>It strikes me as odd, though, that the ruling class would be
>blowing off its most disciplined intellectual-worker class
>at a time when intellectual goods and services are becoming
>more and more important. Or is that merely an appearance?
What's happening is the corporatization of higher education & *class polarization* of "academics" under it. A tiny but significant segment of intellectuals in academia have been doing extraordinarily well -- remember the class (A) professors that I mentioned: "(A) star professors who earn -- even excluding benefits such as health care, pensions, etc. -- ten to X times more than term-employed adjuncts a year, do "consulting" on the side (which may pay more than their academic jobs), and/or have parleyed their research into *businesses*."
***** The Chronicle of Higher Education March 3, 2000 SECTION: THE FACULTY; Pg. A16 HEADLINE: They May Not Wear Armani to Class, but Some Professors Are Filthy Rich BYLINE: ROBIN WILSON
In academe, where the average faculty salary is about $ 56,000 a year, Eric Brewer, who is just 33, claims a net worth of $ 800-million.
Mr. Brewer -- who earned tenure in computer science at the University of California at Berkeley in July -- landed on Fortune magazine's list of the 40 richest Americans under 40 in October. His transformation from successful professor to academic multimillionaire began in June 1998, when a high-tech company he founded, Inktomi Corporation, first offered its stock to the public.
He is not the only scholar to strike it rich in the Internet gold rush. At least a few dozen professors in computer science and related high-tech fields, mainly at elite research institutions, have entered the highest income brackets. "It's hard to imagine any computer-science professor at a top school who's on the cutting edge of research who hasn't received overtures from venture capitalists," says Jay R. Ritter, a professor of finance at the University of Florida who tracks technology companies' first-time stock offerings.
Oddly enough, most of the newly rich professors appear to be holding onto their day jobs.
F. Thomson Leighton, a mathematics professor at the Massachusetts Institute of Technology, is one of the latest academics to turn his research feats into a fortune. The professor's earnings have soared to more than $ 2-billion -- at least on paper -- since his venture, Akamai Technologies, went public last October. Using algorithms to solve complex mathematical problems, Akamai (pronounced AH-kuh-my, which means "clever" in Hawaiian) is developing a way to relieve congestion on the Internet. The company's stock was initially offered to the public for $ 26 a share last October and closed the first day at $ 145.19 a share, one of the biggest single-day run-ups in history.
At Stanford University, a third of the 45 professors in the computer-science department are millionaires, estimates the chairman, Jean-Claude Latombe. Ten of the department's professors are on leave this year -- about 50 percent more than usual -- and several of them are trying their hand at running new dot-coms.
Even Stanford's provost, John Hennessy, is among those who have cashed in on the technology boom. He's what is known in high-tech circles as "post-economic," having done so well with a company he founded, MIPS Computer Systems (now called MIPS Technologies), that he can afford to never work again. Mr. Hennessy won't reveal his precise net worth but says, "I could get away with being on a few boards and doing nothing else." Instead, he's helping to run Stanford. "If you have enough financial independence, then you can do what you really love and not worry that you're missing the next dot-com," says Mr. Hennessy, who was a computer-science professor before he was named provost.
Many academics who hit the Internet jackpot never even seriously consider quitting their university jobs. For starters, much of their wealth could disappear in an instant if their stocks take a nose dive. Some of them made money by selling their companies to bigger ones, and have cash to show for it. But most have earned their fortunes through an I.P.O. -- the initial public offering of company stock to the public.
Because they're involved in private ventures, these faculty members take more time off from teaching than does the average faculty member. But most still report to their academic offices, teach courses, work in their research labs, and counsel graduate students.
They don't flaunt their financial portfolios, either, at least not on the campus. Sure, they are more likely to be driving a Lexus than a Ford Escort. And many have purchased huge multimillion-dollar homes in Silicon Valley, the most expensive housing market in the nation....
For the most part, rich professors are shy about broadcasting their net worth. Most of those interviewed refused to provide The Chronicle with details, and the Securities and Exchange Commission provides data only on those who are currently officers of a company or who own more than 5 percent of its stock.
Some rich professors were leery of speaking even in general terms about their wealth. They worried that they or their families might become targets of crime, or that they might be opening the door to solicitors....
Mr. [Mendel] Rosenblum, now on leave from his post as associate professor of computer science at Stanford, is the chief scientist at VMware, which builds software that allows a personal computer to run several different operating systems at once. Even if his company strikes it rich, says Mr. Rosenblum, he plans to return to the campus. "I do things I think are fun," says Mr. Rosenblum, who earned tenure last year, "and the fact that I find teaching and doing research fun wouldn't change if I had $ 100-million."
What might change, however, is the amount of time he may be able to devote to teaching. Professors who have already made the jump to millionaire status admit their business ventures often encroach on their academic duties. Even if they are able to teach a regular course load, their office hours on campus get eaten up with company business, and they often lack the time to help a student who needs special attention.
"It's very hard to do a good job inside the university and outside the university at the same time," says Michael A. Harrison, a professor emeritus of computer science at Berkeley. His multimedia-software company, Gain Technology, was purchased in 1992 by Sybase, making him a very rich man, although he declined to say how rich. "If you work only at the university, you are thinking about what you have to do to get ready for class. If you also work at a company, you're wondering, When am I going to get the product done? And if I'm late, are we going to run out of money?"
Some academics have gotten sufficiently swept up by Internet mania that they've jumped ship permanently.
In 1996, Adam Beguelin took a two-year leave from his job as an assistant professor of computer science at Carnegie Mellon University -- and never returned. Although C.M.U. persuaded him to retain the title of adjunct professor -- just in case he ever wants another job -- he doesn't expect that to happen. He is a full-time senior scientist at Inktomi, where his stock profits have paid off handsomely. He says the company offers more immediate and concrete rewards than academe.
"At the university, my ideas had a limited audience, and the only validation I got was getting a paper published," he says. "Now, I know what I'm doing must be good, because people are paying millions of dollars for it." Inktomi powers the search engines behind America Online, Yahoo, and Microsoft, among others....
...Some professors grumble that money is buying influence on some campuses. Business and medical-school professors have always earned top dollar.
But the wealth being accumulated by computer scientists now is unparalleled. "The gap between the kind of opportunity available to one cohort in the academy and not available to the other is widening," says David M. Kennedy, a history professor at Stanford.
Faculty members in the arts and humanities who are involved in outside ventures typically bring in only a small fraction of the financial rewards reaped by high-tech entrepreneurs. A professor who publishes a successful history textbook might double his university salary each year, for a total of $ 200,000 annually, says Mr. Kennedy. He is a co-author of The American Pageant: a History of the Republic, a popular college textbook.
As more faculty members become involved with the Internet economy, conflicts arise. For one thing, with so many faculty members on leave to found start-ups, staffing courses can be a nightmare.
"Either you give some flexibility to your faculty and you have a good chance of keeping them, or you don't, and you have a good chance of losing them," says Mr. Latombe, Stanford's chairman of computer science. So far, the department has filled in for professors on leave by asking others to teach more or by hiring temporary lecturers. Still, Mr. Latombe says: "I hope this entrepreneurship is not going to increase further. You always wonder: Who is going to be here next year, and how will we staff all of those courses?" *****
Yoshie