Swarthmore, like virtually all American colleges and universities, is presently engaged in serious collective scrutiny of its spending habits. The hope in our case and many others is that small, incremental frugalities will head off any need for more drastic measures to control spending.
There are two big problems with this approach to cost control in a relatively decentralized academic institution.
The first is a lack of information about the importance or impact of any single change to spending. If you go to the often-considerable effort of changing a personal habit, you tend to get fairly immediate feedback in your own life routines or in your body about the positive consequences and whether those results justify the effort of maintaining a new routine.
Institutional budgets by contrast are opaque and they operate at annual or longer time cycles. It’s hard to know whether a change in practice is worth the trouble. It’s always easier to believe that difficult choices can be avoided by squeezing excess and waste out of existing spending, but sometimes that kind of cost-cutting just ends up imposing performative hassles and strictures on everyday business while the tough choices get deferred, and at no real savings. On the other hand, sometimes there are tons of little economies that are easy to achieve that add up to a structural solution to general budgetary woes.
What most people need in order to decide whether changes in habit are worth the trouble is a more transparent account of the savings derived from small changes in behavior in relationship to a total institutional budget and in relationship to the total range of costs and expenditures within that budget.
I’ll give a really trivial example here at Swarthmore to illustrate. I play tennis once or twice a week at Swarthmore’s indoor tennis court. There are three courts. In the past, when there’s only one group on a single court, the building staff have allowed the players to have one bank of lights on the adjacent courts on in addition to the lights over their own court. (This leaves two banks of lights on the adjacent courts dark.) Otherwise, with just the lights over a single court on, the visibility is relatively poor, the court fairly dark. It’s been decided that one austerity measure we can take is to turn off the one row of lights on the adjacent courts, leaving just the lights on over the one court.
This is a trivial sacrifice that I and I think all other tennis players are happy to make. It’s only a slight inconvenience to play with poorer visibility against the context of the luxury of having a court to play on at all. And yet, you can’t help but be curious about the exact savings involved. How much does it cost for those two extra rows of light for the 90-120 minutes of a game, and how often in an average week would the college be paying that cost? If it turned out that the total weekly savings was $25, and thus the annual savings was $1,300 (less a few weeks when the facility is closed or on highly restricted hours), well, is it worth it? How many $1,300 habits need to be given up before the savings start to matter against the current shortfall, and are there anywhere near that many habits of that kind? If the total weekly savings from this change was $100 or $500, that starts to feel psychologically substantive.
Of course, if the lights cost that much or more to operate, then that raises completely different budgetary questions. Are there cheaper lights? Maybe we should shut the indoor courts any time the weather outside is decent enough to play there. Maybe we should charge tennis players a small fee to offset the cost of the lights. Maybe we’d be better off allowing outsiders to play on the courts for a substantial membership fee (but one well short of the local competitors).
There’s a sweet spot of “This small change produces meaningful savings” between “This change is a hassle that saves us a handful of pennies” and “The significant budgetary impact of a small change reveals that the entire expenditure on some routine practice is insane and needs immediate review”.
Every single change of habit needs an informational feedback loop if it’s to take hold and make sense. Otherwise, it just disappears into a black box.
The second major issue is a classic game-theoretic problem. You have little motivation to change your own habitual practices if you get a sense that others are not doing (or being made to do) the same. If one unit in an institution gets with the new religion of austerity while another remains profligate and there are no consequences that follow to either, then the people who are careful spenders feel taken advantage of.
This problem is really exaggerated by an inclination in a lot of colleges and universities to take all disciplines and departments as entitled to the same dispensation of resources but also as subject to the same kinds of cost-cutting imperatives, a kind of faux-egalitarian rhetoric. So, for example, when administrations direct libraries to cut journals budgets, libraries often have to turn to departments and ask each of them to volunteer a few titles that they can get rid of, so that the cost-cutting seems to fall evenly on all, to be a collective responsibility. But if you did a relatively dispassionate cost/benefit analysis, you might note that you could cut three hugely expensive journals (usually but not always in the sciences) at the cost of thirty or forty journals in the humanities and social sciences.
Mostly academics avoid having that kind of conversation, where we have to ask what the relative worth of one important but expensive journal in one discipline is over ten such journals in another discipline. Instead we tend to say, “You tend to your knitting, and we’ll tend to ours; we’ll cut one journal and you cut one journal”. We don’t tend to want to talk about which disproportionately expensive projects or commitments are worth it and which aren’t worth it, because then we’d have to try and convert our divergent apples and oranges to some common fruit standard.
If you want people to economize, they have to know and see that everyone else is economizing, and they have to trust that the economizing is happening in a way that is proportional to the expenses involved in other units and divisions of the institution. No one wants to spend a lot of time scrimping and saving only to find that across the quad, the champagne and caviar is still flowing with cheerful abandon. No one wants to be told that they’ve got to cut ten percent of their budget when they’re already a bare-bones operation while another unit or department can get rid of ten percent just by cutting one of a number of luxurious expenditures.
(I’m leaving aside here the very different situation in large universities of divisions or schools that “sit on their own bottom”, that have completely separate streams of revenue that only barely intermingle with the general budget.)
So imposing austerity both equitably and rationally is sometimes not possible, and yet you have to persuade people that both principles are in play.
The way that budgets in most academic institutions work aggravates the problem still further. I’m not the only person who has been struck by the absolute absurdity of what often happens near the end of an annual budgetary cycle. If you’ve got a budget which has some fluctuations in how heavily it’s used from year to year, say a line item for speakers and events, you are often under serious pressure as the end of a budgetary year approaches to spend the whole thing down so that you don’t get an automatic cut on the grounds that you don’t need the budget. But if you used the whole of the budget in the two years previous, and ran out of the budget early in the year in the two years before that, cutting back in the one year you don’t use it is a totally counter-productive practice. The message that gets sent, in fact, is that saving money is not at all rewarded, that being a careful steward is punished. So you often see a big rush of unnecessary spending at the end of a budgetary cycle just to ensure that a line item gets brought to zero in order to avoid a permanent adjustment downward in that line item.
So if you want managers of departmental and divisional budgets to be good stewards of those funds, you have to assure them that everyone is being a good steward (or else) and you have to reward rather than punish units which manage to come in under budget for the year. Otherwise, the first person to cross the finish line in the savings race is just the first-prize chump.
In both cases, the first requirement for encouraging good decentralized management of budgets is information and transparency, down to a fairly fine-grained level of expenditure. It’s worth the squirming that this kind of transparency is likely to produce, at least if an institution is serious about producing distributed rather than centralized budgetary mindfulness, about making everyone feel responsibility for analyzing cost and benefit.