Johns Hopkins Magazine -- June 1999
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JUNE 1999

Money--not ideology--is at the heart of the international scene today. Just how much that should drive the curriculum at SAIS has become a matter of emotional debate.

P U B L I C    P O L I C Y    A N D    I N T E R N A T I O N A L

Is SAIS's Soul at Stake?
By Joanne P. Cavanaugh
Illustration by Marc Mongeau

Terri McBride, a second-year student at Hopkins's Nitze School of Advanced International Studies (SAIS) in Washington, D.C., would love to go into public policy--maybe a job in the State Department or a diplomatic post overseas. There's also the prospect of working as an international investment consultant.

The difference? About $100,000 a year.

"Right now I'm torn. And here is the paradox for SAIS," says McBride, president of SAIS's Student Government Association. "If I'm accepted at the State Department I would start at $35,000 a year. . . .If I work in consulting, I could earn up to $135,000."

It's spring term, and McBride is taking her oral exams at the State Department anyway. But her internal debate is shared by graduate students throughout international studies schools like SAIS. With the end of the Cold War, the crux of international relations--and the cache of available jobs--no longer pivots on the communism vs. capitalism dynamic. Capitalism won. So, increasingly, the international scene is about money.

The distinctly 1990s buzz in international affairs is filled with terms like "globalization," "market reform," and "the international financial architecture." Students at SAIS and its sister graduate schools at Columbia, Harvard, and The Fletcher School at Tufts University are learning how to bring Wall Street to the Third World. They're analyzing Latin American nations no longer as pawns in Cold War political maneuvering but instead as valuable trading partners; and they're starting to look at corporate corruption--rather than communism--as one of the biggest security threats to today's teetering democracies.

"Privatization was not even in our lexicon until 20 years ago. Now there's a great range of issues where business and government intersect," says Roger Leeds (SAIS MA '70, PhD '76), the recently hired director of SAIS's new Center for International Business and Public Policy.

"There's no question this is happening globally," says Steven Muller, Hopkins president emeritus and a SAIS distinguished lecturer. "There is a drive to take advantage of these new [global] opportunities. It's there in the crass sense that you can make big bucks, but that's not confined to SAIS, to Washington, or even the United States."

Over the past two decades, the number of SAIS graduates finding relatively high-paying jobs in the private sector has doubled. Of those students graduating in 1998, about 42 percent took private-sector positions--mostly in financial fields; by contrast, just 15 percent joined the U.S. or foreign government ranks last year. Compare that to 1975, when nearly 30 percent accepted government posts, a figure that remained constant until the mid-1990s.

That means a typical SAIS student who once focused on cramming for his or her foreign service or State Department exams is now debating whether to pick up an MBA or at least take more high finance courses along the way. All the available jobs seem to be at The World Bank, or in corporations with international interests.

This focus on money has alarmed some SAIS students and professors who worry that their school, long considered a West Point for future diplomats of the United States, is getting too focused on bottomline politics.

While SAIS still offers an extensive array of courses that focus on regional studies, foreign affairs, struggling democracies, national security, non-profit development, politics, language, history, culture, and so on, there have been some distinct changes at the school in the past few years:

"The more courses focus on commercial markets, the less they are looking at social, political, and cultural issues," says Heffern.
In the mid-1990s, SAIS added two economics course requirements to the four required before. In a two-year graduate course of study, there are now six economics courses that students must take unless they test out of two intro-level classes. Throughout the SAIS curriculum, especially in areas like Latin American studies, more courses now emphasize macroeconomics.

Two highly touted hires for new faculty positions are specialists in international and corporate finance: Leeds and Gordon Bodnar, an assistant professor of finance at the Wharton School of the University of Pennsylvania. And the short list for a vacant chair in Energy, Environment, Science, and Technology (EEST) includes five candidates, three of whom are economists.

The new business and public policy center that Leeds directs will be a focal point for international finance-oriented course work, as well as research on issues such as corporate corruption. The center also offers students a chance to tackle business-related case studies on public policy crises or opportunities in growing economies in China and elsewhere.

This past year, SAIS's Latin American Studies Program merged with the Center of Canadian Studies in large part because of the economic repercussions of the North American Free Trade Agreement (NAFTA). The new department is called the Western Hemisphere Program, and emphasizes study of the financial markets between these nations and the United States.

SAIS's Executive Education Program, which is geared toward corporate leaders looking for briefings and background on international issues, is expanding. A new office, now open in the Ronald Reagan Building and International Trade Center in Washington, D.C., joins other recent course offerings for business leaders.

Over the past year, two student-run forums titled "The Future of SAIS" have prompted emotional debates. Some students are lobbying with fervor for more finance-oriented courses. Others decry the idea, even coining a phrase for it: "The Wharton Temptation," referring to the famous business school.

"Indulging in the 'Wharton Temptation' will risk undermining the sense of social purpose that underlies this institution," then second-year student Daniel Ginsburg told the capacity crowd in SAIS's Kenney Auditorium in February 1998.

"Because it's a small school, if resources expand in one area, it inevitably takes resources from somewhere else," says Maureen Heffern, a second-year student in SAIS's Social Change and Development Program. "The more courses focus on commercial markets, the less they are looking at social, political, and cultural issues. There's a danger in going too much with the times."

Grace Goodell is professor and director of Social Change and Development, which trains students to work in non-profit local and regional development. Even her department has added offerings in microfinance--non-profit-funded loans to small- or medium-sized entrepreneurs. She, too, remains worried about some aspects of the school's focus on finance.

Says Goodell: "The soul of SAIS is really changing."

As theologians learned centuries ago, the transformation of a soul is a slippery thing to define.

"I think, like Mark Twain's death, the news has been greatly exaggerated," says I. William Zartman (MA '52), director of SAIS's Conflict Management and African Studies programs. "There's an awful lot done here the way it was done before in terms of international relations and domestic relations analyses."

"The soul of SAIS is really changing."
Grace Goodell,
Director of SAIS's Program of Social Change and Development

"I think, like Mark Twain's death, the news has been greatly exaggerated. There's an awful lot done here the way it was done before in international relations and domestic relations analyses."
William Zartman,
SAIS Professor of International Relations and Director of Conflict Management and African Studies programs

"MBAs do not have global vision and sensibility. International students have global awareness, but do not have the technical, analytical problem-solving skills. What we are trying to do is bridge the public private divide."
Roger Leeds,
Director of SAIS's Center for International Business and Public Policy
Weekly, in SAIS classrooms and auditoriums, scholarly debates, forums and speeches focus on the politics of raging world issues, such as the war in Kosovo. What about the feared Whartonization of SAIS? Zartman poses: "How much of it is image and how much of it is reality?"

Today's emphasis on finance is not new. Historically, SAIS has offered an economics concentration that has distinguished the graduate school from other international affairs schools like Georgetown University's, which is geared more toward the U.S. diplomatic corps.

In some ways, SAIS may actually be returning to its roots. School co-founder Paul H. Nitze brought his own business bent to the school when it was created in 1943. He had spent a decade working as an investment banker in New York City before launching a distingished career in government service (that later included years as an advisor to every president from Franklin D. Roosevelt to George Bush, with the exception of Jimmy Carter).

Nitze, along with then Congressman Christian A. Herter, founded the independent graduate school under the nonprofit Foreign Service Educational Foundation. In 1950, Hopkins absorbed the school, which needed the money and resources of an established institution. A 1952 fundraising pamphlet laid out the school's goals "(1) to form an international training center [for] young Americans [going into] world careers in government or business and (2) to promote mutual understanding between corporation executives and government officials in the foreign field."

Early on, the school also established a Corporate Training Program aimed at briefing businessmen on foreign relations and trade issues. In memos written in 1957 and 1958, some of the school's top donors included Gulf Oil Corp., Standard Oil Co., and Esso Standard.

Yet as the Cold War took hold at the end of World War II, the international environment had also begun to shift, chilling for a time the free-flowing international marketplace that Herter, Nitze, and other leaders had envisioned. As countries started aligning themselves with the East or West, the need for leaders in the field of diplomacy became urgent. Political analyses, regional studies, and public service became even more central to SAIS's mission. Long known as a politically conservative school (jokingly it also has been called a training camp for the CIA), the new Cold War politics meant an emphasis on policies focused on the containment of communism.

But the soul of capitalism has never been far away. In the 1960s, despite these and other political tensions, the international market did begin to develop. And SAIS has remained relevant partly because, as Nitze says, the school adapts to meet the "challenges of a changing world." As the political influence of money has grown, so has the economic undercurrent at SAIS intensified.

"We have been doing this in a gradual way over a long period of time," says SAIS's dean, Paul Wolfowitz. "Adding the more practical aspect of finance is not a revolutionary change, it's sort of evolutionary."

AT ROOM 212, CAREER SERVICES is stenciled in green on the door like the sign on a private eye's office. SAIS students wander into this small, blue-gray office in the Nitze building to investigate what their future might look like. Metal shelving holds gray binders with labels: reference job listings in Foreign Service, Human Rights, Journalism, Banking, as well as Current Job Listings for Department of Defense and United Nations.

Some students come dressed in shirt-and-tie ensembles, others in sweatshirts and jeans. There are hand-outs explaining the office's Internet job search engines, tips on networking, and strategies on how to negotiate compensation: "You must also consider your own particular financial obligations and needs." Fortune magazines litter the counter. From Day One of the two-year graduate course of study at SAIS, students increasingly are focused on the job market.

"We found in the last six to eight years that our students were not as competitive as they should be in terms of Wall Street. Not that all students should go to Wall Street, but more are going into the private sector."
Riordan Roett,
Director of SAIS's Western Hemisphere Program

"Students come to SAIS because they want to make an impact on the world. But then they realize halfway through, 'I have this huge amout of debt. I can't work for $33,000 a year.'"
Ronald Lambert,
SAIS's Director of Career Services

"I'd be very unhappy if I felt like people were giving up the idea of public service as a central part of SAIS. I hope SAIS doesn't ever acquire the ethos of a business school."
Paul Wolfowitz,
Dean of SAIS
The culture of SAIS is, in many ways, just getting in line with the New World Order.

Worldwide, the de-emphasis on ideology over the past decade has created a sort of political vacuum. Observes Zbigniew Brzezinski, former national security advisor to Carter and a professor of American foreign policy at SAIS: "Ideological fervor has gone down. Finance and economy have always been important; they are part of a continuum, but other issues have gone down in importance."

Subsequent government downsizing over the past decade--in the wake of the Cold War--has also meant fewer jobs in the public sector, says Ronald Lambert, who directs Career Services at SAIS. "Defense, intelligence, and foreign service were shrinking, [at the same time] companies were going international," Lambert says. "Businesses realized that profit margins weren't domestic, so they started looking for overseas growth. They started looking for people with knowledge of the international sector, with a high comfort level dealing with other cultures."

In response, business schools like Wharton are now taking competitive aim at the international schools, adding courses on global relations and public policy. For several years, SAIS has offered a joint master's degree program with Wharton.

Wolfowitz is eyeing the competition. "My impression is that the business schools put a slight international label on their traditional business curriculum," he says. "But they don't really have the expertise."

In many ways, the financial focus is gaining higher ground elsewhere at Hopkins: the School of Medicine now features courses in the business of medicine; the School of Engineering offers a minor in entrepreneurship; and the School of Continuing Studies is being renamed the Hopkins School of Professional Studies in Business and Education and is rolling out an MBA degree.

In this kind of environment, it's hardly surprising that some professors and students at SAIS are pushing for a greater emphasis on economics. Notes Riordan Roett, director of the Western Hemisphere Program: "We found in the last six to eight years that our students were not as competitive as they should be in terms of Wall Street. Not that all students should go to Wall Street, but more are going into the private sector. We don't want to become a business school, but we want to take a macroeconomic background and merge that with regional studies. Our students will be very competitive at a Goldman, Sachs."

"Seems to me that any institution like ours makes a grave error in living in the past," continues Roett. "To make that mistake would lose a very important pull for students who go elsewhere.

Leeds, of SAIS's new center for international business, says corporate recruiters are frustrated by the demarcation line between business and international studies: "MBAs do not have global vision and sensibility. International students have global awareness, but do not have the technical, analytical, or problem-solving skills. What we are trying to do is bridge the public-private divide."

Kris Hurley, in her second year at SAIS, worked six years in the business and government world--in a Wall Street consulting firm and on a joint congressional committee on budgetary issues-- before starting her graduate studies. She is getting an MA and MBA in the joint SAIS-Wharton program.

"The thing I like about SAIS," she says, "is that people are much more idealistic than average MBA students. If you ask students here what their career plans are, 90 percent of the time it's some version of 'I want to change the world.' They want to make a change through government, or foreign service, or an oil company."

Yet one concern about the new we-can-change-theworld-via-banking approach is that the understanding of global affairs might increasingly spin around short-term analyses: What is the potential market for telecommunications in China over the next two years? Not: What is the mindset of a nation that survived the Ming and other multi-century dynasties in terms of foreign relations today?

"I am a historian, so obviously this is not the kind of change I feel comfortable with," Piero Gleijeses, professor of American foreign policy, says of the business-oriented focus at SAIS and elsewhere. "We want to prepare people not only with a knowledge of political economy, but an understanding of foreign societies and history, and the history of foreign policy. That is the difference, in theory, between a banker and what we produce."

Says Gilbert Khadiagala (SAIS PhD '90), associate professor of African studies, "There is a concern at the level of admissions that if the school [becomes] this sort of quasi-business school you will attract the kinds of students who don't fit with the mission of the original school. The changes aren't bad, he says, "as long as we have students who come here interested in bigger issues than just making money."

Students like Denise Lofman, who spent last summer in the highlands of Vietnam. One of her goals: to understand the problems ethnic minority women face in order to help tailor non-profit food and health projects.

Lofman believes that even multinational corporations need workers with a strong awareness of community needs, something that might go missing in macroeconomics-oriented courses. "These people don't necessarily have a voice," she says of the female villagers she worked with in Vietnam and similar people in other places. "With a liberal arts background, you may feel responsible when you go into the workforce. There is still a sense of a liberal arts knowledge base in some departments at SAIS. I would hate to see that run over."


graduate students at SAIS and elsewhere feel they simply can't afford to be idealistic when it comes to choosing future employment.

Many students are still repaying undergraduate student loans when they begin at SAIS and face its $21,200 annual tuition. To pay for the master's program, they shoulder more loans. Says Career Services' Lambert, "Students have tens of thousands of dollars in education debt. [They] come to SAIS because they want to make an impact on the world. They don't come here to make money. But then they realize halfway through, 'I have this huge amount of debt. I can't work for $33,000 a year.'"

Largely to make themselves more marketable upon graduation, more SAIS students than ever are undertaking internships--not all of them paying. Lambert estimates that about half of the students pick up an internship during the academic year, and two-thirds do internships during the summer. Gone are the days when SAIS students could expect to spend July and August busing tables. (An October 1964 registrar's memo lists students' summer jobs to reveal "the colorful background" of the student body. The lauded positions in the 1960s included wrestling champion, forest ranger, beer salesman, chambermaid, roughneck [2], cattle herder, Arf dog food salesman, busboy, Fuller Brush salesman, and janitor [3].)

To compare: In recent years SAIS interns have worked for Bankers Trust in London, Citibank in Mexico, Morgan Stanley-Tokyo, the International Energy Agency in Paris, as well as the Arias Foundation in Costa Rica (a human rights group), and EcoCaribe in the Dominican Republic.

But this triggers concern among some students and faculty, who say that spending 30 hours a week on a job during the semester slices crucial time from studies and allows scant opportunity for reflection and socializing.

"Students forget what it's all about," says John Service, a second-year student in the Western Hemisphere Program, whose father and grandfather have been U.S. diplomats in Latin America and China. He's found that his classmates "get lost in 'the end' before enjoying the process. The reason we are here is to explore and challenge ourselves."

1965 ...
The top three employers recruiting at SAIS were the U.S. Foreign Service, other offices at the State Department, and the U.S. Information Agency. The CIA came in a close fourth. Only one person out of 940 alumni worked for The World Bank.

1998 ...
Three primary recruiters were the Federal Reserve of New York, The World Bank, and AIG, American International Group Inc., a finance and insurance firm.

The pressures mean some students might, in the end, forsake their dreams. Says Goodell, of Social Change and Development, "I see the effects on the really service-oriented students. They need some relief and encouragement and imagination about what direction to go."

Partly, that could mean addressing their fears about student debt, Goodell says. "We can encourage them that there are 26-year-olds with $30,000 in loans who can solve this." Some government agencies, like the Peace Corps, allow students to defer loans. There are also grants that partially cover loans for those who go into public service jobs, administrators note.

And there are signs that the public service market is rebounding, Goodell and Lambert point out. Following the East Asia financial crises, and with the war in Kosovo escalating, hiring trends are starting to reverse in 1999. Students also are asking about jobs related to refugee issues or ethnic conficts. It remains to be seen whether these events will shift the international focus away from business. Says Lambert, "The public sector is really alive this year--agencies have downsized too far. I'm really hearing it from the CIA; they've called four times."

SO WHAT DOES THE FUTURE hold for SAIS? If the school hopes to remain competitive in attracting top students and faculty and continue turning out future national and world leaders, it obviously can't remain oblivious to the changing world tableau. Yet, the "Wharton Temptation" remains a real--and potentially dangerous--threat. What does the world lose if its future diplomats and humanitarian aid leaders instead turn their talents to multinational banking and corporate trade?

In truth, the scenario is not so black and white. In many areas of the world, the private sector is picking up some of the community development, healthcare, and economic investment roles once played by governments or non-profits. For SAIS graduates, "making a difference" may still be possible, then, even if Exxon- -not Oxfam--is signing their paychecks.

Wolfowitz and other administrators are adamant that they want SAIS students to remain idealistic. "I'd be very unhappy if I felt like people were giving up the idea of public service as a central part of SAIS," he says. Though he has pushed for economics offerings, he doesn't want the shift to go too far: "I hope SAIS doesn't ever acquire the ethos of a business school." He mentions a visiting Wharton professor's recent take: "He thought of SAIS students as just as bright as Wharton students without the dark underside of avarice."

SGA president McBride, meanwhile, is hedging her bets with two kinds of internships. She has worked for a member of the Australia's Parliament; and she's done political and economic risk analysis for Exxon Exploration Company in Houston, Texas. Regardless of how one characterizes SAIS's soul today, she says, looking inward is crucial: "There's that old adage, pick your future before it picks you. If we don't, we could lose our focus as an international school." She adds after a pause: "Our education is valuable today, but part of that is the reputation of the school 15 years down the road. Where are we going with this?"

Next issue: The magazine goes to Hopkins's Nanjing Center in China, to see how capitalism is taking root.