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N the fall of 1964 a twenty-one-year-old Berkeley undergraduate named Mario Savio climbed the steps of Sproul Hall and denounced his university for bending over backwards to "serve the need of American industry." Savio, the leader of the Berkeley Free Speech Movement, accused the university of functioning as "a factory that turns out a certain product needed by industry" rather than serving as the conscience and a critic of society. To the modern ear this sixties rhetoric may sound outdated. To many people in the academic world, however, Savio's words ring truer today than ever. Although our national conversation about higher education remains focused on issues of diversity and affirmative action, nothing provoked more debate on many college campuses last year than the growing ties between universities and business -- and nowhere was the debate livelier than at Berkeley.

"Is Berkeley Off Course?", Robert Berring (February, 1999)
"A Boalt Hall professor worries about the privatization of the University."
An article from California Monthly.

The focus of the survey was a controversial agreement that Berkeley had signed in November of 1998 with Novartis, a Swiss pharmaceutical giant and producer of genetically engineered crops. Under the terms of the agreement Novartis will give Berkeley $25 million to fund basic research in the Department of Plant and Microbial Biology, one of four departments within the CNR.

In exchange for the $25 million, Berkeley grants Novartis first right to negotiate licenses on roughly a third of the department's discoveries -- including the results of research funded by state and federal sources as well as by Novartis. It also grants the company unprecedented representation -- two of five seats -- on the department's research committee, which determines how the money is spent.

That the university had the backing of a private company was hardly unusual. That a single corporation would be providing one third of the research budget of an entire department at a public university had sparked an uproar. Shortly after the agreement was signed, a newly formed graduate-student group, Students for Responsible Research, circulated a petition blasting the Novartis deal for standing "in direct conflict with our mission as a public university." The Daily Californian, Berkeley's student newspaper, published a five-part series on the growing privatization of the university, and a coalition of public-interest groups sent a letter to Berkeley's chancellor, Robert Berdahl, charging that the alliance "would disqualify a leading intellectual center from the ranks of institutions able to provide the kind of research -- free from vested interest" that is the hallmark of academic life. Meanwhile, the College of Natural Resources, headed by Dean Gordon Rausser, sent a message to all professors urging them not to speak to the press and to direct any questions to the university's public-relations office. Many viewed this as a hush order.

"We are here to discuss the position of the faculty," Ignacio Chapela, a professor of microbial ecology, announced as the April 13 meeting began. Chapela, who was then the chairman of the college's executive committee, a faculty governing body, snapped on an overhead projector to display the results of the survey, and declared that the Novartis deal had left the CNR "deeply divided." While 41 percent of the faculty respondents supported the Novartis agreement as signed, more than 50 percent believed that it would have a "negative" or "strongly negative" effect on academic freedom. Roughly half believed that the agreement would erode Berkeley's commitment to "public good research," and 60 percent feared that it would impede the free exchange of ideas among scientists within the college -- one of Chapela's chief concerns.

"When I came to Berkeley," Chapela explained to us after the meeting, "the people who brought me here and who were my closest colleagues were largely in the Department of Plant and Microbial Biology. Now I know that anything I say to these people can be turned around and handed over to Novartis. So I just can't talk to them anymore. If I have a good idea, I'm not going to just give it away." Chapela, like many critics of the deal, is hardly a confirmed opponent of university-industry relations. Before coming to Berkeley, he told us, he spent three years in Switzerland working for none other than Novartis -- then named Sandoz -- and he continues to have a relationship with the company. "I'm not opposed to individual professors' serving as consultants to industry," he said. "If something goes wrong, it's their reputation that's at stake. But this is different. This deal institutionalizes the university's relationship with one company, whose interest is profit. Our role should be to serve the public good."

ORDON Rausser, the chief architect of the Novartis deal, believes that faculty concerns about the alliance reflect ignorance about both the Novartis deal and the changing economic realities of higher education. When we met with Rausser last year, in his spacious office in the ornate neoclassical Giannini Hall, he insisted that the deal, far from violating Berkeley's public mission, would help to perpetuate the university's status as a top-flight research institution. An economist who served on the President's Council of Economic Advisors in the 1980s and now operates a sideline consulting business, Rausser contends that Berkeley's value is "enhanced, not diminished, when we work creatively in collaboration with other institutions, including private companies." In a recent article in the Berkeley alumni magazine Rausser argues, "Without modern laboratory facilities and access to commercially developed proprietary databases ... we can neither provide first-rate graduate education nor perform the fundamental research that is part of the University's mission."

Rausser's view is more and more the norm, as academic administrators throughout the country turn to the private sector for an increasing percentage of their research dollars, in part because public support for education has been dropping. Although the federal government still supplies most of the funding for academic research (it provided $14.3 billion, or 60 percent, in 1997, the latest year for which figures are available), the rate of growth in federal support has fallen steadily over the past twelve years, as the cost of doing research, particularly in the cutting-edge fields of computer engineering and molecular biology, has risen sharply. State spending has also declined. Berkeley Chancellor Robert Berdahl says that California now supplies just 34 percent of Berkeley's overall budget, as compared with 50 percent twelve years ago, and he claims that other state universities have suffered similar cuts.

Meanwhile, corporate giving is on the rise, growing from $850 million in 1985 to $4.25 billion less than a decade later -- and increasingly the money comes with strings attached. One marked trend is a boom in industry-endowed chairs. Kmart has endowed a chair in the management school at West Virginia University which requires its holder to spend up to thirty days a year training assistant store managers. Freeport McMoRan, a mining company embroiled in allegations of environmental misconduct in Indonesia, has created a chair in environmental studies at Tulane. In its series on privatization at Berkeley, The Daily Californian noted that buildings throughout the Haas School of Business were "plastered with corporate logos." One major contributor to the school is Don Fisher, the owner of The Gap, whose company also happens to be featured as a case study in an introductory business-administration course. Laura D'Andrea Tyson, formerly one of President Clinton's top economic advisers, is now officially known as the BankAmerica Dean of Haas.

In rushing to forge alliances with industry, universities are not just responding to economic necessity -- they are also capitalizing on a change in federal law, implemented nearly two decades ago, that laid the foundation for today's academic-industrial complex. In 1980 concerns about declining U.S. productivity and rising competition from Japan propelled Congress to pass the Bayh-Dole Act, which for the first time allowed universities to patent the results of federally funded research. The goal of the legislation was to bring ideas out of the ivory tower and into the marketplace, by offering universities the opportunity to license campus-based inventions to U.S. companies, earning royalties in return. Both the government and the business world saw universities not merely as centers of learning and basic research but as sources of commercially valuable ideas, which is why the Business-Higher Education Forum, a coalition of corporate and academic leaders, and similar groups lobbied to tear down the walls separating universities from the marketplace. In the years since, Congress has passed numerous other laws to bolster university-industry ties, including generous tax breaks for corporations willing to invest in academic research.

The Bayh-Dole Act was from the beginning controversial. Some in Congress argued that granting private companies the rights to publicly funded research amounted to an enormous giveaway to corporations; others pronounced the act a visionary example of industrial policy that would help America compete in the fast-moving information age. What is undeniable is that Bayh-Dole has revolutionized university-industry relations. From 1980 to 1998 industry funding for academic research expanded at an annual rate of 8.1 percent, reaching $1.9 billion in 1997 -- nearly eight times the level of twenty years ago. Before Bayh-Dole, universities produced roughly 250 patents a year (many of which were never commercialized); in fiscal year 1998, however, universities generated more than 4,800 patent applications. University-industry collaborations, Rausser argues, have brought important new products -- anti-AIDS treatments, cancer drugs -- to market, and have spurred America's booming biotech and computing industries. "The University of California alone has issued over five hundred patents since Bayh-Dole," Rausser says.

This is a powerful argument, but a troubling one. In an age when ideas are central to the economy, universities will inevitably play a role in fostering growth. But should we allow commercial forces to determine the university's educational mission and academic ideals? In higher education today corporations not only sponsor a growing amount of research -- they frequently dictate the terms under which it is conducted. Professors, their image as unbiased truth-seekers notwithstanding, often own stock in the companies that fund their work. And universities themselves are exhibiting a markedly more commercial bent. Most now operate technology-licensing offices to manage their patent portfolios, often guarding their intellectual property as aggressively as any business would. Schools with limited budgets are pouring money into commercially oriented fields of research, while downsizing humanities departments and curbing expenditures on teaching. Occasional reports on these developments, including a recent 60 Minutes segment on corporate-sponsored research, have begun to surface beyond the university. But the larger picture has yet to be filled out. It is this: universities, once wary beneficiaries of corporate largesse, have become eager co-capitalists, embracing market values as never before.

Copyright © 2000 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; March 2000; The Kept University - 00.03; Volume 285, No. 3; page 39-54.