Was Government Intervention in Universities a Big Mistake?

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On February 12, the Cato Institute held an event that focused on the history of higher education, what problems currently plague our institutions of higher learning, and how we might be able to improve these institutions. During the first panel of the day, the history of higher education was discussed. Professors Richard Vedder from Ohio University, Joshua Hall from West Virginia University, and John Thelin from University of Kentucky argued that increased governmental involvement in our universities has largely been ineffective and even counterproductive in some ways. Professor Stephen Gavazzi from Ohio State University said that he supported the concept of land-grant universities but has a problem with them no longer serving the communities that are close to them.

When looking at the history of higher education in the United States, advocates of higher governmental involvement point to the establishment of land-grant universities under the Morrill Act in 1862 as a model for successful universities. Supporters of the Morrill Act claim that before it was passed, higher education in the United States was ‘non-exceptional and elitist.’ They also claim that the university focus on research after passage of the Act increased productivity, and this productivity in turn resulted in economic growth for the United States.

Professor Richard Vedder argued that the Morrill Act was largely ineffective, because “First, American higher education was rapidly growing before the Morrill Act was passed, faster indeed than the growth during the first two generations after passage of that legislation. The research university that evolved after the Civil War grew out of the German model and had nothing to do with the Morrill Act.” Finally, “…it is a fact that the American GDP passed Britain’s to become the largest in at least the Western world before more than a handful of students had even graduated from one of the new land-grant institutions.”

Professor Vedder supported his belief that governmental involvement was not paramount to university success by pointing out that successful universities today such as the University of Michigan, the University of Virginia, and the University of North Carolina were established prior to the Morrill Act and had received only small amounts of government money in the past. Vedder believes that modern-day universities will benefit from competition and be successful if the government backs off: “We took resources from a highly productive private sector, disciplined by markets and competition, and gave them—through a monopolistic political process—to inefficient institutions protected by public subsidies from highly beneficial creative destruction.”

In the past, Professor Joshua Hall was open to the idea that governmental intervention in higher education may be useful but has since changed his stance on the issue. At this event Prof. Hall focused on the problem he has with regional accreditation. He said that the linkage between federal funds and regional accreditation is problematic because it takes away the power of the market to hold universities accountable. He pointed out that universities were thriving prior to increased governmental involvement because “Students and families paid for tuition and room and board out of their own funds, and thus they had strong incentives to ensure that college was worth what they were paying.” Also, “…accrediting agencies competed with one another for reasonable ways of differentiation.”

Professor John Thelin claimed that the Morrill Act was not the cause of American economic growth, and to support his claim he said: “The late Lawrence Veazey, one of the truly influential historians of higher education, he[sic]observed…that it was the use of standard gauge railroad tracks that probably had more to do with the booming American economy of the late 19^thcentury than did the expansion of colleges and universities.” Thelin does not consider the economic trends surrounding the land-grant institutions to necessarily demonstrate the institutions’ efficiency. After analyzing individual institutions, he discovered “…how low the enrollments were, how miniscule their budgets, very low degree completion rate [sic]…And I think that the really strong institutions in this category, such as the University of Wisconsin, were strong long before any of the federal legislation”.

Professor Stephen Gavazzi believes that land-grant universities can be efficient, but the problem lies with their drifting away from their intended purpose. He said: “…it’s my contention that public and land-grant universities have forgotten their mission, especially in terms of meeting the needs of communities.” Gavazzi would prefer that land-grant universities be more helpful and closer to the populace. He said that national rankings alienated certain people for whom the universities were intended, saying: “…as a result of chasing these national rankings we are no longer serving what we called then ‘the industrial classes.’” Gavazzi interviewed experts in educational issues, and they agreed with him that land-grant universities should serve communities better.

Their message for university leaders is: “…you need to focus on greater efficiency. Period. Before you ask us for any more money. Second, we don’t really want to know about the research excellence until you tell us that you’re doing your original job, which is teaching; and by the way, if there’s anything left over, serve the community. Do the research on your own time–and to the next point—if you are going to do research then please make it applicable to the problems of the state.”