What Price Harberger?

COST-BENEFIT ANALYSES

ARNOLD C. HARBERGER made a name for himself doing cost-benefit analyses of development projects in such far-flung places as Chile and Columbia, Uruguay and Bolivia, Panama and Mexico. He has written dozens of articles and a book, Project Evaluation, which explain how to calculate rationally the pluses and minuses of development projects.

President Bok seems to have used a calculus like Harberger's in deciding to offer the Chicago economist the top job at the Harvard Institute of International Development (HIID). Bok made a narrow judgment that Harberger was a good professional, an eminent academic and a superb source of consulting projects and income for the HIID.

He did not, however, consider politics--and not even Harberger's own politics, but simply the politics of this University. And politics, it is clear, can make a mess of rational calculation. Bok did not think to consult the professors and HIID staff, who would have to work with Harberger and be stuck with the image he would bring to the University. Bok did not even talk to the deans and faculty who are on the governing board of HIID. So in addition to substantive complaints of these groups about the appointment, they are mad because their advice was not sought about a matter that will directly affect their working lives.

The University, the HIID, and above all Arnold Harberger are now paying for Bok's lack of foresight. The effort to stop the appointment, to undo the mistake of the moment, is taking up faculty time, HIID staff time and Bok's time. And Harberger is paying a high personal price for Bok's mistake in the pain of being publicly denounced by his Harvard colleagues and by Harvard students as an immoral and narrow-minded man.

The question that Bok and Harberger should seriously consider before closing their deal is, what will happen if Harberger comes to Harvard? What would be the costs and benefits of his tenure at the HIID?

In 1973, the Development Advisory Service (DAS) developed into the HIID. Economists entirely staffed the DAS, which embodied the faith of the times in economic solutions to the world's ills. In 1973 the HIID charter explained its new purpose this way:

The new arrangement will retain the strengths of the DAS--the concept of a staff which circulates between home and overseas assignments, and experienced administrative mechanism for supporting overseas activities and strong links to the Department of Economics--and add the involvement of other disciplines, fields of interest and faculties.

The raison d'etre of the HIID was its broad appeal to many disciplines, its determination to draw on the wealth of knowledge of the entire University, not just the Economics Department.

If Harberger comes to Harvard, the HIID might as well revert to its old name. His strengths, the pluses in this cost-benefit analysis, are those of the DAS. The strengths he lacks are precisely the ones that give the HIID its identity.

Harberger would probably enhance HIID's ties to the Economics faculty. The vote to tenure Harberger within Economics was, reportedly, 18 to 1, with Stephen A. Marglin, professor of Economics, casting the lone dissenting vote. Dwight H. Perkins, chairman of the department, was chairman of the search committee that recommended Harberger to Bok. Harberger is well-respected in his field as an accomplished and technically proficient economist. (This is not to say that the faculty of the Economics Department unanimously believe he is the right choice for the HIID. There are some prominent faculty members who privately oppose the appointment.) Harberger's attractiveness to the Economics faculty as a big name also extends to the faculty administrators, who know that the HIID will share the cost of his salary.

BUT HERE THE BENEFITS END. The rest is a catalog of fiascos for the HIID. First, in all likelihood, many of the individuals within the HIID who care about non-economic matters would, one by one, slip away. Says one HIID staff member, "Harberger is to international development what plumbing is to architecture." That three of the six institute fellows have been willing to publicly state their opposition, thereby seriously jeopardizing their future at HIID were Harberger to come, is a measure of the depth of the opposition.

"He's going to bring a cloud with him to Cambridge Street and the rest of us are going to have to sit under it," says one.

HIID fellows are also worried that the Institute may not be a very pleasant place to work if Harberger comes. HIID would certainly become highly unpopular with student groups, and criticized as a place that doesn't care about human beings.

The same would be true for HIID staff--and for Harvard scholars not necessarily even associated with the HIID--in their work abroad. John Coatsworth, associate professor of history at Chicago who directed the University of Chicago's Center for Latin American Studies, said he "found it necessary to spend a good portion of my time trying to convey to the public in this country and especially in Latin America a sense of the diversity of viewpoints represented on our faculty." He told of one of his students who was denied access to an historical archive. "The director of the archive called him a 'Chicago Boy' and ordered him out of the office." Coatsworth said that Harberger is a symbol throughout Latin America "of economic policies that can only be imposed under fascist military regimes."

If Harberger comes, the HIID can kiss all the anthropologists good-bye. The chairman of the Anthropology Department, David Maybury-Lewis, who is also on the HIID governing board, has been one of the most vocal opponents of the appointment. And members of the department are unanimously opposed to the appointment. The HIID was in the process of searching for a staff anthropologist--that search is now frozen. Maybury-Lewis has been one of the few members of the Harvard faculty sincerely interested in working with the HIID, and Harberger's appointment would end the link.

Members of the Graduate School of Education would also be unlikely to associate themselves with the HIID. Its dean, Paul N. Ylvisaker, who is one of the four deans on the HIID governing board, has also publicly expressed his opposition. The relationship between the HIID and the Ed School has been cordial, "but could stand great improvement," according to one HIID staffer. Harberger's appointment would torpedo closer ties.

The list of opponents goes on, including historians, sociologists and Government professors. And much of this opposition has not reached the news, but is being privately expressed.

The future costs of the appointment should also be considered. The HIID, and possibly Harvard as well, will have trouble recruiting people eminent in the field of development, especially outside economics. Harberger's appointment could seriously impair the University's ability to lead the field of development into new, more fruitful directions.

Finally, there is what the economists call the "opportunity cost" to consider. The opportunity cost is what you lose by making one choice instead of another. Simply stated, HIID could have had somebody much better. Instead of a man who would make the HIID a "moral leper," in the words of one, it could have had someone with greater sensitivity to the ethical questions that are the daily fare of the developmental adviser.

IN OCTOBER, 1976, President Bok wrote an article in Change magazine entitled "Can Ethics be Taught?" In that article he said that it is "important to look to our colleges and universities and consider what role they can play" in the moral education of their students. He went on to say:

The moral aspirations of Harvard students undoubtedly profited more from the example of Archibald Cox than from any course, in ethics.

Arnold Harberger would not provide the example of a man engaged in sophisticated and inspiring moral thought. One HIID staff member put it this way:

Harberger isn't able to face up to the issues or even to be aware of the issues involved. He is an economic genius and a moral imbecile. To call his logic sophomoric would be an insult to sophomores. He's not even Machiavellian; he's just plam obtuse.

In a field that demands rigorous moral awareness, Harberger's moral obtuseness--which became abundantly clear at the debate on Sunday--is a devastating liability. His blindness has put him in this situation, where students and scholars alike rush to dissociate themselves from him.