¹ To be fair, many of the most misguided criticisms appear in newspaper editorials, partisan tracts, and blog-posts. The Spellings Report on Higher Education made some of these arguments about obsolescence, nonprofits, and the Internet in U.S. Department of Education, A Test of Leadership: Charting the Future of U.S. Higher Education (Washington, DC: 2006). Heritage Foundation scholar Stuart Butler makes them as well in “The Coming Higher-Ed Revolution,” National Affairs, Winter 2012 at http://www.nationalaffairs.com/doclib/20111220_Butler_Indiv.pdf. Critiques of the privatization of American higher education include Christopher Newfield, Unmaking the Public University: The Forty-Year Assault on the Middle Class (Cambridge, MA: Harvard University Press, 2008) and Marc Bousquet, How the University Works: Higher Education and the Low-Wage Nation (New York: New York University Press, 2008). And a recent argument that higher education has lost its way is Andrew Hacker and Claudia Dreifus, Higher Education? How Colleges are Wasting our Money and Failing our Kids—And What We Can Do about It (New York: Times Books, Henry Holt and Company, 2010).

² For a loving, but highly realistic, account of the university and its accomplishments see the book by the former dean of Harvard College: Henry Rosovsky, The University: An Owner's Manual (New York: W.W. Norton and Company, 1990). For a more skeptical, but still respectful, analysis by the former president of Harvard, see Derek Bok, Universities in the Marketplace: The Commercialization of Higher Education (Princeton, NJ: Princeton University Press, 2003). David Kirp has written the best single account of the dilemmas of higher education in Shakespeare, Einstein, and the Bottom Line: The Marketing of Higher Education (Cambridge, MA: Harvard University Press, 2003).

³ The reasons for this seem to be the following. First, legislators are myopic and short-term cuts in higher education, especially when they are met by heroic attempts by institutions to maintain enrollments, appear as savings even though the long-term consequences are reduced human capital and growth for the state. Second, many state universities have an independent power to tax through tuition increases which can then be blamed on a group outside the legislature. Third, higher education does not have the lobbying power of prison guards, K–12 teachers, or medical institutions.

⁴ On the payoff from higher education see John Stiles, Michael Hout, and Henry E. Brady, “California's Fiscal Returns on Investments in Higher Education,” at http://cshe.berkeley.edu/publications/docs/ROPS.Stiles%20et%20al.ReturnOnInvestment.10.2.2012.pdf. Also see Claudia Goldin and Lawrence F. Katz, The Race Between Education and Technology (Cambridge, MA: Belknap Press of Harvard University, 2010). On public opinion about higher education see John Immerwahr, “Public Attitudes on Higher Education: A Trend Analysis, 1993 to 2003,” paper prepared by Public Agenda for the National Center for Public Policy and Higher Education, February 2004 at http://www.highereducation.org/reports/pubatt/Pub_Agenda_040210.pdf and see John Immerwahr and Jean Johnson (with Amber Ott and Jonathan Rochkind), “Squeeze Play 2010: Continued Public Anxiety on Cost, Harsher Judgments on How Colleges are Run,” report prepared by Public Agenda for Public Policy and Higher Education, February 2010 at http://www.highereducation.org/reports/squeeze_play_10/squeeze_play_10.pdf

⁵ For example: Richard Arum and Josipa Roksa, Academically Adrift: Limited Learning on College Campuses (Chicago: University of Chicago Press, 2011); Andrew Hacker and Claudia Dreifus, Higher Education? How Colleges are Wasting our Money and Failing our Kids—And what We Can Do about Iit (New York: Times Books, Henry Holt and Company, 2010); Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters (New York: Oxford University Press, 2011); Richard P. Keeling and Richard H. Hersh, We're Losing Our Minds: Rethinking American Higher Education (Palgrave MacMillan: 2011).

⁶ U.S. Department of Education, A Test of Leadership: Charting the Future of U.S. Higher Education (Washington, DC: 2006), page xii.

⁷ Stiles, Hout, and Brady, 2012 propose a figure of $1.6 million that would be $32,000 per year over a 50-year career. Does this make college worthwhile? The total cost (tuition, fees, room and board, and expenses) of going to the University of California is approximately $32,000 per year for a total of $128,000 over four years. Clearly this investment would be quickly recouped. Claudia Goldin and Lawrence Katz, 2008 estimate annual returns to college completion beyond high school graduation in the ten to fifteen percent range (page 84).

⁸ Graduate education is another matter. Now American universities have an enormous lead in producing PhDs, but once so did Germany and Britain.

⁹ See http://education.exeter.ac.uk/dll/details.php?code=DLF02

¹⁰ Even the Harvard-MIT (and now Berkeley) edX initiative that appears to be an exception at first glance is described by MIT professor Anant Agarwal in these terms: “… it helped the MIT brand. It brought a lot of goodwill to MIT, and recruiting became a lot easier.” see Larry Hardesty, “Is MIT Giving Away the Farm? The Surprising Logic of MIT's free online education program,” Technology Review, August 21, 2012, at http://www.technologyreview.com/article/428698/is-mit-giving-away-the-farm/. At Berkeley, edX is thought of as only one piece of a larger strategy that includes offering courses for a fee.

¹¹ Some critics argue that higher education is just certification and that it does not necessarily impart skills—employers want college graduates simply because college graduation signals that the person is intelligent and capable. Almost all empirical research, however, suggests that college degrees provide real human capital. See Michael Hout, “Social and Economic Returns to College Education in the United States,” Annual Review of Sociology, 38: 10.1–10.22, 2012.

¹² It is also worth noting that many parents probably see great value in sending their children off to new places that provide a modicum of protection and support as they make the transition from adolescence to adulthood.

¹³ Calculated from the figures at http://nces.ed.gov/fastfacts/display.asp?id=76.

¹⁴ See Ronald G. Ehrenberg, 2012, “American Higher Education in Transition,” Journal of Economic Perspectives, 26: 193–216 and John Quinterno, The Great Cost Shift: How Higher Education Cuts Undermine the Future Middle Class (New York: Demos, 2012) at http://www.demos.org/sites/default/files/publications/thegreatcostshift_0.pdf

¹⁵ See Robert B. Archibald and David H. Feldman, Why Does College Cost So Much? (New York: Oxford University Press, 2011).

¹⁶ William J. Baumol, “Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis,” American Economic Review, 57: 415–26, June, 1967, page 416.

¹⁷ Obviously the cost pressures have been greatest in professional schools, engineering, the physical and life sciences, and some of the social sciences. Universities have struggled with equity issues as this sometimes leaves the arts and humanities behind. The average pay at all ranks of the professorate in 2011–12 was $82,556 (see http://www.aaup.org/NR/rdonlyres/2223C57E-4F87-4C93-99F4-7BAA65C7CC80/0/Tab4.pdf), and after accounting for inflation, “the overall average salary of a full-time faculty member in 2011–12 is less than 1 percent higher than it was five years ago, in 2006–07” (see Saranna Thornton and John W. Curtis, “A Very Slow Recovery: The Annual Report on the Economic Status of the Profession-2011–12,” Academe, March–April 2012.)

¹⁸ Howard Bowen, The Costs of Higher Education: How Much Do College and Universities Spend Per Student and How Much Should they Spend? (San Francisco: Jossey-Bass, 1980).

¹⁹ Robert Zemsky, William Wenger, and William Massy, Remaking the American University: Market-Smart and Mission Centered (New Brunswick, NJ: Rutgers University Press, 2005). Also see Ronald J. Ehrenberg, Tuition Rising: Why College Costs So Much (Cambridge, MA: Harvard University Press, 2000).

²⁰ Ron Ehrenberg, 2012 and Burton A. Weisbrod, Jeffrey P. Ballou, and Evelyn D. Asch, Mission and Money: Understanding the University (New York: Cambridge University Press, 2008), especially Chapters 3 and 11.

²¹ My own opinion is that the need for the personal involvement of highly priced professors is not so much a disease as a basic feature of how human learning occurs so that it may be very hard to change, but the basic professorial input can probably be used much more effectively as we learn more about learning.

²² See Derek Bok, 2003; Kirp, 2003; Ehrenberg, 2000, 2012; Weisbrod, Ballou, and Asch, 2008.

²³ Ehrenberg, 2000 argues that public institutions control costs better than private institutions (pages 23–26).

²⁴ Clayton M. Christensen and Henry J. Eyring, The Innovative University: Changing the DNA of Higher Education from the Inside Out, San Francisco: Jossey-Bass, 2011, page xxiii.

²⁵ Ehrenberg, 2000, page 7.

²⁶ The impacts of reductions in state funding for higher education in California are documented in Hans Johnson, “Defunding Higher Education: What Are the Effects on College Enrollment?” San Francisco: Public Policy Institute of California, 2012 at http://www.ppic.org/content/pubs/report/R_512HJR.pdf

²⁷ See Christensen and Eyring, 2011 and Ben Wildavsky, Andrew P. Kelly, and Kevin Carey (editors), Reinventing Higher Education: The Promise of Innovation (Cambridge, MA: Harvard Education Press, 2011).

²⁸ Richard Arum and Josipa Roksa, Academically Adrift: Limited Learning on College Campuses (Chicago: University of Chicago Press, 2011).

²⁹ Ibid, page 30.

³⁰ Methods of measuring economic value-added in higher education are described in Timothy Rodgers, “Measuring Value Added in Higher Education: A Proposed Methodology for Developing a Performance Indicator Based on the Economic Value Added to Graduates, Education Economics, 15 (1): 55–74, March 2007. In principle, similar methods could be developed to measure increases in citizenship, tolerance, life-skills, and appreciation for art and culture. If care is taken to measure the right things and to control for the vastly different populations served by various higher education segments, then these methods can be useful for evaluating programs, but there is far too much noise and uncertainty in these measures to use them to evaluate individual faculty members.

³¹ Susan A. Ambrose et al., How Learning Works: Seven Research-Based Principles for Smart Learning (San Francisco: Jossey-Bass, 2010), and Maryellen Weimer, Learner-Centered Teaching: Five Key Changes to Practice (San Francisco: Jossey-Bass, 2002).

³² The problems with student evaluations are analyzed in Scott E. Carrell and James E. West, “Does Professor Quality Matter? Evidence from Random Assignment of Students to Professors,” National Bureau of Economic Research, Working Paper 14081, June, 2008 at http://www.economics.harvard.edu/faculty/staiger/files/carrell%2Bwest%2Bprofessor%2Bqualty%2Bjpe.pdf.

³³ David Kirp, 2003, Chapters 9–10, and Scott Carlson, “After Losing Millions, Columbia U. Will Close Online-Learning Venture, The Chronicle of Higher Education, January 17, 2003.

³⁴ For a description see: http://budgetmodel.uoregon.edu/content/introduction-responsibility-centered-management

³⁵ Kirp, 2003, Chapter 6.

³⁶ Certainly the assessment of university performance, the evaluation of teaching, and the improvement of budgeting requires better measurement. Creating Internet courses also leads inexorably to measurements of student clicks, attention, and performance.