Source: Harold J. Noah, review of
James M. Buchanan and Nicos E. Devletoglou,
Academia in Anarchy: An Economic
Diagnosis (New York: Basic Books,
1970), in Saturday Review,
(February 21, 1970): 74-75.
ACADEMIA IN ANARCHY
In recent years the economics of education has been one of academe's outstanding growth industries, its rise signaled by an outpouring of books, studies, monographs, and articles, and its legitimacy attested by the appearance of courses entitled "Economics of Education," "Education and Economic Growth," and "Education and Economic Planning"; in universities across the land. Now that we routinely admit half of our young people to post-secondary education, and even graduate one-third of them with bachelors' degrees, hardly anyone questions the right of economists to apply their conventional tools and concepts to higher education. After all, some very valuable social resources are being consumed in this business of education, and it cannot be altogether illegitimate to ask if the best use is being made of them.
This is precisely what Academia in Anarchy attempts to do, and the ensuing condemnation is virtually total. The modern university is a house of straw, held together precariously, if at all, only by the inertia of ancient traditions observed still by faculty and administration but increasingly and overwhelmingly rejected by students. In this book the university appears as an economic freak literally asking for and deserving its current fundamental turmoil.
For those of us who work in higher education, the past decade has brought as profound a revolution in expectations and attitudes as it is possible to imagine. The Sixties opened (in the United States, at least) to a passive, almost somnolent student body whose torpor on political and social questions and whose cultural "squareness" had attained international notoriety. They were presided over by a complacent, confident faculty that looked forward to rapidly increasing demand for its services, as higher education grew in number of institutions, enrollment, and complexity. Administrators, too, saw only a golden future ahead, with money pouring in from government and foundations to expand building programs, research, and teaching. These were the fat years.
Now the Sixties have closed with a student body that has decisively abandoned privatism while embracing ideals and life-styles that were simply unthinkable ten years ago; with a faculty, much battered and bruised, whose confidence in itself and its capacity to manage university and extramural affairs has largely evaporated; and with university administrators gloomily surveying a prospect that holds only more of the same turmoil that has plagued most of them to their wits' end, and some even beyond. How could it all have happened? In particular, why has student militancy enjoyed such easy victory? Was it just the sheer power of revolting students' frenzied indignation, the pusillanimity of faculty, or the havering and uncertainties of deans, presidents, and governing boards? The authors of this irritating, yet very important, book say, in effect: "Yes, it was all this, and more." For, they argue, student weakness, revolt, faculty and administrative indecisiveness -- all are merely predictable consequences of the weirdly irrational patterns we have adopted to organize our universities:
...university education is not a free good. It does not abound in nature
and considerable scarcity value attaches to it. Resources that could be
used to produce other things that are valued by men and women have to be
employed to produce university education. Education is, in other words,
an economic good. For this reason, the economic aspects of its demand and
its supply cannot be wholly neglected. But if people will so curiously
insist on arguing that university education is a free good, those who
demand, supply, and finance it will begin to act as if it were, in fact,
free! Increasing numbers of students will demand more and more university
places, better and better physical facilities, and increasingly attentive
devotion to their "special needs." Regardless of the supply of faculties
and facilities, demands will invariably be excessive. When nominal (below
cost) or zero prices are fixed on so expensive a good, it becomes inevitable
that nonprice rationing, in some form or other, must be adopted. In addition,
suppliers become increasingly immune to consumer desires, being allowed as it
were, to "give away" an expensive good for which demand is excessive.
Worse still, the product predictably deteriorates as suppliers begin to take
on the arrogance of despots. But suppliers are not donors. They do not personally
bear the costs of charity. Again, the delusion that university education is a
free good leads to disregard both for cost reduction and for efficiency in large
or small matters. This is first day economics. Yet its truth is widely denied,
and institutions reflect this denial.
The argument is, therefore, essentially simple. Universities are peculiar places where the consumers (the students) do not pay the full economic cost of the services they receive, the producers (the faculty) do not sell the services they give, and those who pay for all this largesse (the taxpayers) are carefully denied control over the institutions they finance. What, the authors ask, would an industry producing automobiles look like under similar arrangements? Because consumers are getting their automobiles cheaply, or even free, the demand grows by leaps and bounds. In order to maintain "order" in the market, the producers establish rules for the allocation of scarce automobiles, perhaps (in elitist spirit) awarding them only to those who have demonstrated objectively that they can drive superbly or, following a compensatory philosophy, giving priority to citizens who never had the opportunity to learn to drive. Producers have little or no incentive to meet the variety of demands in the market place; instead they assert that they know better than consumers what constitutes a "good" automobile and refuse to produce anything else. The caricature is too painfully close to current reality in higher education to be funny.
Students who find themselves unable to affect the characteristics of the education they receive through normal market mechanisms turn to non-market behavior -- petition, demonstration, strike, and ultimately violence. Faculty and administrations behave perversely, rewarding violence with concession, thus reinforcing the already built-in tendency to student direct action. Because university faculties do not regard their institutions as property for which they should care, they are tolerant of student action that threatens free and open use by other members of the university community. One is reminded that rare indeed is the tenor of the response made by the fellows of a certain Oxford college to a formal notice from students that they intended to occupy the main college building the next day if their demands were not met immediately. The fellows' reply rejected the students' ultimatum, and went on to remind them that the fellows counted in their number three men with World War II sabotage experience, plus two frogmen, five commandos, four marksmen, and a franc-tireur. The demonstration did not materialize -- but then Oxford college fellows still perversely persist in regarding their colleges as their own!
The authors argue that attention to a few elementary economic. principles is a minimum requirement for the restoration of organizational health to the universities. First, and most important, if we must subsidize higher education, we should cease making payments directly to the colleges and universities, for this only perpetuates the insulation of higher education from the pressures of changing demand; instead we should pay the subsidies (preferably as loans) directly to the students. Second, when the faculty of any one college yields to violence or threat of violence, it ought to be made to recognize that its action forces the entire system of higher education to pay a price for the errors and weakness that have brought it to that plight -- and that that price is exacted in terms of diminished public respect and hence reduced taxpayer and donor support. How are these external costs to be internalized for college faculties? The authors make an ingenious and novel proposal:
Imagine the trade association of university professors, the AAUP in the
United States or its equivalent elsewhere, collecting extraordinary dues
from its members to finance a set of university Peace Prizes. These would
be awarded personally to those university and college presidents who succeed
in maintaining peace with dignity. This scheme may not be so farfetched
after all, especially if the AAUP be replaced by some wealthy donor. And,
if we may offer a bit of advice to donors here, there might be worse ways
of giving a dime. University Peace Prizes would, at the very least, exert
their effects in the proper direction. Much current donor support does just
the opposite.
Salvation, Professors Buchanan and Devletoglou surmise, could come from two directions: from legislators who firmly restore the principle that crimes are crimes even when they are committed on campus; and/or from bold innovators who, recognizing the obstacles to rational administration of higher education inherent in the present modes of supply and demand, determine to reestablish higher education institutions on full-cost, market force observing principles.
If either of these prophecies comes true, we are in for even more high spirited times in academe than we have seen yet.