Drag Racing the Prius: Government, Business, and the Dangers of Bad Metaphors

I think I'll take my Prius drag racing.

It makes perfect sense, right? After all, a Prius is just like those cars you see tearing down the track at drag races. It has four wheels, each with an inflated rubber tire. It has an engine powered by oil-based fuel. It's got a seat for a driver, with a steering wheel. It's got a transmission system, and a bunch of electrical support stuff. I mean, they're practically the same thing.

Of course, this is crazy. A Prius, despite some superficial similarities, is not a drag racer. Attempting to run mine on a drag strip is likely to fail, and cause a fair amount of damage in the process. A drag racer is built for speed. A Prius (unless you heavily modify it!) is built for gas mileage.

Along similar lines, why do so many people insist on arguing that "government should be run like a business"?

This is a popular metaphor, resurrected recently as a rationale for supporting Donald Trump for President. If the government should be run like a business, who better to run it than a successful businessman who is busy stocking his cabinet with other successful businessmen?

(I will leave aside the question of whether Trump is actually successful or not. For my purposes, whether he's a good businessman or a bad one is irrelevant.)

Businesses and governments do share some things superficially in common. What most people are thinking of when they use this comparison is that both have budgets. Businesses have revenues and expenses, and so do governments. Government at the national level tends to run a fairly serious deficit, which is seen in many conservative quarters as a bad thing. Businesses, or so it is claimed, can't run structural deficits for long or they go out of business. Hence, the argument that governments should be run like businesses.

(It should be noted that lots of other things have budgets, too - churches, households, stray pet shelters, homeowners associations. No one ever says we should run government like a church.)

There are a few other points of similarity - businesses and governments both have rules and authority structures, both are to some degree hierarchical, and both are made up of people who fill particular roles within the larger organization. These are minor matters, a little like saying that a Prius and a drag racer both have spark plugs.

The fact that "business" and "government" both belong to the broader category called "human organization" tells you very little about how to run the latter. The differences between them are far more important than the similarities. And like the comparison between Prius and drag racer, what is most important is the purpose for which each was built.

A business is an organization designed to produce some product or service for the wider world, usually (though not always) at a profit. A business creates what it creates. It is primarily concerned with two groups of people: the owners (who control the business, and in whose interest it presumably operates) and the customers. A business can define its own customer base, to a substantial degree, and doesn't need to concern itself with anybody else in society. Businesses don't even have to be all that concerned about their employees, except as these are necessary to produce the product or service.

Governments look nothing like this. They are not meant to operate at a profit, and those that do are generally regarded as corrupt and illegitimate. Governments do not produce individual goods or services, but provide public goods to a broad group of people known as citizens. Except at the margins, governments have very little ability to define who they serve, and governments that decide to serve only one segment of the population usually find themselves losing legitimacy. Legitimate governments can't pick their "customer base".

We can perhaps lay this confusion at the feet of Calvin Coolidge, who famously said, "the chief business of the American people is business." By this he meant that most individual Americans are chiefly concerned with making a living for themselves. In this, he was at least partially right.

But the chief purpose of the government is not to be a business, but to provide a safe, secure, and fair environment in which everybody can pursue their own individual business. If businesses are like sports teams competing, government is like the referee enforcing the rules of the game.

Ultimately, the purpose of a business is to advance the interests of its owners, usually a small group of people. The purpose of a government is to advance the interests of everybody. A business is partial to itself. A good government is impartial towards all.

In this sense, being a successful businessman makes one little more qualified to run a government than being a successful gymnast, or race car driver, or neurosurgeon. These are all completely different human endeavors requiring different skill sets. They may overlap in some ways (success everywhere requires determined effort and the ability to learn and adapt, for example), but the goals and purposes of each are radically different.

So let's stop talking about how government should be run like a business. I don't want my government run like a business (Verizon customer service, anyone?) I want it run like a government, with the interests of all of its people in mind.

Trustee-Assisted Suicide: The Death of Sweet Briar College

The following news is likely to seriously shake a good bit of the higher education world for a while:

Sweet Briar College Will Shut Down

This is a shocking decision for a college that has a good reputation, full accreditation, and an intact endowment (in the $85-$90 million range). Colleges that go under usually do so after long and painful struggles, and are often forced over the edge by the weight of financial obligations they are no longer able to meet. That's not the case here - the patient, as it were, is still healthy today. But it's on a path, or so the leadership believes, to eventual destruction.

I tend to accept the trustees' argument that this is the most merciful decision. Down the road from me  is another small niche college, Wilberforce, which has been going through a most painful effort to keep itself alive for the past several years. If it ultimately goes under - and it may very well - a lot of time, effort, and pain will have been spent, and a lot of students will get hurt in the process, to no avail. What Sweet Briar is doing now is far preferable to a long, lingering death with frantic but unsuccessful efforts to revive the patient.

Colleges are not people, of course. If a college can return itself to sustainability its lifespan may be very long indeed. But too often we don't ask the question - is that really possible? In this case, I think the Sweet Briar trustees have hit on the key question to ask: is the writing on the wall for small, mid-tier, niche liberal arts colleges?

I used to work for one such institution (not quite so small as Sweet Briar but not very large either), and I wonder to this day how it survives. Having spent much of last year going through the college search process with my daughter (who was admitted to several much more prestigious and well-heeled liberal arts colleges), I confronted the same question of that category in general. How many people are there who can afford to spend $20k or $25k or $30k per year - after all the financial aid is awarded - on their kid's education? That is beyond the means of most families, even those earning in the very low six figures.

I don't know the answers, in part because every school is different. As the article linked above points out, other schools in similar circumstances are choosing different paths and maybe those will work out. But from the standpoint of a family with one kid in college (and two more coming up behind), the economics are nearly overwhelming, especially given that there are MUCH more affordable options elsewhere. And with the rapid growth of income inequality in the US, the number of households who can afford this kind of education is not expanding.

One thing is clear: these kinds of institutions need to take a long, hard-nosed, difficult look at their futures. Some of them may survive, but they will do so only by adapting to become somewhat different from what they are now - which is itself a painful process. Some of them probably will not. I hope that those that will not will choose graceful exits. At least now they have a model to follow.

An Odd Corner of the Higher Education Industry

I saw this headline in today's Inside Higher Ed:

ConnectEDU Files for Bankruptcy Protection

This is a company that had sought to provide advising to students in navigating through high school and college and into careers. It got some press because of a fairly sizable grant it received from the Bill & Melinda Gates Foundation, which also strikes me as an odd choice.

It's not that guiding students successfully through secondary and post-secondary education into productive careers isn't a good thing to do. And it's not that there isn't some need for doing so that isn't being met now. But how you make enough money doing so, when the population most in need (the working class and poor) are those least able to pay (the working class and poor), is beyond me. Apparently it was beyond them, too. Hopefully Gates got some useful knowledge out of the experiment.

In the meantime, there are resources - more plentiful in some places than in others - in both high school and college to help students navigate these challenges. Most of those resources are free, which will continue to make them the preferred option, especially for those of limited means. Certainly universities need to do a better job in this area - but it appears the private sector isn't going to take the job away from us just yet.

Silly Blather About Master's Degrees

In today's Chronicle of Higher Education is one of the silliest articles I have seen in a while. I would ordinarily pass over stuff that's obviously wrong - if I wrote a blog piece every time I disagreed with someone's views on some internet-available publication, I would have little time for anything else include food and sleep. But this one in particular caught my eye, probably because of its provocative title. You can read it yourself here:

Those Master's-Degree Programs at Elite U.? They're For-Profit

Kevin Carey, Director of the education-policy program at the New America Foundation, is trying (in broad, sweeping brushstrokes) to equate master's programs at public universities with associates degree programs at the University of Phoenix and others - credentials of dubious worth that generate high debt rates and (he implies, though he has no data to this point) high student loan defaults. The argument is worth unpacking, if only to see where he's gone so horribly wrong.

First, though this tends towards ad hominem territory it is worth noting that Mr. Carey, though he is billed as "an expert" on "higher education issues", has never actually worked for a university as more than an adjunct instructor, nor is there any indication that he has ever run a master's program. The section of his official bio with regards to his career reads thus:

Prior to joining New America, Carey worked as the policy director of Education Sector, and as an analyst at the Education Trust and the Center on Budget and Policy Priorities. Previously, he worked for the Indiana Senate Finance Committee and as Indiana's Assistant State Budget Director. He also teaches education policy at Johns Hopkins University.

Aside from some classroom work (at what level it doesn't say), it's not clear that Mr. Carey has ever worked in the industry he claims to be an expert in. I'm not sure I follow that logic, but what do I know.

Getting to the substance of his argument - Mr. Carey's main claim that public university master's programs are the same as worthless for-profit ventures rests on a number of observations about rising median debt levels among master's-seeking students. Three specific claims he makes:

According to the latest results, the median debt accrued by students completing master’s degrees in 2012 was $57,600, a 31-percent increase from just four years earlier, after adjusting for inflation.

The median debt for master’s degrees in education, for example, grew from $33,910 to $50,879 in four years.

Median debt for people in the broad fields that grant master-of-arts degrees grew from $43,247 to nearly $59,000.

The first red flag here is that I can't tell from these statements whether he is talking about debt accumulated while in graduate school or total debt accumulated by the student. If these numbers represent the latter, they could easily be the result of rising undergraduate debt loads, which we know have been increasing in recent years. Undergrads who go on to get master's degrees - as many have in recent years, trying to get an edge in a weak labor market - carry their debt with them. So Mr. Carey may well be blaming the problem on the wrong source. At the very least, he is guilty of not presenting his data clearly - and when I see an unclear presentation like this, it makes me wonder whether somebody is hiding something.

Moreover, Mr. Carey implies in his article that this debt is problematic because students getting master's degrees either aren't getting jobs, or aren't making enough in those jobs to pay the debt back - a problem that has been documented with respect to many for-profit degrees at lower levels. But in making this claim, Mr. Carey offers no data or information at all. The best he can muster is hyperbole and snark, to whit:

Do you know any recent M.A. graduates with lots of money to burn?

Similar numbers appear in the catch-all category of "other" master’s degrees. Many of these have—just like "office management"—weak ties to established professions.

A one-year master’s program in something like "government" is accountable to no one.

These assertions sound vaguely sinister, but they are at best anecdotal - and at worst, imaginary. They sound like the claims of someone who has not actually bothered to take the time to research the subject he's writing about, but has decided instead to shoot from the hip and hope that writing style and the general assent of his audience to his political leadings will earn him nods of approval. He is, in other words, just like Thomas Friedman and most other op-ed writers: opining on things he knows little about with sweeping generalizations and a touch of attitude.

I don't know the relevant data for graduate programs across the country. I do know much of this information for my own institution, at which I oversee over 60 master's programs. Here are a few relevant observations:

- Half of our graduate students do not borrow any money at all while in graduate school; of those that do, very few run up the kind of debt that Mr. Carey is indicating, and if they did it would be almost entirely in support of living expenses (money that does not go to the university), not tuition.

- Contrary to Mr. Carey's reference to "largely unaccountable terminal master's-degree programs that offer little or no financial aid", many of our master's degrees, especially in STEM fields, do carry significant financial aid support.  My office alone oversees $1.8 million in tuition scholarships for graduate students across all colleges every year, most of them pursuing master's degrees, and I know that other institutions in my state spend far more. And that's not counting institutional support for graduate assistants - we have about 550 of those every year, all of whom get full tuition waivers.

- Most of our graduate programs care deeply about the careers they are preparing their students for, and take the time to track placement rates either in getting jobs or in moving on to PhD programs. Just because these programs aren't accountable to somebody in Washington doesn't mean there's no accountability - poorly-performing programs face a host of sanctions, up to and including being shut down.

- Even in the one area where he might have a point - Master's of Education programs - our enrollment numbers have plummeted, suggesting that the market is working by discouraging students from chasing a degree that may not help them as much as it once did.

In short, Mr. Carey has painted a picture that looks wholly unlike the reality I work with on a daily basis. Perhaps my institution is not the kind of place he meant to pick on - if so, he should say so. But if he expects to be respected by those of us who work in the industry and read the Chronicle, he should take the time to do his homework before coming to class. Perhaps in my next blog post, I should make an argument for government regulation of op-ed authors...

How to Tell Your Industry Is In Trouble: Scare Tactics Disguised as "Research"

I've blogged before (here being the most recent) about the troubles of the for-profit, online education sector. The stories of closures, cutbacks, and retrenchments - not to mention investigations and legal woes - over the past year have been legion, and at some point I just stopped chronicling them. The evidence of an industry sector in crisis is pretty strong at this point.

So what does an industry in crisis do? Why, commission its own "research" and try to frighten states into backing off with their pesky investigations, that's what. We are now treated to just such a spectacle designed to "prove" how much states would have to spend if it weren't for those wonderfully civic-minded for-profits picking up the slack:

If For-Profits Vanished

One can only wonder what sort of hair-brained economic assumptions are baked into this "research" model. Given the radical decline of state support for higher education in recent years, I doubt very much that state legislatures would feel at all obligated to pony up $8.4 billion even if Phoenix and all of its ilk disappeared tomorrow. And given the marginal success rates of some institutions in the for-profit sector, it's likely that many of those 1.4 million students wouldn't go to college at all - which might not be a bad thing, especially if there are good alternatives in vocational schools and community colleges.

The fact that this "research" is funded by Phoenix's parent company and its founder's foundation, of course, rather gives the game away. No, funding does not always buy the results that you want. But given that the authors of this report seem to have gone out of their way to avoid bringing folks who might have a more objective (or even dissenting) view on board, it seems a pretty good bet that this was largely "made to order". I just hope that state legislators (including those in my own state) ignore this bit of nonsense.

More Bad News from the For-Profit Higher Ed Sector

I've written before (posts too numerous to list here, search under the "higher education" label) about the for-profit higher ed sector and its woes. When online education first became a thing some ten years ago, enthusiastic boosters predicted that the University of Phoenix would put traditional "brick and mortar" institutions out of business. Turns out that maybe that model isn't so robust:

Apollo Group Plans to Lay Off 500, as Does Education Management Corp.

A drop in your customer base of 18% in a year is enough to cripple almost any business, as is a 36% decline in revenue. These are not signs of a business model poised to take over the industry - they're signs of a dying flash in the pan. For all the jargon about "disruptive change" and "avalanches coming", the best efforts of the online-education sector have yet to demonstrate that they have the staying power to really force major change. In a few more years we may be writing their obituaries.

I could speculate as to why things have gone this way, but I would do so largely without data. It's tempting, from the point of view of traditional higher ed, to say that this is a failure of Phoenix and its brethren to manage to produce a quality product. There's some truth to that - by all known measures of quality and productivity (publications, grants, stature and reputation of faculty, patents, etc.) online "universities" can't begin to compete with even middle-tier traditional institutions, whose faculties are filled with PhDs from eminent institutions who don't just teach, but expand the frontiers of knowledge on a daily basis. Possibly that edge in quality of faculty - who are, in essence, the "product" that universities sell - has persuaded the market.

Whatever the underlying causes, I expect to see more news items like this one in coming months and years. Online universities won't disappear overnight - they may find a market niche and hang on for a very long time. But the chances of their dominating the higher education landscape in the future look increasingly remote.

Barking Up the Wrong Tree on Higher Education

Within higher ed there's been much buzz lately about a National Association of Scholars report released last week that took Bowdoin College (and, by implication, most elite liberal arts colleges) to task for being, in essence, too liberal. I have blogged about this previously; the fact that the final report said more or less what people expected it to say should come as no surprise. It has touched off conversations, at least in the world of elite liberal-arts colleges, about whether there is a sustained attack from the right against the liberal arts, and how you would decide what is "too liberal".

Along similar lines, we've seen politicians like Florida Governor Rick Scott (not known for his measured and carefully considered words) bashing certain majors (in his case, anthropology) and suggesting that students should major in areas with good job prospects and avoid the fuzzy liberal-arts stuff. It's an old argument, and unlikely to go away anytime soon; it's also a convenient, less obviously political hook for people who (like the NAS) are really interested in ideology but want to cloak themselves in the language of jobs and economic development.

Lost in this ongoing scrum is a core truth: what you major in is far less important than what skills you acquire in college. We've known this for years, but every once in a while someone releases yet another survey making the point, as this story in today's Inside Higher Ed does.

The message is the same every time: most businesses (being reasonably smart) want to know what you can do. Knowledge, especially technical knowledge, can be learned (if you know how to learn), and in many fields most of what you learn today will need to be re-learned in 5 years anyway. Moreover, knowledge that can't be effectively communicated is worthless. And it is a rare organization in which people work alone; generally we work in groups, or with other people in a variety of ways. So there's a whole set of skills there that can be learned across nearly any major (and should be).

This is not to say that major doesn't matter at all. If you want a job as an engineer, you need to major in engineering - in large part because of the base of knowledge and professional skills you need in that field. But if you're a great engineer who can't write, can't give a presentation, and doesn't work well with others, you're not a great engineer - you're at best a mediocre performer who is going to struggle in your career. Moreover, for all of the emphasis today on STEM careers there are lot of non-STEM things we need people to do, from teaching to management to organizational design to graphic design and creativity.

It seems to me that the shrill caterwauling over whether liberal arts is "too liberal" or whether some majors are appropriate for public dollars or not is coming from small, committed ideological tribes who have their own axes to grind. If we want to make higher education better, we are better off ignoring these folks - who are more interested in scoring points for their tribe than in the public good - and focusing on real-world conversations between businesses, higher education, and the communities they serve. Let's filter out the useless "debates" and focus our time on more useful pursuits - whatever we may have majored in in college.

Tell Me Again Why We're Worried About For-Profit Higher Education?

Another in a long string of setbacks in the for-profit education sector:

Accreditor Puts Ashford on Notice

It looks a little cheesy that this institution tried to gain accreditation under one region (Southwest, which turned it down) and has now turned around and applied in the midwest. After years of being told by various know-nothing outsiders that for-profits were going to "upend" higher education and do away with existing universities, it's good to see reality reasserting itself.

Trouble at the University of Phoenix

Phoenix, the granddaddy of the for-profit higher education world, appears to be in trouble with their accrediting body. Given the troubles in the for-profit sector, this is not surprising - but it is a new twist.

Phoenix is accredited by the Higher Learning Commission (HLC) of the North Central Association - the same accrediting body that oversees Ohio State, the University of Chicago, most of the midwest, and my employer. The fact that Phoenix is accredited by the same organization that accredits many of the nation's finest colleges and universities has long been a secret sore spot for a lot of "traditional" academics - they're forced to take Phoenix seriously even though they don't really want to.

To be clear, the article linked above does not say that Phoenix is about to lose their accreditation. But it does raise a very significant question about the business model of for-profit education and its uneasy relationship with higher education in America. The key section of the story is this:

“Specifically, the review team concluded that the University of Phoenix has insufficient autonomy relative to its parent corporation and sole shareholder, Apollo Group, Inc., to assure that its board of directors can manage the institution, assure the university’s integrity, exercise the board’s fiduciary responsibilities and make decisions necessary to achieve the institution’s mission and successful operation,”

The Apollo Group is essentially a holding company for the University of Phoenix; the university produces 90% of Apollo's revenue, so it is to a large extent a shell around the university operation. This is a common model in the business world, and there's nothing wrong with it in business terms. But by this warning the HLC seems to be suggesting that this model of ownership and control may not be structurally compatible with the standards of American higher education.

It's not hard to see why. Faculty at almost all colleges and universities worry about their administrations putting "the bottom line" above academic quality. But being non-profits run by boards of trustees who have no financial stake in the university, and having no shareholders to answer to, the real structural danger of this is low. Despite images of academic administration being "the dark side," most academic administrators were (and remain) faculty members, and they for the most part don't want to pursue revenue and profit at any cost. There is certainly no structural incentive to do so in traditional universities; presidents and provosts who increase the bottom line at the expense of the quality of the institution don't materially benefit from doing so.

On the other hand, an Apollo Group-like structure does have built-in incentives for this sort of behavior. Apollo (NASDAQ: APOL) is a publicly-traded corporation. When corporations that have to issue quarterly financial statements run into trouble, they will naturally turn to their revenue-producing units to, well, produce more revenue and/or cut costs. If they're like most corporations, the CEO and other top-level leadership have a direct and immediate financial stake in the company's fortunes, both through their compensation packages and through their stock holdings. Imagine a university at which the president's pay depended, every three months, on how the university's bottom line was doing.

This is a serious challenge to for-profit models of higher education. As long as Phoenix and its for-profit brethren were growing and exuded an aura of inevitability, people seemed content to leave well enough alone. Now that things aren't going so well (Phoenix and many of its kin are in the midst of a massive retrenchment), people are starting to look a little more closely. And the questions are proving to be uncomfortable.

Wall Street's answer, of course, would be to do away with the accreditation standards and "let the market decide". But American higher education didn't get to be the global gold standard by playing fast and loose. The accreditation system in place, as frustrating and sometimes hide-bound as it can be, has much to do with American dominance in university education. Scrapping it would indeed be killing the goose that lays golden eggs.

It will be interesting to see how this plays out over the next year - whether Phoenix (the standard-bearer in the for-profit world) can figure out how to insulate its academic operations from its for-profit realities. If they can't square that circle, that may spell the end of the whole experiment. Even if they do manage to hang on, I suspect it will be under much more significant constraints than they have faced in recent years.

Another Casualty in For-Profit Higher Ed

I've posted before (with perhaps a touch of Schadenfreude) about the travails of the for-profit education sector. After some years of being told that "the Phoenixes are going to take over the world", it's good to see some perspective returning.

In case you're still not convinced, here's still another in a line of retrenchments in that sector:

5 For-Profit Campuses Lose Accreditation After Abrupt Closures

My guess is that the juggernaut-like expansion of for-profit higher ed had little to do with new and exciting technologies, and a great deal to do with cheap investment capital blowing bubbles everywhere. Now those bubbles are popping and we're returning to a little more sense. Yes, established non-profit higher ed faces a lot of challenges. But I don't see the upstarts taking over anytime soon - certainly not with their track record in recent years.

The Central Problem in Higher Education Reform

There is a lot of talk about "reform," "revolution," and "disruptive change" in higher education. Not a week goes by when we don't see an article about MOOCs, or online education, or the Khan Academy, or some other new and exciting Next Great Thing. Many in higher ed are genuinely concerned about the sustainability of our enterprise - as we should be.

While not every board of trustees will go bananas and fire their president in a panic (as UVA's apparently did), there clearly are demands building for change. Lots of interesting sub-conversations are going on: are government subsidies for higher ed driving up the price? Can online education provide the same quality and results as traditional education? Are for-profit universities innovators or charlatans?

All of these are important conversations, and I wish I had more time to keep track of them all. At present, I try to take in what I can, and so appreciate it when nice people at the Chronicle summarize multiple arguments for me, as one columnist did here.

The entire article linked there is worth reading. But there's one particular spot that I thought especially noteworthy, in a broader discussion coming out of MIT's Media Lab about fundamentally reconceptualizing education:

In the words of Joi Ito, the dynamic new head of the lab, himself a famous college dropout, the key to 21st-century learning is "antidisciplinary," not just "interdisciplinary." Ito's goal is "a world of seven billion teachers," where everyone on the planet has something important to teach to someone else, and everyone does.

This, it seems to me, starts to get at the fundamental business challenge faced by higher ed. In this case, I think Mr. Ito has it wrong, but at least he's raising the central question.

What is that central question? Briefly put, if you want something like university education to be sustainable this is the puzzle you have to solve: how do you get somebody to pay enough money to subject experts in exchange for them developing that expertise and sharing it with others who want it?

I emphasize the term "experts" here, because this is where I think the "seven billion teachers" image is misleading, even misguided. It's not that we don't all have something to learn from each other. But not all knowledge is equally valid or equally useful. Would you learn chemistry from an auto mechanic? Neuroscience from a lawyer? Music from an accountant? The "wiki" approach to knowledge is interesting, but it doesn't generate the knowledge and innovation we really want - the stuff that advances our understanding and makes things better than they are now.

The problem with expertise is that it takes time and effort to acquire and maintain - and that means that somebody has to pay for it. With a few notable exceptions, few people will dedicate their lives to becoming good enough at something that they are competent to teach it to others for free. People need to make a living, and many people want to not just survive but have the resources to improve their and their children's lives. So somebody has to pay.

All of the other conversations - about MOOCs, online education, for-profit vs. non-profit, disciplinary vs. interdisciplinary, government grants vs. student debt loads - are dancing around this one central puzzle. We need to figure out, as a society, how we pay for something we clearly want - the development and dissemination of expertise. The present model of universities, for all that it is flawed and old, manages to accomplish this. When somebody comes along with a better way of achieving the same thing, people will sit up and take notice. Until then, I'll continue to enjoy the conversation - I just haven't seen any real answers yet.

Universities Acting Like BAD Businesses - Again

One of the recurrent themes here has been the intersection between universities and business. While many faculty friends of mine over the years have claimed that universities are not businesses, I beg to differ. Universities are businesses, they are just rather odd ones.

Acknowledging that universities are indeed businesses doesn't excuse them from behaving badly. In writing on the UVa flap over the firing and subsequent re-hiring of Teresa Sullivan, I argued that the lesson wasn't that universities shouldn't act like businesses - it's that they shouldn't act like bad or stupid ones.

Today we are treated to a new story, published in the Chronicle, about yet another university going off the rails when it comes to business practices. This one involves the University of Alabama, which reported threatened legal action against a small-town bakery for making cookies and cakes featuring the university's "Crimson Tide" elephant and other Alabama-themed icons.

The threatening letter in question actually came from the Collegiate Licensing Company, a corporation hired by UA and some 200 other colleges and universities to represent the university on trademark issues and manage its licensing deals. The letter was a standard "cease-and-desist" type: stop making the cookies, or pay the university the mandated licensing fee.

The baker, Mary Cesar of Mary's Cakes and Pastries in Northport, Ala., has become an instant hometown hero. Hers being a small business, she doesn't have the money for the licensing fees, and lots of people have flocked to her defense. In the current economy, the "big, bad corporation vs. the small main-street business" narrative is easy to construct. After coming under a hail of PR gunfire for a few days, the university instructed its reps to back off.

Those paying close attention will note that this isn't the first flap the Crimson Tide has gotten itself into over trademarks. Earlier this summer, a federal appeals court ruled in favor of an artist who had been painting scenes of Alabama football. The university tried to argue that the uniforms and logos in the paintings were protected trademarks, for which they deserved royalties. The court agreed with the artist that the works were protected by the First Amendment as artistic expression. No word yet as to whether cookies count as art (how good are they?), but the university lost $2 million fighting that earlier case - not a sound business decision.

The problem here is not that the university, in the cookie case, is technically wrong - this is the kind of legal action that corporations take all the time to protect their trademarks, and it's entirely possible that if this case were to go to court, the university would win. The problem isn't even that it makes the university look politically tone-deaf, although it does. The administration can't hide behind having hired an outside company - those are your reps, you hired them, you have to keep them on an appropriately-lengthed leash. The political damage in this case is probably containable, and won't last forever. But it was stupid and entirely avoidable, and makes them look (for a little while) like fools.

The real problem is that the university has misunderstood the nature of the trademarks it "owns". The fact that the "Crimson Tide" elephant, colors, UA logos and the rest are popular is the direct result of having been given both subsidies and (far more importantly) the imprimatur of the state. UA is the "flagship" state school, bearing the state's name. The university didn't create that, it was handed to them - by the state government, on behalf of the people of Alabama - on a silver platter.

So for UA (or its hired guns) to go out and claim that these are somehow "their" trademarks is absurd. Their popularity, as well as their very existence, comes directly as a gift from the people of Alabama. Big private corporations like Apple and Disney did create their own trademarks, and the value underlying them. UA did not, and therein lies the difference. One would imagine that sooner or later, the leaders of Alabama's flagship public institution will figure that out.