The Autonomy of Universities: Why Self-Governance Is Important

The Value of Our Social Compact

What a week for higher education…Harvard receives a letter laying out 10 provisions it must comply with to continue to receive federal funding…Harvard’s President responds:

• “No government—regardless of which party is in power—should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue.”

The federal government doubles down, threatening to take away Harvard’s tax-exempt status and cancel all international student visas. But wait, anonymous White House sources claim the initial letter to Harvard was a ‘mistake’ and there is back and forth as to whether the letter was intended to be the starting point of a private negotiation.

Harvard goes to the bond market and to donors to bolster its finances for the fight. President Trump threatens to withhold another billion in federal grants from Harvard. Harvard sues. What a week indeed…

Pressure on Institutional Autonomy and Self-Governance

While Harvard dominated the headlines, we are reminded of the African proverb: when the elephants fight, it is the grass that suffers. There has been plenty going on in the ‘grass’ this week with Texas (among others) considering new restrictions on institutional autonomy and self-governance. And, for public universities, states can make such changes stick.

In our last post, we shared thoughts on how higher education ended up in this mess. This week, we explore the case for institutional autonomy and self-governance. We like Menand’s definition of autonomy, that institutions don’t have to “answer to some standard of political correctness, economic utility, or religious orthodoxy” and are allowed to “decide among themselves the work it is important for them to undertake” (page 8).

Taxpayers foot the bill for much of the research and teaching at universities, whether they are public or private. The argument for why society benefits from institutional autonomy has two key parts: universities are valuable, and autonomously run universities are more valuable than ones constrained by overt political intrusion.

How Does the Public Benefit from Great Universities?

This is a topic for a much deeper look in future posts, but the case comes down to four main points:

1. Universities graduate students (by the millions) with the skills and capabilities needed in today’s economy. That value is demonstrated by the fact that graduates earn dramatically more than those who don’t go to college, among other personal and societal benefits from a well-educated citizenry. We wrote extensively on this topic in the fall – including how universities can get better at preparing students for successful careers.

2. Universities play a fundamental role in the US innovation ecosystem. Innovation requires a combination of basic science that helps us deepen our understanding of the world and commercialization processes that turn that understanding into valuable technologies. A deeper understanding of basic plant biology precedes more resilient crops, crops with improved yield, crops that can be used for industrial purposes such as biofuels,…

Historically, for-profit companies engaged in both basic science and commercialization, but companies have retreated from basic science. Two big reasons are the growing lead times between invention and commercialization, and the likelihood that breakthroughs spillover to rivals, making harder to appropriate returns to basic research.

Virtually gone are the days of the Bell, DuPont, Xerox and other corporate labs where armies of researchers pursued basic science. (Bell Labs at its peak had 15,000 employees, 1200 with Ph.D.s, 14 Nobel Laureates, 5 Turing Awards,…).

Universities have filled the void – fueled by dramatic increases in federal funding and the transfer of patent rights on federally funded research from the government to the university. And, the costs of losing the front end of the innovation pipeline currently filled by universities are immense but won’t be fully realized for years.

3. Universities are an economic engine in their local/regional/state economies and are increasingly important in a world where science and innovation matter. Higher education employs more than 4 million in the US directly – and so many of these jobs are not in coastal cities, but in the industrial heartland and rural areas. They are also one of the largest export earners in the economy – universities generated $50 billion dollars of value to the US economy from foreign student enrollments in 2023.

Source: College Towns

Beyond direct employment, universities spur economic development as firms and medical centers co-locate to take advantage of university talent and research. Some of these are high-tech: defense, aerospace, and semi-conductor manufacturing and our own university provide a good example.

Others are less splashy but vital, and arise from the engagement mission of land-grant universities and increasingly universities more broadly. Technical expertise, workforce development, public health education, PK-12 partnerships – and so many others – create value for business, community, and individual stakeholders.

4. Universities are one of the few places that can challenge the way society runs because doing so is not commercially viable and is politically risky. The private sector gets hammered when they take positions that aren’t politically popular. Politicians with contrarian ideas may not survive elections and/or have any real voice in decisions. We will dig much deeper into this point below.

How Does the Public Benefit from Institutional Autonomy?

The fact that universities generate a lot of value for society does not immediately imply that autonomous universities generate more value. How do we make the case?

For starters, Stein asks a good question: “Do we really want new research and new knowledge to come exclusively from private businesses?” To which we would add, “Do we really want what is researched and taught to be defined by partisan politics?”

More concretely, let’s identify some specific benefits that accrue from an autonomous university system – one that develops and disseminates new knowledge and operates without the short-term pressure of profitability or the constraints of a political party’s values and beliefs.

Thinking About a Better World

Ideas that challenge society are necessary for society to progress. But ideas that challenge society are the least likely to be funded and supported in a captured university.

The case for university research is relatively easy to make for engineering, science, medicine, agriculture – the traditional STEM disciplines – where discoveries can provide a platform for more applied research that can be commercialized. That said, even in these fields, work in areas such as climate science, environmental issues, and health disparities can draw criticism from politicians and the private sector.

The harder case is humanities and social sciences research, and yet that research is probably MOST valuable when it questions how we work as a society. Creative work in these areas may never lead to anything that can be commercialized but may help us better understand the human condition. Questions of how prior/other societies made the choices they did – and the consequences of those choices – can help inform decisions today.

Here is an example: nobody can commercialize the idea that free trade leads to gains to society and that putting up tariff walls will immiserate us. Ignoring the careful research of international trade economists led to “Liberation Day” tariffs last month that wiped out 2 trillion dollars of market value in US public equity markets (and more than that if you add effects around the world and in private equity markets). What was the last commercial innovation coming out of university labs that generated 2 trillion in value? Not that we are grumpy about this or anything…

Research that simply affirms that everything is great doesn’t lead to progress. There is irony here: research that challenges policy, social organization, current industry practices, etc. may well be the most valuable, yet at the same time, such research is the MOST vulnerable to funding whims and in need of freedom to operate.

Note we are not saying that all university research is ‘useful’ (in the broadest sense of the term). And, hard decisions about the need to continue research in some areas have to be made given resource constraints. The issue is who makes the decision and why it is made.

Freedom Attracts Talent

When it comes to creativity, there is value in the freedom to approach a problem without constraints (economic, political, or otherwise). Seeking answers to “why” without worrying about whether or not the answer can be monetized in the short-term. Looking to push the boundaries of what we know and understand to be true without political interference.

The freedom to pursue research for research’s sake drives so many faculty we know – it is their personal passion and the fundamental reason they chose an academic career over a career in the private sector/government. Faculty focus on a question they find important and are excited about, and if they can find the funding/resources needed to explore the question, they currently have the freedom to do so.

It is very difficult to adequately capture the focus, intensity, and drive a passionate scholar brings to their research. While some critics poke at the idea of faculty work ethic, we have seen over and over precisely the opposite: faculty who work ridiculous hours to meet a grant deadline, complete a series of experiments, get another paper in review, help a graduate student across the finish line…all in the name of bringing new knowledge to the world. Such intrinsic motivation is about so much more than compensation.

Contrast this with much private sector research where the focus is constrained by the need for a commercial outcome. Reduce that freedom to explore, and the job security of tenure, and see how many bright, creative people are attracted to higher education? There is already evidence the current battle over autonomy and commensurate research funding cuts is leading some US scientists to look at positions abroad.

Importance of Stability

Meaningful research programs can take decades of incremental work. Being insulated from the whims of politicians and the pressures of quarterly earnings reports allows a university researcher to spend a career on a narrow area of science (if they can find the funding).

Stability allows curricula to evolve over time and not chase every fad/hot career field running around, with all the downsides fad-chasing brings. As we have written before, the privilege of stability also means higher education has a responsibility to ensure curricula are contemporary and students are well-prepared – and we have work to do here.

Perhaps the most concerning element of the proposed interventions is the whipsaw effect seen when one political party (along with their interventions) is voted out and the new party replaces these with interventions of their own. We are already seeing this: Biden administration DEI requirements on grant funds are leading to cancellation of those same grants because of the DEI requirements – flushing all the work/investment in the process. This kind of back and forth is in no way supportive of an environment that fosters scholarly creativity and productivity.

Cost of Intervention

We have written before about the regulatory burden higher education currently deals with. But, read that list of Harvard provisions again. You think operating costs won’t increase and the effectiveness of institutions be diminished as administrators and faculty take on even more compliance and reporting burdens? Every hour a faculty member spends on some reporting requirement/training is an hour they are not devoting to research, teaching or engagement.

Experts Know Things

Autonomy means that faculty decide what is taught and how to teach it. The argument of course is that expertise matters: an economist is in the best position to determine what goes into a course on international trade; an engineer is in the best position to determine how a class in aeronautics is taught; a humanities faculty member should decide what books are part of a course in medieval literature,…

There is an element of arrogance here that has certainly rubbed some the wrong way. And, there is growing resistance to the idea of deferring to experts. This has led to plenty of arguments over faculty control of the curricula with governments intervening on the university core, what is taught in those courses, what books are in the library,…

The challenge is once a government intervenes/dictates some aspect of curricula, where does it stop? Are government bureaucrats really better positioned to decide what a college student studies than are faculty experts? We think the answer is no. (We’ll get into the responsibility this position brings in our post on autonomy.)

The Chilling Effect of Intrusion

There is no room for ‘the chilling effect’ in higher education – be it chilling liberal or conservative voices, be the chilling from within the academy or from outside (and yes, some chilling comes from within the academy). If we are going to ‘search for truth’, faculty and students need freedom (and support) to explore hard questions – from multiple perspectives.

There is already evidence that faculty are pulling back on controversial topics in our current environment. A recent AAC&U/AAUP study found that 35% of faculty believe that relative to six or seven years ago, there is less academic freedom with respect to teaching without any interference and 19% believed there is less academic freedom with respect to investigating and publishing research findings without any interference.

Some 51% of the faculty in the survey believed their colleagues are more careful to avoid controversial topics when revising curricula and 40% believe their faculty colleagues have become less willing to express controversial views in their courses.

Wait until the federal government can merge your unit with another (see the Harvard letter) if you can’t demonstrate ‘viewpoint diversity’ and see what happens…

Source: AAC&U/AAUP

What’s Next?

“Viewpoint diversity” has become an important goal of much the recent government intervention into higher education. A look into why viewpoint diversity has become a point of concern, whether that concern has merit, and how remedies may impact institutional autonomy is coming soon.

We are well aware institutional autonomy and self-governance is a privilege society has afforded universities. And, with that privilege comes a set of responsibilities. To better understand those responsibilities and what is needed to retain the privilege of self-governance, we will take a look at the issue of accountability in a future post.

As always, thanks for reading Finding Equilibrium!

Research assistance provided by Marley Heritier.

“Finding Equilibrium” is coauthored by Jay Akridge, Professor of Agricultural Economics, Trustee Chair in Teaching and Learning Excellence, and Provost Emeritus at Purdue University and David Hummels, Distinguished Professor of Economics and Dean Emeritus at the Daniels School of Business at Purdue