What Has Happened to Our Great Universities?

Observing political activities of students and professors, some modern critics of universities ask what has happened to our great universities. This question implies that university education system worked well in the past. However, many university problems are old. In Passenger to Frankfurt published in 1970, the all-time best-selling author Agatha Christie makes one of her characters express a preference for Asian flu or bubonic plague to political activities of university students.

In The Wealth of Nations published in 1776, Adam Smith examines “the discredit into which the universities are allowing themselves to fall.” He describes universities as even more corrupt than public schools in England. Smith observes that education works better when there are no public institutions for education and obtaining a certificate of graduation does not grant any special privileges.

Smith focuses on incentives created by different education systems to explain poor quality of university education. He notes that, when university professors control universities, the system leads to the neglect of teaching; when bureaucrats control universities, the system leads to the degrading of the profession as professors care more about pleasing their supervisors than about teaching. Currently, we have a combination of professor and bureaucrat control at universities, leading to the disadvantages of both systems.

The university education system is based on the model of education for Catholic priests. Those who are already approved by the system get to control the system. For example, one can get a PhD degree at a university only from those who already have PhD degrees in that area. This helps to entrench ideas that professors like, even when those ideas are bad. This system makes more sense for a religion where the head of the church is believed to be infallible than for science.

Unfortunately, most later changes to university education have either ignored Adam Smith’s analysis or pursued different goals than improving education. People sometimes think that competition among universities can improve the system. However, competition only works when free-market incentives are not distorted. When universities are rewarded for bad behavior—pleasing bureaucrats and politicians rather than improving teaching—competition just helps the system deteriorate faster.

Most of the US politicians and bureaucrats failed to appreciate the advantages of the early American system where people had more freedom to practice any profession without having to get degrees from universities as long as their customers were willing to pay for their goods and services.

Even very intelligent people make mistakes. When Nicola Tesla first came to the United States in 1884, his first impression was that Europe was hundred years ahead of the US in civilization (My Inventions: Nikola Tesla’s Autobiography). His experience during the next five years convinced him that he was wrong and led him to conclude that Europe was more than one hundred years behind the United States. Unfortunately, our politicians and bureaucrats were not as intelligent as Tesla. They failed to realize that the US system worked better. During the 19th and 20th centuries, the US adopted many ideas from Europe that seemed to be good at a first glance, including public education and many aspects of German university system.

Now, we know that German education system did not work well even for Germans. In the first half of the 20th century, Germany became a major center of the two of the worst ideas in recent history: fascism and communism. Germans suffered major losses in the two World Wars that they either expanded or started. It is easier to sell bad ideas to people when one controls their education.

The current education system is good at creating an environment for protecting and fostering bad ideas. Minor reforms will not fix this problem. However, there are some first steps we all can take. We all should be skeptical when we hear phrases starting with “scientists say” and ask what evidence these scientists have to support their claims and how reliable were the claims of these scientists in the past. Students and their parents should remember that their life, including their education, is their own responsibility and do not rely blindly on universities.

Dalia Marciukaityte

Dr. Marciukaityte previously she served as Humana/Mike McAlister Endowed Professor at Louisiana Tech University. Her business experience is with Strategic Management Group and Merrill Lynch.

She was born and raised in Lithuania, when it was still part of the Soviet Union. Her B.S. and M.S. degrees in management are from Kaunas University of Technology, Lithuania. She moved to the United States to study at Drexel University and the University of Pennsylvania. Her Ph.D. in finance with a minor in economics is from Drexel University.

Dr. Marciukaityte has published articles in Financial Management, the Journal of Corporate Finance, the Journal of Financial Research, the Financial Analysts Journal, the Financial Review, the Journal of Business Research, the Journal of Behavioral Finance, and other journals. Her research interests are in government regulations, market competition, corporate finance, and behavioral finance. She has taught Financial Management, Financial Markets, International Finance, and Financial Econometrics, working with undergraduate, masters, and doctoral students.