After the Right has lambasted the ivory tower for decades, American higher education is now, for the first time since the 1957 Sputnik crisis, the target of radical reform directed from Washington. To assess these reforms, we need to think through some basic questions, including: What is higher education for? And what is federal higher education policy for? These are not the same question.
As Richard Vedder’s Let Colleges Fail: The Power of Creative Destruction in Higher Education documents, enrollments are falling, public confidence (not only, but especially, among Republicans) is waning, tuition is ever-rising, universities seem increasingly politicized and at the same time hostile to fundamentals such as equality and free inquiry, administrations are bloated with ideological apparatchiks, and students don’t even study like they used to. American colleges are remarkably reluctant to inquire into how well they teach, but insofar as it is possible to judge, they don’t seem to teach well. “One critical piece of data that no one collects,” Vedder points out, “is the measure of educational achievement during a student’s college years.”
According to mainstream economic science, which Vedder, Distinguished Professor of Economics Emeritus at Ohio University and a senior fellow of the Independent Institute, calls into question throughout his book, education is both a private good and a public good. It is a private good insofar as it prepares students for more lucrative careers or provides them with ideas and perspectives that they themselves find enriching. And to the extent education is a private good we can agree with Vedder that it should be privately provided—though he acknowledges that public subsidized loans and scholarships may be needed to ensure that all able students can access higher education regardless of family means. He observes, however, that “huge federal loan spending has not led to massive increases in the proportion of low-income college graduates, and indeed has probably worked in the opposite direction” since these subsidized loans have not been paired with price controls on tuition, allowing costs to skyrocket with no end in sight. For his part, Vedder opposes such price controls, on the grounds that “price controls on private institutions would largely destroy the ability of entrepreneurs to forge a presumably successful and profitable approach to business expansion.”
Education is a public good insofar as all Americans benefit from a more productive, patriotic, and enlightened citizenry, from more knowledgeable and skillful physicians or cattlemen to more disciplined and loyal soldiers, sailors, or airmen. At least that is how education is supposed to work, and as Vedder reminds us, there is little careful inquiry into how well American universities are performing these public functions. In reality, faculty and administrators mostly ignore what potentially useful studies there still are.
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Vedder’s fundamental insight is that there has not been enough “creative destruction” in American higher education: not enough institutions have been allowed to fail, and so there has not been enough space for new ideas and new institutions to reform higher education. Much of what institutional collapse has been allowed to occur (at least prior to 2025) has been in the for-profit sector, not because fraud or incompetence were more prevalent there, but, as Vedder notes, because the Obama Administration seemed to act out of regulatory animus against the very notion of for-profit education.
Although the book offers some valuable diagnosis, much of it seems to float above careful engagement with the realities of U.S. higher education. Why does an American B.A. degree take four years and an English or Canadian B.A. take only three, Vedder asks, not pausing to note that American colleges, unlike European undergraduate programs, have to complete their students’ secondary education. This is partly because American colleges historically absorb students from a much wider range of high school backgrounds, and partly because American students, unlike those in Quebec, England, or most of Germany, have twelve years of schooling before university instead of 13. And why does the government sponsor what Vedder calls the “anticompetitive accreditation racket”? Well, for one thing, unless the U.S. armed forces are going to train all their medical officers themselves, they need to know which civilian schools offer adequate training for budding health professionals and which do not.
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Vedder makes a good case that much of what American governments do in higher education is unneeded, wasteful, and unsuccessful. Yet while he proposes some potentially useful reforms, he offers no clear account of what role government, and in particular the federal government, should play in sponsoring and regulating higher education. “If this author were czar,” he writes, “we would completely eliminate public funding of collegiate academic instruction.” Such a czar would thus deprive his empire of an adequate defense. West Point and Annapolis are not without their own versions of dead wood, incompetence, and wokeness, but whatever reform they need, it does not seem prudent to dispense with these institutions altogether. Let Colleges Fail is a case study in the limits of the libertarian or free-market approach to the state’s proper role in our common life.
Milton Friedman in his day hailed Hong Kong for its small, efficient government and its high degree of economic freedom. But unless we want the United States to be as helpless as Hong Kong before the might of the People’s Republic of China, our federal government, merely in its proper role of providing for the common defense, will need an active higher education policy, and in the present rotten condition of American universities, an activist Department of Education.
