Competition in Higher Education

William Deresiewicz’s long Nation article on “The Crisis In Higher Education” is kind of a mixture of smart points and bad ones, but this here at the end about compensation of top-level academic administration seems to me to be a very interesting kind of bad point:

Just as we need to wrestle with the $700 billion gorilla of defense, so do universities need to take on administrative edema and extracurricular spending. We can start with presidential salaries. Universities, like corporations, claim they need to pay the going rate for top talent. The argument is not only dubious—whom exactly are they competing with for the services of these managerial titans, aside from one another?—it is beside the point. Academia is not supposed to be a place to get rich. If your ego can’t survive on less than $200,000 a year (on top of the prestige of a university presidency), you need to find another line of work. Once, there were academic leaders who put themselves forward as champions of social progress: people like Woodrow Wilson at Princeton in the 1900s; James Conant at Harvard in the 1940s; and Kingman Brewster at Yale, Clark Kerr at the University of California and Theodore Hesburgh at Notre Dame in the 1960s. What a statement it would make if the Ivy League presidents got together and announced that they were going to take an immediate 75 percent pay cut. What a way to restore academia’s moral prestige and demonstrate some leadership again.

I suppose that in addition to competing against other universities, universities are competing with non-university large non-profits. But the key point I would make is that of course the universities do compete against one another. If a skilled administrator leaves University A to get a higher paid job at University B that’s a wash from the perspective of American higher education as a whole but it certainly makes a different to both University A and University B. It might be nice to think that University A would just look at that situation and say “what we care about is the fate of American higher education as a whole, so we decline to participate in this bidding war” but of course nobody does that.

And this form of competition happens at all kinds of levels. Universities bid against one another for “star” faculty members, etc. Most of all, since university quality is primarily measured in America based on the quality of the inputs (average SAT score of entering freshmen, etc.) they spend a lot of effort bidding against one another to recruit the best students. But it’s not possible for every university to have an above-average freshman class.

On net, all this expenditure on competition for the best administrators, the star professors, the most lavish physical facilities, merit-based scholarships for the top tier of students, etc. simply serves to drive up the overall cost structure of the entire system without doing anything to improve quality of instruction.Cheaper travel and better information technology have made it more feasible than ever for students to study at out-of-region universities, bringing much more intense competition to the market. And in most markets, that kind of intensified competition would be creating a healthier market. But in higher education, it just further accelerates the cost increases. And that, in turn, is how you end up with these ever-growing debt levels among graduating seniors.