NOT ONE OF US

Justin Marozzi on a rum appointment

to the Thatcher chair of enterprise studies at Cambridge

WHICHEVER way you look at it, it's an odd way to drop £2 million. If you're a bil- lionaire philanthropist, of course, it's small change, hardly worth mentioning. But for Lady Thatcher — scourge of the public sector and a person of more modest means — to invest this whopping sum in the gen- erally unsympathetic world of British academe seems both enormously generous and a little weird.

What made the former prime minister part with so much of her hard-earned cash to endow the Margaret Thatcher chair of enterprise studies at Cambridge University? After all, even though she charges a healthy whack of $50,000 plus expenses per speaking engagement, that's an awful lot of speeches.

You might expect Lady Thatcher to have been eager to instal someone she regarded as 'one of us' in the chair. A robust, high-profile figure; someone who had already made his millions, perhaps, and was ready to do battle with the vesti- gial forces of socialism, propagating the Thatcher gospel of free markets and enter- prise around the world. Wets, Europhiles and lefties need not apply.

Apparently not. The Margaret Thatcher Foundation took a more enlightened view. `When we were endowing the chair we didn't see it as a Thatcherite chair,' says her spokesman. 'It was broader than that. We want to see enterprise in all political outlooks, but also in people with no politi- cal outlook at all, and that's what we hope this endowment will do. What we want to study is enterprise and the enterprise economy, and that's something that has been taken on by New Labour and people of all political persuasions. If we had installed someone who was seen as purely Thatcherite, you might have seen a reac- tion against it.'

Any fears of a backlash against a slash- and-burn free-market economist must have been dispelled, then, by the university's selection of Professor Alan Hughes, who took up the chair last October. 'The irony of the appointment is that Alan Hughes was a Labour voter,' says one Cambridge economist. 'It seemed rather an odd choice.'

Not that odd, maybe. As director of the Cambridge-based ESRC Centre for Busi- ness Research, Professor Hughes presides over a research budget of £750,000 and is widely published. That would make him an attractive proposition to most cash-starved departments in British academe, whatever his politics or his economics. What does Professor Hughes make of his appointment? First of all, is he a Thatcherite? He becomes a little bristly. regard my politics as an entirely private affair in relation to my academic research,' he says. 'My politics has nothing to do with the way I conduct my academic research. Other Tory leaders have endowed chairs at Cambridge. There's the Balfour chair of genetics. Maybe you should call him and ask him if he's a Balfourist.' Fair enough. Professor Hughes's politics are his busi- ness. In any case, private benefactors know when they endow a chair at Cambridge that the university does not allow them to attach any strings, such as ensuring that the incumbent is, in the benefactor's view, ide- ologically kosher.

But is it fair to assume, given the job title, that he's a free-market economist? Surely he'll be happy to state his position there. He won't. 'I'm an applied business and management economist,' is all he'll say. OK, what about his take on other aspects of the Thatcherite creed? Does he believe in society? Is greed good? Is he a capitalist? 'There are more important ques- tions to answer,' he replies.

Critics say Professor Hughes's work is spectacularly dull at best, and impenetra- ble, equation-ridden gobbledegook at worst. 'He's not even a particularly distin- guished economist,' says one former faculty member at the Judge Institute of Manage- ment Studies, where the chair is based. `The question is how do such people get chairs at Cambridge? You'd expect them to be the brightest stars in the intellectual fir- mament, not also-rans.'

Certainly, Professor Hughes's titles aren't that racy. It's difficult to imagine losing much sleep over works such as Enterprise and Community: New Directions in Corpo- rate Governance or 'Investment Finance, Industrial Strategy and Economic Recov- ery', his contribution to Rethinking Socialist Economies: A New Strategy for Britain. But it would be unfair to dismiss Professor Hughes on these grounds. Whether his research is unfathomable, however, is another, more serious matter. For the lay- man without a background in economics, it looks pretty baffling. Try this passage from Finance and the Small Finn, co-written with Andy Cosh:

In terms of the agency models of firm orga- nization the existence of tightly held compa- nies, and the large numbers of proprietorships and small partnerships rep- resent an optimal trade off between the gains of low agency, monitoring and bonding costs (ownership and management are fused, with owners being the residual claimants on the outcome of their own self-monitored efforts); and the losses of restricting invest- ments, and the scale of activity, to the limits imposed by the human and financial capital of the owner-managers, and by self-financing through retentions.

Eek. What's your budding entrepreneur or local chamber of commerce supposed to make of that? Is this the sort of stuff that Lady Thatcher is paying for? Professor Hughes won't have any of this. 'Perhaps it's fair to say, and relevant to ask the question, that if my work is so impene- trable, then why have so many people con- sulted me?' he says. 'Why don't you ask the Treasury, the Bank of England, the UN, the World Bank, the International Labour Organisation and the Department for Edu- cation and Employment, all of which I've worked for during both Conservative and Labour governments. It's just preposterous.' Whatever one's views of academics, it would be difficult to find a CV with more blue-chip consultancy experience. You name it, Professor Hughes has advised it, from the DTI and the British Bankers' As sociation (on the small-business initia- tive), to the Institute for Fiscal Studies, the Office of Fair Trading, and Eurostat (on measurement and analysis of innovation in micro-enterprises). He has lectured and given conference papers all over the world, presenting on subjects as diverse as entrepreneurship and high-tech firms, con- ceptualising and measuring service innova- tion and executive pay, executive dismissals and company performance. He has even found time during a heavy pub- lishing schedule to present a contribution on the financing of ethnic-minority firms at the Bank of England's workshop on eth- nic-minority finance. None of this cuts much ice with John tilundell, director of the market-oriented Institute of Economic Affairs. He has a Particular beef about privately endowed chairs, and wrote to Lady Thatcher in 1997 warning her off funding the chair for enterprise studies. It sounds a nice idea, he e says, but more often than not left-lean- :rig British universities tend, sooner or later, to take the chairs over and pursue their own agendas. fl1 knew this was a very bad, deeply awedstrategy from the start,' he says. s often undertaken by people frustrated by academe, successful business people who've made their pile and think they'll buy a chair. They might secure the first appointment, but in time they lose interest or die and the chair becomes prime terri- tory to be captured by the academic estab- lishment.' Lady Thatcher would have done far better not to have pursued this 'high- risk, doomed-to-failure strategy', he argues. 'There are ways of combing British universities for the best and the brightest at comparatively little cost and exposing them to your ideas. That way, you retain total control. With a chair, once it goes off the rails, you can't get your money back.'

Academics are not generally noted for their love of either enterprise or markets. `The appointment sounds entirely par for the course,' says a senior economist. `There's a socialist republic of Cambridge attitude towards university chairs. I rather predicted they'd give it to a low-profile fig- ure who was pursuing a research pro- gramme that appealed to the objectives of the university, i.e. generating lots of research-funding. Obviously, that's not the same as the agenda that might be wanted by the private benefactor, in this case the proselytising of free-market ideas, enter- prise and so forth. Whoever satisfied the university's criteria would not necessarily be in favour of free enterprise.'

One possible explanation for Lady Thatcher's generosity, which is given great currency in the intensely gossipy, backbit- ing world of academe, is that the donation to Cambridge stems from her vendetta against Oxford, her Alma Mater, which snubbed her by not giving her an honorary doctorate, the only living British prime minister to be so poorly treated. First it was the Thatcher archives, whisked off to Churchill College, Cambridge, then the two million quid to fund the chair of enter- prise studies.

Let us hope it is money well spent. The chances are, however, that unless there are radical changes in the way British uni- versities are funded, the Cambridge aca- `Come in for a chat, I'm a Jehovah's Witness.' demic establishment will in the long run prove just as hostile as Oxford to Lady Thatcher's ideas. There is no reason why they shouldn't. Protected from the reali- ties of the market, Cambridge, like every other university in the country (Bucking- ham is the sole exception), has neither the incentive nor the financial ability to slow its lamentable slide down the inter- national table of centres of academic excellence.

Lady Thatcher is doing her best to incul- cate a more market-friendly ethos in British academe. The Cambridge chair of enterprise studies may — although it is doubtful — go some way towards achiev- ing that. But the real answer would have to be much bolder. It is no longer taboo to discuss the privatisation of the NHS. Sure- ly, then, it is time to have a look at the cosy world of British universities. It is a great shame that Lady Thatcher did not have time to privatise them.

Justin Marozzi is contributing editor of The Spectator.