Advice and Consultation, $10,000

When the University last November rejected a minority interest in a recombinant DNA firm in which Mark S. Ptashne, professor of Biochemistry and Molecular Biology, would play a lending role, President Bok noted that Harvard might find its "integrity hurt by the appearance of conflict between academic and financial interests."

By steering clear of the venture with Ptashne, the University as a whole cushioned itself, for the time being, against the potential risks of turning knowledge into dollars in the commercial world. But members of the University community have been using their particular expertise to make a buck for several years. In 1974, when harvard rejected participation in a public works project in Saudi Arabia because the government wanted to exclude Jewish emplyees, for example, two professors went ahead to consult on their own with the Saudis. While the Ptashne affair dealt directly with the question of University involvement with the outside world, it resulted in refocusing attention on outside activities of individual professors.

The professor who complements his University work with outside consulting is not a new phenomenon. Chemists have played advisory roles for the government and industry since World War I, as have economists. But following World War II, the amount of consulting grew. The government began seeking non-military advice from scientists, domestic and international advice from economists and political scientists. The increasingly technical nature of the business world opened up opportunities for academics in the private sector as well.

As the amount of time professors spent doing outside work increased, so did concern that the University would be adversely affected. In 1955, former President Nathan M. Pusey '28 felt compelled to reiterate the purpose of the University:

There is a new need to recognize that though universities have a concern and a responsibility toward the everyday world their primary, their fundamental responsibility lies totally elsewhere. This is for basic investigation, for the pursuit of learning almost for learning's own sake, for poetry and for vision, and then from this kind of experience for the provision within society of a critically constructive force.

No one is sure how widespread consulting is today or if it has increased over the last decade because often a professor's consulting activities overlap with his University duties. In addition, the Faculty of Arts and Sciences has no monitoring system to log how much time its members spend consulting. Professors often feel sensitive about the subject and rarely discuss it. Ptashne, for example, refuses to comment on his work for Genetics Institute. "It's something you don't discuss much. There's a feeling that it's not your business," Richard J. Zeckhauser, professor of Political Economy and chairman of the Kennedy School Research Committee, says.

While it is difficult to make generalizations about the University as a whole, it is possible to identify trends in specific fields. The amount of consulting depends on demand. Academics who offer political expertise find that their opportunities depend on the success of their particular political persuasion. "Harvard professors were quite actively involved in the early '60s when a local boy was president," Richard E. Neustadt, Littauer Professor of Public Administration, who worked in the State Department during the Johnson years, notes, adding that "different candidates tend to have different experts on whom they tend to depend." Economits never seem to have trouble finding work to fill their spare time.

The biggest consulting boom has been in biology. The great strides made in recom- binant DNA research have recently opened up opportunities in the one science where there has traditionally not been a commercial market for discoveries. As Robert Albert, dean of the School of Sciences at MIT, puts it, "Biologists are now dealing with something which engineers have lived with for 50 years." Now, many specialists agree that biologists will be spending more time outside the University in the coming years.

Professors say consulting aids their professional development as a means for keeping up with what's new in the field. "A professor brings back that expertise to his classes," a Division of Applied Sciences professor says. "If somebody spends a week at IBM, that person usually learns more about superconductivity than after spending a week here," he adds. For those studying government, consulting has almost become a necessity, providing what Neustadt calls "windows on data." He explains, "It's a form of quasi-academic study, a way to get at information I could never get any other way."

Except in government, where pay is usually limited to compensation for expenses, money plays a role in the amount of consulting a professor does. John Kenneth Galbraith, Warburg Professor of Economics looks cynically at those who explain their outside activities in non-monetary terms, identifying "an element of special pleading" in such an argument to "justify the type of activity they do." Professors don't like to discuss financial specifics, except to acknowledge that the pay is good enough to attract people. In economics, for example, consulting can bring in as much as $200 an hour, and one member of the department says that some of his colleagues earn as much as half of their incomes by doing non-University work. In 1975, it was estimated that a Business School professor could easily rake in $10,000 annually from just 20 days on the road. But most feel that the monetary incentives are often overstressed. "Do you like to eat to keep from starving or because you like eating?" one professor asks. "If a person's primary interest were pecuniary, he wouldn't be a professor in the first place," Albert Carnesdale argues.

Harvard professors do more than their share of consulting in comparison to professors at other universities. One reason is Harvard's high level of prestige: whether a professor is truly qualified to advise on a certain topic, the Harvard seal of tenure is usually enough to earn him outside respect. "If I'm testifying in court, 50 per cent of the reason they listen to me is because I'm a Harvard professor," Zeckhauser says.

The University is responsible for much of the increase in consulting according to some professors, because it pays less than many other schools, knowing that faculty members always have the outside option. "Over the decades, Harvard salaries have lagged behind other places. Because of the prestige, there's the expectation that you will convert it into the coin outside," Zvi Griliches, chairman of the Economics Department says.

The University does accrue benefits while its faculty members are pursuing their self-interest. One professor of Biochemistry said his ability as a professor increased tremendously because of his contact with the "outside world." In general, faculty members say that when they consult, they keep abreast of new developments, so the university as a whole is much better off academically.

But what good is a well-informed professor if he is never around for students to speak with? Otto Eckstein, Warburg Professor of Economics, who set up Data Resources Inc. and adopted half-time status in 1973 to work at the firm, acknowldges the tradeoff involved when a professor consults. "There is a loss; professors are not as findable," he says.

It is difficult to measure the amount of time that students lose because their professors are in Washington. In the economics department, the faculty-student ration can be a cause for concern, Griliches argues, explaining that some students in the department complain that they have problems reaching faculty members. But students can also take advantage of their professors' activities. Jonathan A. Berman '81 says that he has worked closely with his Kennedy School thesis advisor at the firm where the professor has been consulting and that he will be working there next year.

But a faculty member active in the outside world can pose risks besides a loss of time with students. Dean Rosovsky talks, for example, about "conflict of commitment": and even if a professor is spending his time at the office, he may be thinking about his outside work during those hours and may actually refuse to speak with students if he is concentrating on business commitment. This problem becomes serious especially when a professor is doing research in a field not related to his academic research. Albert recalls one extreme case concerning a chemistry professor who wrote the financial books for a coal company.

Most professors would argue that this problem is not so serious because people tend to do research in their areas of study. But Zeckhauser sees the danger that consulting opportunities may actually determine where a professor devotes his academic time, especially in lucrative and open fields such as genetic engineering. Another potential risk is that professors might abuse University resources. Because the Faculty has no pay scale for graduate students, professors could compete for the best and the brightest, giving an advantage to the faculty member with the accessibility to the most funds.

Despite the risks, real or imagined, extensive or miniscule, Eckstein and others believe that a University that allows its professors to consult will ultimately profit. "Suppose Harvard took a different approach and didn't allow any research," he says. You would not have people on the frontier of the sciences." Griliches concurs, noting. "You could say, 'Too bad, you have to stay home.' But would you be better replacing people in high demand by people without opportunity?"

The alternative to banning outside activity is to limit it by establishing guidelines. Since 1966, the University has had both an unwritten rule under which no professor could spend more than 20 per cent of his time consulting and written guideline stating that professors who believe that their outside research conflicts with their university work should report to the dean of the Faculty. Such a system of self-monitoring has not led to an accurate assessment of professors' activities. John T. Dunlop, who served as dean of the Faculty from 1969 to 1973 cannot recall any cases coming before him. And Rosovsky says he remembers only a couple of cases. In the wake of the increased interest in the whole issue, the Faculty's Committee on Research Policy (CRP) has been working on revisions to the 1966 statement. The proposed set of rules, postponed for approval after three Faculty Council debates, would specify certain circumstances under which a faculty member must report his activities to the dean. The "Statement of Policy on Conflicts of Interest for the Faculty of Arts and Sciences" would require that a professor taking on executive responsibility in a corporation, using unpublished information for profit, or conducting research elswhere, file such a report. The revisions were proposed mainly to "raise the conciousness" of the Faculty, Edward L. Pattullo, director of the center for behavioral studies and a CRP member, says. Calling the changes "marginal," he acknowledges, "I don't think anyone can really work out rules."

Currently, the responsibility for insuring that cases of conflict of interest or commitment do not arise lies mainly with the faculty. Carnesale says that most members feel compelled to comply. "It surprised me pleasantly that the professors took it seriously." But others think the Faculty will eventually have to monitor the situation. Rosovsky says he has rejected the policy of requiring professors to report their outside activities because "I'm not anxious to become a policeman." But both the Kennedy School and the Business School ask for written reports from their faculty, as does MIT. Even under the system that would require reporting to a dean or a department chairman, specific details and even the name of the company receiving the services are kept secret as "part of the confidentiality associated with the relationship," James L. Heskett, professor of Business Logistics explains.

Galbraith insists that even these details should be reported and publicized because "people ought to know if the professor is speaking for himself or for the corporation." Zeckhauser says the problem with current University policy is that for being a "good citizen," one who spends a lot of time serving on committees. Instead of setting rules, he argues. Harvard should adopt a system that would reward professors for spending more time at the University and that would increase the option of half-time for those who want to spend a lot of time advising.

In the future, the amount of outside consulting is likely to increase. Harvey Brooks, Peirce Professor of Technology and Public Policy, who worked on the 1966 guidelines, says that in the future more professors may be driven to earn money on the side. Faculty salaries have decreased by 25 to 30 per cent in real terms, and that squeeze has a cumulative effect: The higher that percentage goes, the more people may be driven to consulting