of relatively large means, with somewhat extensive interests of the nature of banking and underwriting, where large extensions of credit and the temporary use of large funds are of substantial consequence. By terms of the corporate charter the board was required to render to the governor of the state a yearly report of all the pecuniary affairs of the university; but no penalty was attached to their eventual failure to render such report, though some legal remedy could doubtless have been had on due application by the parties in interest, as e. g., by the academic head of the university. No such report has been rendered, however, and no steps appear to have been taken to procure such a report, or any equivalent accounting. But on persistent urging from the side of his faculty, and after some courteous delay, the academic head pushed an inquiry into the corporation’s finances so far as to bring out facts somewhat to the following effect: —

The board, or the group of local business men who constituted the habitual working majority of the board, appear to have kept a fairly close and active oversight of the corporate funds entrusted to them, and to have seen to their investment and disposal somewhat in detail — and, it has been suggested, somewhat to their own pecuniary advantage. With the result that the investments were found to yield a current income of some three per cent. (rather under than over), — in a state where investment on good security in the open market commonly yielded from six per cent to eight per cent. Of this income approximately one-half (apparently some forty-five per cent) practically accrued to the possible current use of the university establishment. Just what disposal was made of the remainder is not altogether clear; though it is loosely presumed to have been kept in hand with an eventual view to the erection and repair of buildings. Something like one-half of what so made up the currently disposable income was further set aside in the character of a sinking fund, to accumulate for future use and to meet contingencies; so that what effectually accrued to the university establishment for current use to meet necessary academic expenditures would amount to something like one per cent (or less) on the total investment. But of this finally disposable fraction of the income, again, an appreciable sum was set aside as a special sinking fund to accumulate for the eventual use of the university library, — which, it may be remarked, was in the meantime seriously handicapped for want of funds with which to provide for current needs. So also the academic establishment at large was perforce managed on a basis of penurious economy, to the present inefficiency and the lasting damage of the university.

The figures and percentages given above are not claimed to be exact; it is known that a more accurate specification of details would result in a less favourable showing. At the time when these matters were disclosed (to a small number of the uneasy persons interested) there was an ugly suggestion afloat touching the pecuniary integrity of the board’s management, but this is doubtless to be dismissed as being merely a loose expression of ill-will; and the like is also doubtless to be said as regards the suggestion that there may have been an interested collusion between the academic head and the active members of the board. These were “all honourable men,” of great repute in the community and well known as sagacious and successful men in their private business ventures.


[2] Cf. The Instinct of Workmanship, ch. vii, pp. 343-352.

[3] A subsidiary reason of some weight should not be overlooked in seeking the cause of this secularization of the boards, and of the peculiar colour which the secularization has given them. In any community where wealth and business enterprise are held in such high esteem, men of wealth and of affairs are not only deferred to, but their countenance is sought from one motive and another. At the same time election to one of these boards has come to have a high value as an honourable distinction. Such election or appointment therefore is often sought from motives of vanity, and it is at the same time a convenient means of conciliating the good will of the wealthy incumbent.

It may be added that now and again the discretionary control of large funds which so falls to the members of the board may come to be pecuniarily profitable to them, so that the office may come to be attractive as a business proposition as well as in point of prestige. Instances of the kind are not wholly unknown, though presumably exceptional.

[4] Cf., e. g.. R. T. Crane. The Futility of All Kinds of Higher Schooling, especially part I, ch. iv.

[5] Cf. R.T. Crane, as above, especially part I, ch. ii. iii, and vi. Cf. also H.P. Judson, The Higher Education as a Training for Business, where the case is argued in a typically commonplace and matter-of-fact spirit, but where “The Higher Education” is taken to mean the undergraduate curriculum simply; also “A Symposium on the value of humanistic, particularly classical, studies as a training for men of affairs,” Proceedings of the Classical Conference at Ann Arbor, Michigan, April 3, 1909.

[6] Cf. Bacon, Essays — “Of Cunning”, and “Of Wisdom for a Man’s Self.”

[7] Cf. ch. viii, especially pp. 242-269.


The writer was an American economist and sociologist whose critique of production for profit, and the emphasis on the wasteful role of consumption for status remains influential.