Economics Welcomes One, Loses Another

The story of how Robert J. Barro was won from Cambridge to New York is more reminiscent of the Red Sox and Yankees than the calm heads of Ivy League academe.

Barro, currently Waggoner professor of economics, earlier this week accepted tenure at Columbia University--supposedly lured by a package more suited to a sports star than an academic luminary.

But even as the chair of Harvard's economics department says the University may soon have to make Major League Baseball-style offers to hold on to academic stars like Barrow, President Neil L. Rudenstine reaffirmed this week Harvard's refusal to enter bidding wars for high-dollar scholars.

Columbia officials and Barro himself refused to confirm the account of deal published in Wednesday's New York Times,or to comment on the exact terms of the contract.Richard Clarida, chair of Columbia's EconomicsDepartment, would say only that the package wasenough to "encourage [Barro] to think aboutColumbia."

Regardless of its actual terms, the bidding warthat netted Barro this contract still seems anominous precedent even for the world's richestUniversity, which has not lost a senior economicsFaculty member since 1979.

Rudenstine said in an interview Wednesday thatHarvard would not offer equally lucrative packagesto attract or keep high-profile faculty. Thisstatement contradicts the Times' report that Deanof the Faculty Jeremy R. Knowles is building a"war chest" to fend off faculty raids like the onethat netted Barro.

"We can't and we won't. As a matter ofprinciple we won't," Rudenstine said. "The onlyway you can [do that] is to have what we've alwaysrefused to have: highly distributed Faculty[salaries]."

Rudenstine said Harvard probably has thehighest average faculty salary of any Ivy school,but that most Faculty have salaries not far fromthe mean.

He said he sees "big problems" inherent in veryhigh-dollar offers to Faculty being courted byother schools--such as stagnation in the salariesof most Faculty.

He said Harvard's attractiveness as an academiccommunity should balance its refusal to enterbidding wars in most cases. This is an argumentsimilar to that made by Harvard's financial aidofficers in cases where less prestigious schoolsmake students far more generous aid offers.

"The things that would matter most in aprofessional and personal decision [for me],assuming that I could make a reasonable wage,[would be] the quality of my colleagues, thequality of my students, how cheerful my wholefamily would be," Rudenstine said.

"That's why we lose so few people fromHarvard," Rudenstine added. "Most of them couldmake quite a bit more money elsewhere."

For going elsewhere, Barro reportedly will becompensated with $300,000 per year in salary, plusa $55,000 post at Columbia for his wife and aplace for his son in a Manhattan private school.In addition, the Times reported that Columbia"eased out" the prior tenant of an apartment theBarros were interested in and renovated it beforeoffering it to Barro at half the market rate.

Jeffrey G. Williamson, chair of Harvard'sEconomics Department, says that "anyone who'staken any economics" could learn a lesson fromBarro's departure.

"It seems to be that you can't be the bestuniversity in the world or even compete with thebest universities in the world if you're notwilling to set aside resources to go after facultylike Robert Barro," said Williamson, who is alsoBell professor of economics.

At Columbia, Clarida downplayed the importanceof money in Barro's decision, but said Barro'scompensation was considerably larger than thenormal going rate for faculty.

"It's safe to say that if all our economicsfaculty made the amount he did, we would have tohave a much smaller department," Clarida said.

"You can't have a great university without agreat economics department, and all the greatuniversities tend to go after people like RobertBarro," he added.

Clarida recalled from his days in graduateschool at Harvard that the University has alwaysbeen reluctant to enter bidding wars.

"Any Harvard professor, if he were reallyconcerned about how much money he made, [couldfind more money elsewhere]," Clarida said.

Williamson said he was concerned that otherschools's more lucrative offers would soon leaveHarvard behind if the University did not turn its$11 billion-plus endowment towards higher bids fortop faculty.

"I don't feel it's life threatening yet,"Williamson said. "But [there are cases] when ifthe University wants to play in the major leagues,it needs to make the same kind of offers that aremade in Major League Baseball.

Regardless of its actual terms, the bidding warthat netted Barro this contract still seems anominous precedent even for the world's richestUniversity, which has not lost a senior economicsFaculty member since 1979.

Rudenstine said in an interview Wednesday thatHarvard would not offer equally lucrative packagesto attract or keep high-profile faculty. Thisstatement contradicts the Times' report that Deanof the Faculty Jeremy R. Knowles is building a"war chest" to fend off faculty raids like the onethat netted Barro.

"We can't and we won't. As a matter ofprinciple we won't," Rudenstine said. "The onlyway you can [do that] is to have what we've alwaysrefused to have: highly distributed Faculty[salaries]."

Rudenstine said Harvard probably has thehighest average faculty salary of any Ivy school,but that most Faculty have salaries not far fromthe mean.

He said he sees "big problems" inherent in veryhigh-dollar offers to Faculty being courted byother schools--such as stagnation in the salariesof most Faculty.

He said Harvard's attractiveness as an academiccommunity should balance its refusal to enterbidding wars in most cases. This is an argumentsimilar to that made by Harvard's financial aidofficers in cases where less prestigious schoolsmake students far more generous aid offers.

"The things that would matter most in aprofessional and personal decision [for me],assuming that I could make a reasonable wage,[would be] the quality of my colleagues, thequality of my students, how cheerful my wholefamily would be," Rudenstine said.

"That's why we lose so few people fromHarvard," Rudenstine added. "Most of them couldmake quite a bit more money elsewhere."

For going elsewhere, Barro reportedly will becompensated with $300,000 per year in salary, plusa $55,000 post at Columbia for his wife and aplace for his son in a Manhattan private school.In addition, the Times reported that Columbia"eased out" the prior tenant of an apartment theBarros were interested in and renovated it beforeoffering it to Barro at half the market rate.

Jeffrey G. Williamson, chair of Harvard'sEconomics Department, says that "anyone who'staken any economics" could learn a lesson fromBarro's departure.

"It seems to be that you can't be the bestuniversity in the world or even compete with thebest universities in the world if you're notwilling to set aside resources to go after facultylike Robert Barro," said Williamson, who is alsoBell professor of economics.

At Columbia, Clarida downplayed the importanceof money in Barro's decision, but said Barro'scompensation was considerably larger than thenormal going rate for faculty.

"It's safe to say that if all our economicsfaculty made the amount he did, we would have tohave a much smaller department," Clarida said.

"You can't have a great university without agreat economics department, and all the greatuniversities tend to go after people like RobertBarro," he added.

Clarida recalled from his days in graduateschool at Harvard that the University has alwaysbeen reluctant to enter bidding wars.

"Any Harvard professor, if he were reallyconcerned about how much money he made, [couldfind more money elsewhere]," Clarida said.

Williamson said he was concerned that otherschools's more lucrative offers would soon leaveHarvard behind if the University did not turn its$11 billion-plus endowment towards higher bids fortop faculty.

"I don't feel it's life threatening yet,"Williamson said. "But [there are cases] when ifthe University wants to play in the major leagues,it needs to make the same kind of offers that aremade in Major League Baseball.