A Perfect Mess

The Unlikely Ascendancy of American Higher Education

The University of Chicago Press

Contents

A System without a Plan

Elements of the American Model of Higher Education

The American system of higher education is an anomaly. In the twentieth century it surged past its European forebears to become the dominant system in the world — with more money, talent, scholarly esteem, and institutional influence than any of the systems that served as its models. By all rights, this never should have happened. Its origins were remarkably humble: a loose assortment of parochial nineteenth-century liberal arts colleges, which emerged in the pursuit of sectarian expansion and civic boosterism more than scholarly distinction. These colleges had no academic credibility, no reliable source of students, and no steady funding. Yet these weaknesses of the American system in the nineteenth century turned out to be strengths in the twentieth. In the absence of strong funding and central control, individual colleges had to learn how to survive and thrive in a highly competitive market, in which they needed to rely on student tuition and alumni donations and had to develop a mode of governance that would position them to pursue any opportunity and cultivate any source of patronage. As a result, American colleges developed into an emergent system of higher education that was lean, adaptable, autonomous, consumer sensitive, self-supporting, and radically decentralized. This put the system in a strong position to expand and prosper when, before the turn of the twentieth century, it finally got what it was most grievously lacking: a surge of academic credibility (when it assumed the mantle of scientific research) and a surge of student enrollments (when it became the pipeline to the middle class). This book is an effort to understand how a system that started out so badly turned out so well — and how its apparently unworkable structure is precisely what makes the system work.

It may seem strange to call the motley collection of 4,700 American colleges and universities a system at all. "System" implies a plan and a form of governance that keeps things working according to the plan; and that indeed is the formal structure of higher education systems in most countries, where a government ministry oversees the system and tinkers with it over time. The U.S. system of higher education, however, did not arise from a plan, and no agency governs it. It just happened. But it is nonetheless a system, which has a well-defined structure and a clear set of rules that guides the actions of the individuals and institutions within it. In this sense, it is less like a political system guided by a constitution than a solar system guided by the laws of physics. And like the latter, its history is not a deliberate construction but an evolutionary process. The solar system also just happened, but that doesn't keep us from understanding how it came about and how it works. In this chapter, I examine the forces that drove this process of development, the distinctive structure that emerged from the process, the rules that govern the structure, and the particular benefits and costs that the structure has bestowed on this peculiarly American system. (One of the peculiarities of the system is that Americans use the terms "college" and "university" interchangeably, as I do in this book. Elsewhere in the world, "university" refers to a more elevated institution than a college, but in the United States, "college" is the default term. In the American context, using the term "university" a lot comes across as pretentious.)

To help frame this story, let me start with a few statistics. The American university, of course, has its roots in Europe; and the European university is itself one of the great institutional success stories of all time. Clark Kerr pointed this out with some dramatic numbers. By his count,

About eighty-five institutions in the Western world established by 1520 still exist in recognizable forms, with similar functions and with unbroken histories, including the Catholic church, the Parliaments of the Isle of Man, of Iceland, and of Great Britain, several Swiss cantons, and seventy universities. Kings that rule, feudal lords with vassals, and guilds with monopolies are all gone. These seventy universities, however, are still in the same locations with some of the same buildings, with professors and students doing much the same things, and with governance carried on in much the same ways.

There must be something special about these institutions that gives them such incredible durability.

American universities cannot compete with their European counterparts in longevity, but they have done amazingly well in the short time they have been in existence. Consider a 2014 effort to rank the top 500 universities in the world by the Institute of Higher Education at Shanghai Jiao Tong University, using criteria like academic citations and Nobel Prizes. This ranking shows that 146 of the top 500 universities in the world are American, but the proportion gets progressively higher the closer you get to the top. American universities constitute fifty-two of the top 100, thirty-two of the top fifty, and sixteen of the top twenty. Only two non-U.S. universities make it into the top ten, Cambridge and Oxford. Now one can quibble about the criteria used in this or any other ranking system, but it is hard to deny that U.S. universities, although late arrivals on the scene, have done remarkably well. Other ranking systems show a similar pattern. For example, the Times Higher Education Supplement rankings show the United States with fifteen of the top twenty universities. Webometrics, which measures university scholarship visible on the web, shows it with seventeen out of twenty. And consider another measure of eminence: between 1901 and 2013, there have been 864 Nobel laureates, and 347 of them (40 percent) were American. From 2000 to 2014, 49 percent of the Nobel laureates were scholars at American universities.

So what accounts for the astonishing rise by American universities in the last 100 years? One explanation is the ascendancy of the United States to a position of economic, military, and cultural dominance in the twentieth century. Wealth and power have certainly been important factors in shaping the influence of American higher education, providing this system with deep financial resources and the ability to draw a rich array of international academic talent. A second is the emergence of English as the prime international language, which has given U.S. universities an enormous advantage in reaching a world audience with its publications and in recruiting faculty and students from abroad. A third is the two world wars of the twentieth century, which devastated European (and especially German) universities while at the same time funneling large amounts of war- related research money to their protected American counterparts, and the rise of the Cold War prompted the United States to invest an enormous amount of money in university enrollments and research. As I spell out in chapter 7, all of these elements have given American universities a significant competitive advantage. In their absence, the dominance of American universities probably never would have developed.

However, I choose not to focus on these powerful contextual factors. Instead, I examine the structural elements within the system of American higher education itself that allowed this system to capitalize on the opportunities granted it by wealth, power, linguistic dominance, geographic isolation, and government investments. Without denying the importance of national might, therefore, I focus on some less obvious but equally compelling reasons for the dominance of the U.S. university. By the time all of these advantages came its way in the mid-twentieth century, the American system of higher education already had a combination of broad-based political support, large and multiple sources of revenue, institutional autonomy, and organizational capacity — all of which allowed it to make the most of the emerging historical possibilities.

To understand the success of American universities, we need to go back to a basic tension that lies at the heart of liberal democracy on both sides of the Atlantic. This is the tension between democratic politics, with its willingness to constrain liberty in order to maximize social equality, and liberal markets, with their willingness to tolerate inequality in order to maximize liberty. In higher education, this translates into a tension between social accessibility and social exclusivity, between admitting everyone and limiting access to the elite. And in both Europe and the United States, the mechanism for diffusing this tension has been the same. What allows us to accommodate both our democratic and our liberal tendencies in higher education is stratification. We can make universities both accessible and elite by creating a pyramid of institutions in which access is inclusive at the bottom and exclusive at the top. Such a system simultaneously extends opportunity and protects privilege. It offers everyone both the possibility of getting ahead through higher education and the probability of not getting ahead very far. It creates a structure in which universities are formally equal but functionally quite different, where those institutions that are most accessible provide the least social benefit, and those that are the least accessible open the most doors.

Although stratification is the generic way liberal democracies balance politics and markets in higher education, national systems differ significantly in the balance between the two sets of values. What distinguishes American universities from their European counterparts is that they are much less dependent on the state and much more responsive to market pressures from educational consumers. And the primary consequence of this market orientation is that the American system of higher education adopts a more extreme form of institutional stratification, with a markedly greater distance between the top and the bottom. The system's extended hierarchy gives a strong incentive for students, faculty, and institutions themselves to gain a place as high as possible in the structure, where the rewards are greatest. But at the same time, for all three sets of actors, the system's radical narrowing toward the top of the pyramid makes such access highly unlikely.

In the following section, I examine the way in which American higher education is organized around an educational market, fostering a kind of entrepreneurial autonomy. Then I look at how this market orientation shaped the evolution of an extraordinarily stratified system of higher education in the United States. Next I turn from markets to politics, examining the peculiar balance of political purposes and constituencies that have shaped the system and reinforced its broad base of support and its independence. And I compare the American system with the medieval European university, showing how both attained considerable autonomy by operating in the space between the state and a countervailing force. Finally, I consider how the American university has inherited a mixed mode of authority, which helps reinforce its distinctive mode of organization and its ability to manage the external forces that seek to control it.

The Market-Orientation of American Higher Education

The market came late in world history, but it was there at the beginning of American history. Louis Hartz argued that the United States skipped the feudal stage of development by being born as a liberal society. And Martin Trow developed this insight into a powerful explanation for the early emergence and stunning vitality of American higher education. Consider some of the numbers that Trow provides. Before the revolution, the American colonies had nine colleges while the mother country had two. By the Civil War, the U.S. total had grown to 250. "By 1910, we had nearly a thousand colleges and universities with a third of a million students — at a time when the 16 universities in France enrolled altogether about 40,000 students."

The market environment, Trow argues, fostered a peculiar kind of organization and governance in American colleges from the very start. Unlike their European counterparts, early American colleges emerged as private nonprofit entities, with state corporate charters but little or no state support. By the middle of the nineteenth century, states had founded a number of public colleges and universities, which quickly became the growth sector in American higher education. But these formally public institutions also received only a portion of their funding from government. During the twentieth century, overall state appropriations at all public institutions of higher education fluctuated around 20–30 percent of total revenue. The share of public university budgets coming from state appropriations grew to a peak in the mid-twentieth century and then has declined steadily to the present. By 2013, public institutions of higher education received about 21 percent of their funds from state appropriations, with another 16 percent from the federal government.

Nowadays leading public research universities often receive less than 10 percent of their funds from the state. Most of the rest comes from donations, endowment, research grants, patents, and, most important, student tuition. A majority of these sources of revenue are independent of government control (research grants are the major exception), and pursuing them calls for a form of organization that allows, even mandates, institutions of higher education to operate like entrepreneurs in the educational marketplace. To survive and prosper, a college or university needs to be adept at attracting the tuition dollars of students and the donations of alumni. In the eighteenth and nineteenth centuries, the primary source of market-based revenue was students, and this has continued to be the case in recent years, even after other forms of income have grown substantially.

A distinctive trait of American universities is their dependence on tuition. This dependence is greater for private (mostly not-for-profit) institutions, which lack base funding from the state, but public universities also depend on tuition because of their need to supplement inadequate state subsidies and provide funds that can be spent without being subject to state guidelines. In the early to mid-twentieth century, a few states (most notably California) offered free tuition, but this experiment disappeared in the latter part of the century, as taxpayer revolts and competing fiscal demands left state appropriations lagging behind the growth in expenses. Over the course of the twentieth century, tuition fluctuated around 20–25 percent of total revenues for all institutions of higher education, and by the end of the century, tuition accounted for about 28 percent of revenues at private schools and 19 percent at public schools. In 2012, students in half of the states were paying a larger share of the cost of public higher education than the state.

Tuition dependence means that American colleges have always had to be nimble actors in a competitive market environment. They have to attract and retain students, position themselves in relation to competitors, adapt to changes in consumer demand and social conditions, lure contributors, and creatively pursue other forms of outside revenue. This calls for distinctive forms of governance, organization, and curriculum.

At the heart of the American model of university governance is an independent board of trustees, dominated not by government officials or academics but by laypersons. This board serves as a buffer between university and state, a counterweight to the influence of the faculty, a conduit to the real world of practical pursuits in a market society, and a source of donations. The board appoints the president, who, in the American system, is a remarkably strong figure posed against a relatively weak faculty.

A strong president, backed by a lay board, serves as the CEO of a market-oriented educational enterprise, and the structure of the institution follows suit. This means that the American system of higher education — even in the public sector — is unusually independent of the state and unusually dependent on the consumer. It also means that the system is extraordinarily stratified. Let's look at the way the stratified structure of the system developed over time.