Hey folks! Happy Valentine’s Day. Fireside this week and then hopefully next week we’ll start into our look at the Siege of Eregion in Season 2 of Rings of Power and also the larger Tolkien legendarium. I confess, watching the show, my suspension of disbelief fell much faster than the city did. But in the meantime, for this week I wanted to talk a little bit about the structure of grant funding in the United States and how that funding fits into university finances and research more broadly.
Left and Center are Ollie, Right is Percy.
Of course the reason I am talking about this is that the NIH, NSF and other grant-making federal agencies are in the news lately. As you may be aware, on January 27th, the Office of Management and Budget, acting under the auspices of an executive order from President Trump, froze all federal grant funding; that memo was blocked by a court, so the OMB rescinded the memo, but kept the freeze in place, an action which was also blocked by the courts. Despite the court orders, quite a lot of grant funding still seems to remain frozen (though some is moving) and I’ve continued to hear from academic colleagues in other disciplines over the past week of programs still unable to access their funding. For reasons we’ll get to in a minute, unstable or interrupted funding can be quite bad even if funding is, in some notional sense, eventually to be resumed.
First, let’s specify the major grant-making institutions for academic research. They are (in order of size):
- National Institutes of Health (NIH); medical and health research
- National Science Foundation (NSF); non-medical science research
- National Endowment for the Arts (NEA); arts (both fine and performing)
- National Endowment for the Humanities (NEH); humanities research
And I want to start by being clear about the relative size of these entities, because whenever anyone talks about funding in the university space there’s always an assumption that the money being cut is either going to rock climbing walls (we’ll come back to this) or someone’s idea of the most niche indefensible course ever (‘woke basket weaving’), which folks generally understand to live in the humanities or in the arts.
The annual budget for the NIH, which covers funding for medical and health research to, you know, cure diseases and save lives, is $45bn, more than the other three major research grant-making institutions combined. The annual budget for the NSF is just shy of $10bn. Meanwhile the NEA’s budget is $207m, while the NEH’s budget is $200.6m. Which is to say the NEA and the NEH are each about 1/50th the size of the NSF and less than 1/200th the size of the NIH. Ironically, this means the ‘wokest’ academic fields are almost entirely insulated against federal funding cuts, because they never received a meaningful amount of federal funding in the first place. As Apuleius writes, “Do you not know, dummy, that ten wrestlers cannot strip a naked man?” (Apuleius Met. 1.15).
In graph form, that relative size looks like this:
And by the way, here is the graph if we include research allocations in the budget for defense:
When Uncle Sam funds research, he is extremely interested in weapons, very interested in medicine, somewhat interested in science and only accidentally interested in the arts and humanities. And of course, very little of the already very limited NEA or NEH funding is for ‘woke basket weaving,’ – a lot of it ends up funding pretty standard history research, or performing Shakespeare, and so on.
Now I should note, these institutions are not all structured the same. The NSF, NEH and NEA are primarily grant-making structures: their main job is to hand out research funds to other institutions (typically research programs at universities) to make research possible. The NIH does this too – at scale – but by contrast with the others, it also maintains its own very large and substantial internal training and research facilities. About half of the NIH’s funding is spent internally and about half of it externally, very roughly. Of course, that ‘extramural’ grant funding, around $26bn, still utterly dwarfs all three of the other grant institutions combined. Uncle Sam is very interested in medicine, for what I hope are fairly obvious public health reasons and medical research is very expensive because it requires massive clinical trials to make sure any new medicine or treatment is safe before it is made available to the public.
But I want to focus in on the grant funding here that is heading towards universities. To be clear, these federal grants don’t go out to every project or just any project. In most fields, federal grants (NIH, NSF, NEH, NEA, etc.) are the most competitive and thus most prestigious, meaning that Uncle Sam can pick and choose which research proposals or programs to fund and basically has his pick of the litter. Indeed, seeking and getting one of these grants is generally a project unto itself, with multiple stages of selection and approval, all of which require producing grant proposals and so on. These grants are not handed out like candy; there is a long approval process.
Once awarded, grant money is almost always channeled through an institution – generally a university; it isn’t just handed to a researcher. That funding stream is split typically into two parts: part of the money goes to the lead researcher (the ‘Principle Investigator’ or PI) and part of it goes to the university. The university chunk is termed ‘overhead,’ and the idea here is pretty simple: while the PI might pay for some specialist equipment, personnel and so on, there’s a whole lot that they don’t pay for. You aren’t building a new building for each grant, for instance, nor hiring all new staff, facilities or faculty. Likewise, the university already has a lot of the research equipment and spends money to maintain and update it. In all grants from all sources, the average overhead rate is typically 20-30%, but my understanding is that Congress actually stipulated an overhead rate for most federal grants at 50%, a result of the time the last Trump administration tried to sharply limit overhead rates. This distinction has become relevant recently with efforts to fix the overhead rate at 15%, well below the normal value, even for non-federal grants. It is certainly the case that some universities – infamously, many of them very well funded elite privates – negotiate absurd overhead rates well in excess of 50%, but 15% is too low for basically everyone. The point here is, the overhead rate is not simply graft: it is paying for something, namely for the facilities the university is bringing to the table to make the project happen. Without that overhead allowance, taking on a grant might become a significant net expense for a university, which given most university’s limited financial resources, would be a real problem.
The rest of the money comes under the control of the PI, but of course all uses of that money have to be justified and grant funding doesn’t usually arrive in one huge mass of funds, but is accessed over the life of the project. Now on my end, for something like an NEH project, the funding amount is often very small and the thing it is paying for is basically just the PI’s time and perhaps some travel (to archives, museum collections, etc). For big NIH or NSF projects (or larger NEH/NEA ones), of course the money may also go into hiring a lot of researchers. Indeed, in the STEM fields, it is standard that new PhDs spend a few years working this way as post-docs, supporting the research being done by the more senior tenure-track faculty PIs. Naturally, highly trained PhD researchers, even as post-docs, need to be paid so they can, you know, eat and make rent. But the result is STEM grants have to be much bigger: you’re not just making up a portion of one academic’s salary, but rather paying to staff an entire lab (and potentially fill it with expensive equipment and supplies) in order to run much larger scientific studies.
Science is really, really expensive.
All of which now brings us to some of the potential consequences of disrupting this ecosystem. Even just substantial delays or uncertainty in this system entails real costs. A lot of the folks working on these grant-funded research projects, the reserve army of post-docs, are not otherwise employed by the university: the university has hired them with the grant money. If the grant money stops or is disrupted, they don’t get paid because unlike permanent faculty, their salaries aren’t tied to department funds. Worse yet, at many universities, if you have someone whose funding line is dry for long enough, policies require them to be let go; you can’t simply keep a post-doc on the books for a couple of months waiting for the money to come back. Of course these are also frequently early career researchers, relatively fresh out of a PhD program, so they are also unlikely to have the financial resources to just ‘stick it out’ for weeks or months. This is why you saw a lot of scientists panic instantly over grant freezes even if they weren’t made permanent: a month-long ‘figure out what we’re doing’ freeze would still kill a huge proportion of research projects.
And to be clear, when we talk about letting research wither on the vine – because it is clear there is still a desire in the executive branch to cancel some of these ongoing grants – if you pay for 75% of a research project, you don’t get 75% of a result. Generally, you get 0% of a result. Cutting this sort of funding midstream means wasting the funds already spent for many of these projects, because they never come to completion to get you the desired output, but you already spent a bunch of the money (and you had a whole bunch of specialist researchers already spend a whole bunch of time).
The potential that some programs may be cut also creates significant problems. Proper academic research in almost any field – humanities, hard sciences, social sciences, etc – generally takes quite a lot of time to do well. It takes time to pull together research personnel, to get facilities together, to actually do the project; all of this can take years and so a lot of these grants are stretched over considerable amounts of time. For that to work, there has to be some confidence that a change in President or a change in Congress isn’t going to lead to already running programs to be cancelled, because, again: that means everyone just wasted months or years of time and all of the non-permanent staff and faculty find themselves suddenly unemployed. Often, by the way, those are researchers who have moved cross-country to take up these positions.
Now again, for the humanities, the impact of all of this is somewhat muted because NEH funding is so much smaller and so we generally have fewer things riding on it. But for many STEM fields, the disruption of the funding ecosystem – not even shutting it down, just creating a whole lot of uncertainty – threatens an entire part of the researcher-scientist lifecycle. Because the expectation in those fields is that after the PhD, researchers spend time as post-docs in labs run by professors who are hiring those post-docs with grant funds. Indeed, even before this, what is funding many of those early-career researcher-scientists in graduate school is likewise research assistant or lab assistant positions which are also sustained, at least partially, by grant funds. If a bunch of those programs are just cancelled every time the balance of Congress or the party in the White House shifts, you’re going to create 4- and 8- year cycle mass extinction events among scientific researchers, which hardly seems good for, you know, science.
Finally, there is the impact to universities themselves, and explaining this requires a quick potted history of the last 70 or so years of university finance. Now, when proponents of research cuts talk about how these cuts hit universities, they like to focus on the Harvards and Columbia’s – elite private research universities with massive financial endowments, to make the case that these universities can just ‘handle it.’ But most research doesn’t happen at these elite private institutions. There are, optimistically, a few dozen elite private institutions with that kind of financial backing in the United States and they tend to be, compared to other research universities, actually rather small. The entire Ivy League is just 8 schools with a combined academic staff of just 23,404. By contrast, the University System of Ohio alone has 34,000 academic staff; the Cal-State system 27,000; the UC system, 25,000; the UNC system, 13,000.
In short, the vast majority of academic research – sciences, humanities, all of it – does not happen at elite private institutions with huge endowments but rather in large state publics, which make up the overwhelming majority of R1 and R2 (the top tiers of research university) institutions. These universities, almost without exception, do not have the sort of infinite endowments or the ability to charge arbitrarily high tuition that the Ivies have: they are working on a budget.
The structure of that budget has changed over time. Initially, the idea with most of these large public institutions was that state governments would foot most of the bill for teaching and research, leading to the low tuition you always hear your parents and grandparents talk about. Beginning in earnest in the 1980s, the combination of stagnant state funding, rising college attendance rates and Baumol’s Cost Disease – the effect where, when an economy grows more productive, the things which cannot see large gains in productivity (a teacher can only teach so many students, a doctor can only see one patient at a time) become more expensive compared to everything else – lead to a break in that system. Rather than pay for this expansion of higher education and its rising costs with state funds, we opted to let tuition balloon upwards and foot the bill with student loans, with that debt eco-system made stable through federal money and bankruptcy laws that treat student loans differently from other forms of unsecured debt, which are extremely favorable to lenders and unfavorable to former students.
When the 2008 financial crisis hit, states cut back substantially on what state funding remained, but the gap wasn’t replaced entirely with tuition and more loans. Instead, a big part of the gap has increasingly been made up for with grant funding. That comes in two directions: student grants, like the Pell Grants ($7.3bn annually) which folks understand as a loan-free way for Uncle Sam to help you pay tuition but in practice is a way for Uncle Sam to pay universities to teach more students (since it allows a higher average tuition) and the research grants noted above at around $35bn and change. Combined with the insane leap in tuition (itself supported by loans), that has enabled public universities to survive despite the increasingly meager actual state-rather-than-federal funding. Now, to be fair, university mismanagement here has played a significant role too; the strategy of bringing in professional managers (the ‘business model’ of education) has been a disaster as those managers have engaged in endless unsustainable empire building and competitive student amenities.
But, and I want to stress this, research grant funding doesn’t go to student amenities or administrative vanity projects, generally. Quite a lot of that funding, after all, goes into the hands of the PI, not the university – and a lot of the ‘overhead’ (again, generally 20-30% of total awarded funds) is, in fact, legitimately overhead for the use of buildings and facilities. If you want to get serious about cutting costs within universities, I have some suggestions (beginning with a return to faculty governance, which showed itself to be quite a bit more frugal in the period before the 1990s than the modern ‘business’ model of university governance), but a blanket reaping of all federal research grants, with no matching provision of state-funds to make up the difference is not it.
We’ll see how this policy position evolves, but as stated now, the main results of the substantial uncertainty it creates along with cancelled, half-finished research projects is likely to be both rising tuition and falling research output, causing the average taxpayer to pay quite a lot more to get quite a lot less. If the uncertainty continues long-term, many of those expensive, highly trained and difficult to replace researchers are going to seek out positions in more stable countries and take the results of their research elsewhere.
On to recommendations!
The latest Pasts Imperfect newsletter including a fascinating discussion by Monica H. Green on how genetic studies are beginning to help us understand ancient sickness and trace the development of modern diseases. I think the point here is well made that we’re just at the beginning of learning what these new methods can tell us about the past and as a result, there’s going to be a lot of rapid shifting of what we ‘know’ and don’t know. Nevertheless, these new tools and methods are just astounding in letting us fill in some of the blank spaces in our knowledge of the past.
Meanwhile over at Peopling the Past, they have a good interview with Dr. Cara Tremain discussing the trade in – often illegal – antiquities, often the result of the looting of archaeological sites. While Dr. Tremain is mostly focused on Maya artifacts, the antiquities black market and looting are also a huge problem for the study of Greek and Roman antiquities as well. The fact of the matter is that while much of the looting happens in developing countries, the buyers for those illegal, looted black market antiquities are almost invariably in wealthy, developed countries and almost-certainly-illegal antiquities are frequently laundered into or through museum collections, even at well-known and prestigious museums. This is something of a separate, if related, issue to objects taken by imperial powers pre-1970, which are legal for them to have, if not ethical for them to have. Not only does looting often rob developing countries of their heritage objects, it also greatly damages our ability to learn from them, as looted objects are effectively stripped of their context and provenance (the chain of ownership from excavation to display), with the latter often being intentionally concealed by collectors or museums because honestly in provenance would be admission of a crime.
Meanwhile, in modern military news, folks looking for an update on the current state of the conflict in Ukraine would probably be best served by listening to Michael Kofman’s two-part update over at War on the Rocks as part of “The Russia Contingency,” which is, alas, behind the paywall. However, Michael has also done a shorter discussion of the situation outside the paywall with Ryan Evans in addition to a longer talk over on YouTube with the Decoding Geopolitics Podcast. Unsurprisingly, he gives a similar take in all three venues at greater or lesser length, which is I think valuable for its effort to present a neither excessively optimistic or pessimistic view: the Russians (and Ukrainians) are both neither four feet tall nor twelve feet tall.
Nevertheless, understanding the current situation is valuable, especially given as the United States’ position appears to be rapidly changing, with the new Secretary of Defense (foolishly) taking preserving Ukraine’s pre-war borders or having Ukraine joint NATO off of the bargaining table before even opening negotiations with Russia. It is likely that difficult but very consequential decisions are coming for both Ukraine and Europe more broadly, forced by this sudden shift in American political priorities and competence.
For this week’s book recommendation, I’m going to step a little outside of my usual bailiwick and recommend D. Gambetta, Codes of the Underworld: How Criminals Communicate (2009). This is one of those books that it pretty neatly summed up by its descriptive title: Gambetta sets out here to describe how professional criminals communicate to each other, not just through linguistic communication (that is, words), but also posture and actions (symbolic communication). The approach is almost anthropological in its nature (Gambetta is a sociologist) in that it makes deep and rich observations about forms and patterns of communication. While much of the focus is on the Sicilian/Italian mafia – where Gambetta has his deepest expertise – he draws widely on criminal communication in other contexts as well and his goal is to illustrate general patterns rather than specific usages (though the latter come out in the effort to illuminate the former).
Now of course there is a lot here if you want to understand the primary subject matter of how criminals communicate, but I think Gambetta’s work is valuable even more broadly as a tool to think about communication and social signalling generally. The subject of criminal communication is actually really useful, because criminal communication, by its nature, aims to be illegible to outsiders (particularly the law), but to signal clearly to insiders (other criminals) and that means that, while on the one hand it is a system with rules and functions, it requires explanation. That takes the familiar – how do you greet someone? how do you signal deference and why? that sort of thing – and makes it unfamiliar, which in turn has pushed me – and may push any reader – to think more deeply about other forms of communication that are more familiar.
Of particular note here is Gambetta’s use of the concept of ‘costly signals’ – actions which are designed to be, in a way, irrationally ‘expensive.’ A cheap signal, after all, can be faked by an outsider, but only a true insider is likely to be willing to give a costly signal; as Gambetta puts it, “a convincing signal of a criminal type is that which only a true criminal can afford to produce and to send.” Performing a serious crime or doing prison time work as costly signals because a non-criminal (like an undercover cop) is unlikely to be willing to perform them, precisely because they are, in a sense, so expensive. Of course we do the same sort of thing with all sorts of other costly signals, when you think about it: gift giving is less efficient than just giving money, but we do it precisely because it is irrationally expensive and in so doing signals genuine attachment. In my own work, I’ve used this sort of framework to think about the signalling inherent in Roman patronage relationships as well as in the macro-scale quasi-patronage relationship between Rome and its Italian allies. Rome’s actions in the third century, especially, can be understood in many ways as ‘costly signals’ of Roman fides. In short then, this is one of those books that is really ‘good to think with,’ even if you aren’t interested in the particulars of the logic behind prison fights or criminal nicknames.
That said, if you are interested in the logic behind prison fights or criminal nicknames, that too you will find here, in spades. Beyond simple scholarly value, anyone looking to write a convincing ‘rogue’s guild’ or fictional criminal fraternity could get quite a lot out of this book because Gambetta not only notes the habits of actual real-world criminal society, but also the reasons for those habits, the decision-making calculus that produces them. Inmates, for instance, look to signal their capacity for violence clearly, in order to avoid potentially costly violence, in part by accumulating what Gambetta terms ‘violence capital’ – history and reputation that signal their willingness to respond to provocation with violence. Thus on the one hand, young inmates are more likely to fight than older ones (which we might attribute to youthful exuberance, but equally, the young have accumulated less ‘violence capital,’ less reputation) and – perhaps counterintuitively – women inmates, despite being less likely to have ended up incarcerated for a violence crime, fight as much or more than male inmates, precisely because they are less likely to have a history of violence and need to establish a history in order to enforce their boundaries vis-à-vis other inmates.
So not only is this book a fascinating look into a modern criminal subculture, it is also a probing look at the way reputation and communication can work in a wider range of situations, from historical societies to fictional or fantasy ones.
