A pluralist escape from Faust

Oxford is to vote again on a business school part-funded by Wafic Said. Valentine Cunningham is against, John Kay for

I am glad the opponents of Oxford University's business school have shifted their attention from the defence of cricket to the defence of academic freedom. I do not know much about cricket but I think I know something about academic freedom.

My first lesson came soon after I joined the Institute for Fiscal Studies. An oil company - a substantial sponsor - rang to say it would be helpful if we did not publish a planned article on North Sea oil taxation. I drafted a letter bristling with indignation. Dick Taverne, then chairman of the institute, gave me wise advice: ignore the phone call and put my letter in the bin. The company would probably not renew its support, but if that happened the roof would not fall in. All that my letter would achieve would be to make that result certain. We published the article. The company continued its sponsorship.

What I learned then was that intellectual integrity is not based on displays of righteous indignation. The only sure defence is pluralism; the security that comes from not being dependent on any single line of accountability, any single source of finance. With such pluralism, independence is a matter of your own courage and integrity; without it, independence is a chimera. Righteous indignation is easier, however, which may be why there is such a lot of it about.

People constantly tried to interfere with the work of IFS. Lobby groups wanted research that supported them. Politicians and civil servants tried to exert pressure. Some companies believed that the libel laws prohibit you from saying anything with which they disagree. The degree of pressure became a measure of success.

And IFS was successful; indeed it has now become a byword for tackling controversial political and commercial issues with ferocious integrity. Of its performance in the last election, The Economist said, "Iits blessing was so valuable that at times each of the main parties falsely claimed to have its support''. I have a scrapbook of such cuttings.

IFS did not achieve that result by insisting that money could only be given without strings. Nor could Oxford have come into being that way. It would have turned away John Balliol and Dorothy Wadham, and spurned Cecil Rhodes for the absurd racist and sexist views attached to his bequest. I have not come across anyone who gives money without strings even if the strings are implicit rather than explicit. There really is no such thing as a free lunch.

The first question is whether the sponsor's objectives are consonant with your own. Not identical but consistent. John Balliol wanted, and got, immortality, and there was benefit not loss to Oxford in giving him what he sought. You can sometimes trick donors into paying for things they do not want, but it is rarely wise. When Lord Nuffield proposed an Oxford business school, the silken-tongued A. D. Lindsay persuaded him that a social science college was the same thing. Lord Nuffield noticed it was not, and there were many unhappy years before Oxford's largest previous benefactor was reconciled to his creation.

Wafic Said comes out pretty well by this criterion. What he wants is a building, and an institution, of international distinction. When he attaches strings to his benefaction it is because he is not certain that Oxford is as firmly committed to that aim as he is, and given both old and recent history it needs a firm positive vote on June 17 to provide evidence that he is wrong.

But the key element in the defence of academic freedom is pluralism. He who pays the piper will always seek to influence the tune. And there is little comfort in a contract that says you can nevertheless play what tune you like; one day, you will need a new contract. Orchestras can choose their own repertoire because they derive their revenues from a wide audience with a catholic range of tastes.

British universities forgot the need for pluralism. They made their deal with Mephistopheles at the time of the Robbins Report, and are now paying for it with their soul. For a time, the money flowed. Careful constitutional mechanisms and direct Treasury funding were created to guarantee independence. Only the naive could have believed that this would last. And only the very naive could believe that this generous and unconditional funding will come again.

And so the only donors who have ever sat at the back of one of my lectures were assessors from the Higher Education Funding Council. I did not mind. How could I deny someone the right to see what they pay for? But my independence requires that I have the chance to reject their opinions and funding, and to ask other people to back me.

Sadly, business schools are the only substantial part of higher education which have that choice. They are almost unique in deriving most of their income from their students rather than from the Government. There is a more powerful motive for opposing Oxford's business school than the preposterous argument that it represents an attack on the academic integrity of the university. It is resentment that the business school, which will depend for its income neither on the state nor Mr Said, will have a degree of freedom that others no longer enjoy.

John Kay, newly appointed director of the School of Management Studies at Oxford University, was director of the Institute for Fiscal Studies.