Published: April 30, 2009

Insofar as American-style capitalism is supposed to promote democracy, it does so by fostering accountability. This model of development is considered superior to its French and German counterparts because of its innovation of the stock exchange. Whereas the latter two relied on large banks or one national bank for corporate financing, stock exchanges allowed for financing on open and, ideally, transparent markets. The benefits of transparency are reduced corruption and, what amounts to the same thing, increased accountability. Political economists never cease to hawk accountability standards as the cure-all to authoritarianism, and democratic governments typically disclose their budgets. Accountability is more than an ethical nicety. It is a practical requirement for the system’s survival. The current financial crisis can be explained in terms of poor accountability standards.

The 2009 College Sustainability Report Card (available free at greenreportcard.org) evaluated the 300 universities with the largest endowments in the United States and Canada in terms of their commitment to sustainable and ecological development. Fordham University received an F for “Endowment Transparency” and “Shareholder Engagement,” and a C- overall. Green practices constitute just one of the axes along which universities can be evaluated and improved upon under a transparent budget and endowment regime. implications, let us consider whether implications, let us consider whether the rationale for accountability can be applied to the university. To what extent does the American university resemble a business? To what extent does it matter?

The consumerist rationale (where the student is the “customer”—a term that some universities actually use) for transparency claims that the consumer has the right to make an informed and ethical choice of purchase. This right is not always conceded. Take the ongoing debate over whether to label the origin of produce or genetically modified foods. However, in the absence of comprehensive health regulations or, more radically, democratic control over corporate domain, consumers cannot be placated with the power to “vote with their dollars” when such power is undermined by opaque practices.

But maybe the student is more akin to an investor since his or her financial involvement with the University is of a longer term and involves an expected return of sorts. This creates a stronger case for transparency, since even the staunchest opponent to securities regulations wants to know whether the “books are clean.” “Clean” here is void of any ethical consideration and is primarily concerned with the company’s solvability. (e.g. Will Fordham’s flimsy investments cause it to fold and diminish the value of students’ “returns,” or undergraduate degrees?)

Of course, you could deny that the university is or should be a business. Call this the idealist rationale. Even conservative policymakers uphold that higher education must be a venue for free thought and not simply a prop for the current order, whether it be the national cult, as was its original purpose, or to service the needs of the economy. (Though, these analysts selectively apply this ideal to countries where they wish to see regime change.)

Further, you may reject the segmented life that defers “real” decisions and political visions until after college—ironically, you “idealists” will be called the insular and bubbled-in ones. You may not view yourselves as cannon fodder for the job market; you may not be satisfied with cell-phone photos of a free concert thrown by your unquestioned benefactor as your sole means of creative expression; you may wish to know whence come the decisions for university expansion or formal censorship of the Vagina Monologues on campus. Most likely, you have little need for the consumerist rationale.

This brings us back to the potential concrete benefits of a transparent regime. The cause for budget and endowment transparency has been popularized in recent months thanks to the student actions at the New School and NYU and the divesture campaigns at Rochester and Hampshire. The motivations for these movements were naturally diverse, since everything from equitable allotment of university funds to ethical investment in the university’s endowment is predicated upon achieving transparency.

Of course, the cause for transparency can seem like the fancy of student activists who rely on analytic arguments and analogies to foster paranoia about a school that cannot be proven to have done anything wrong. Indeed, that is the paradox of launching such a campaign under an utterly opaque regime: one can only speak hypothetically about university involvement in military industries or squandering funds on high-profile demagogues. (Under conditions such as ours, it must be a fluke when Rose Hill’s The Paper reveals that $40,000 was paid to Newt Gingrich for a speaking engagement at Fordham Prep. Moreover, it constitutes downright negligence on the part of the administration when a simple internet search reveals that Fordham trustee, Robert B. McKeon, is the founder and president of Veritas Capital, which, since 2004, is the parent company of DynCorp International, one of the U.S.’s mercenary contractors in Iraq.)

How do you communicate to the common student the urgency of this cause? In the face of this paradox, you cannot—that is, unless the students remain vigilant and keep their ears open to those slightest slips of information, those rare moments when the administration faults in its mistrust of the public. No regime is ever hermetically sealed. There is always steam that needs to escape. The imperfect degree to which containment and control are maintained entirely depends on the amount of pressure inside.