By Michael McIntyre
TAnyone who has read the Chronicle of Higher Education
over the past decade or so has heard the drumbeat: the university
needs to get with it and embrace the market. Anyone who has taught
in that decade, perhaps excepting those lucky few at universities
well-insulated from the market by multi-billion dollar endowments,
has felt the drumbeat’s effects: pressure on class sizes,
marketing studies for new academic programs, students treated
as customers. For just as long, AAUP and the faculty at large
have protested loudly that treating the university as one more
business will degrade our main tasks of scholarship and teaching.
But, since our high-minded sentiments appear to be getting us
nowhere fast, let me suggest that we abandon the high ground and
engage the battle where it will be lost and won, on the terrain
of the political economy of the university.
The university may not be a business, but it does have to pay
the bills. For most private universities, that means tuition dollars
are overwhelmingly important. As state spending on higher education
stagnates or even drops, public universities, too, come to generate
an increasing share of revenues out of tuition dollars. As a result,
the student becomes a producer of marginal revenue. Even though
the university may not run a profit, adding one extra student
generates more revenue than costs. It may be an oversimplification
to say that the student is a customer – after all, parents
and the government may kick in a significant portion of the price
– but it’s not fundamentally wrong.
If students are quasi-customers, what are they showing up to buy?
We know from the UCLA surveys of entering students that they’re
buying the promise of future higher incomes. We also know that
to secure those higher incomes, students need to complete the
degree. Students with some college make somewhat higher incomes
than students without, but the real break in incomes in the U.S.
is between workers with undergraduate degrees and those without.
So, students come to the university to buy a credential. That
credential certifies them as having certain general skills (literacy,
numeracy, and perhaps, dare we say, compliance), and in some cases
specific skills relevant to the labor market (accountancy, public
relations, hotel management, etc.). That puts us in a very strange
business, for it makes students both the customer and the product.
That peculiarity manifests itself in the fact that students must
labor for their credential as well as purchase it, and they themselves
are the material upon which they labor. That credential certifies
a degree of self-transformation, but it contains little information
about how the student was transformed while obtaining the credential.
For the economically rational student, the best strategy is to
obtain this credential at the lowest cost. Not for nothing does
ratemyprofessor.com tell you which professors are easy and which
Please don’t mistake this as a moralistic attack on lazy
students. Students are caught in a collective action problem.
If all students at a particular university work hard, an efficient
labor market will recognize that the credential from that university
is worth more, and will reward the students accordingly. However,
an individual student’s effort will not have an appreciable
effect on the value of the credential, so the rational course
of action is to free-ride, to piggyback on the hard work of others.
Since all students have this same incentive the natural tendency
is to produce a cohort of free riders. The unintended outcome
of this individually rational action is to lower the collective
value of the credential. Unfortunately, the lone diligent student
cannot raise the market value of the credential; unrewarded diligence
is rarely maintained.
When Marketopia U makes decisions about how to allocate revenues,
the market must guide it. In any university, some majors will
require more work than others. Economically rational students
will avoid them, gravitating instead to the majors that allow
them to secure their credentials with the least labor. Marketopia
U will rationally respond to student demand by shifting resources
to programs in the greatest demand. In consequence, rigorous programs
will become marginal to the university, while gut courses will
proliferate. The economically rational actions of students and
administrators will ineluctably transform Marketopia U into Slacker
There’s good news and there’s bad news. The good news
is that market-driven universities are not necessarily the wave
of the future. Because of the incentive-compatibility problems
sketched above, market-driven universities are likely to produce
degrees of lowered value in the market. Rich private universities,
those most insulated from market pressures, will continue to command
a premium. What’s the bad news? The bad news is that any
individual university can be run into the ground by an administration
pursuing the mantra of the market.
Why are faculty members the first and often the only line of defense
against the encroachment of the market? Not because we’re
nobler or smarter or more farsighted than other players in the
game, but because our immediate and long-term interests are different.
None of us wants to spend our nights grading hastily composed
student essays. None of us wants to live in fear of bad student
evaluations caused by a rigorous curriculum. Few of us want our
courses packed with so many students that we’re reduced
to courses built around lectures and multiple-choice exams. All
of us would like to pick up a book now and then, to generate new
ideas that may or may not show up in next term’s syllabus.
Almost all of us have ideas for research that we wish we had time
to carry out. And, to take the long view, none of us want to teach
at the ultimate market-driven university where mass-produced courseware
is delivered to the students via learning assistants paid low
piece-rates with no job security.
What are the morals of the story? Two of them will be no surprise
coming from the AAUP. Two others may be:
• Tenure is your friend. We don’t need to apologize
for the fact that tenure insulates us from market pressures. Tenure
helps us maintain educational standards precisely because it insulates
us from the market. When the university can’t get rid of
us, we have greater latitude to demand more of our students. That
latitude helps preserve the university from market failure.
• Faculty governance is your friend. At most of our universities,
the faculty still has effective power to hire and tenure, as well
as power over the curriculum. Traditional standards of academic
rigor preserve the university from market failure even as they
serve our interests as faculty members.
• External research grants are your friend, not only because
they buy you time for your research agenda, but because they diversify
the university’s revenue base. As that revenue base diversifies,
the market exerts less pressure on the university.
• The development office is your friend, for similar reasons.
Development officers may have to spend a good deal of their time
sucking up to people with money, but their holy grail is unrestricted
giving, exactly the sort of revenue stream that insulates the
university from market pressures.
In short, AAUP’s fight is as important today as it was in
1940. Unfortunately, we come to that fight with our ranks depleted.
National membership is down by more than half in the past generation.
Strong, active chapters are the exception rather than the rule.
My predecessor, Pan Papacosta, has spent the past three years
working to strengthen chapters across this state. I want to carry
on that work. Contact us, and let’s talk about how the state
conference can work with your chapter to rebuild AAUP’s