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Knowledge and Money: Research Universities and the Paradox of the Marketplace
Reviewed by Brian Pusser
Roger L. Geiger.
Palo Alto, Calif.: Stanford University Press, 2004
Knowledge and Money: Research Universities and the Paradox of the Marketplace is Roger Geiger's third major historical treatment of research universities in the United States and perhaps his most important work to date. It presents a detailed description of the remarkable transformations that have occurred over the past three decades in America's elite public and private re-search universities, and points to some daunting challenges ahead. Those un-familiar with these significant changes in institutional wealth, selectivity, student quality, and academic research will benefit greatly from this book.
Using data drawn from institutional, state, and national sources, Geiger documents the dramatic rise in tuition and other resources garnered by private—and to a lesser extent, public—institutions, and the wealth gap that increasingly distinguishes the private and public sectors. These additional resources, he argues, give the private institutions a competitive advantage over the publics in upgrading facilities, attracting desirable undergraduate and graduate students, recruiting faculty, and funding research centers, while at the same time giving the elite publics a distinct advantage over those less affluent public institutions that serve the majority of students. Like a gilded self-fulfilling prophecy, wealth and prestige beget greater wealth and prestige, with dramatic implications for the future of post-secondary education.
Knowledge and Money also sounds a number of timely alarms as it points to the increasing wealth of the families of students in the elite institutional cohort; the rising influence of student consumer power; potentialconflicts of interest arising from industry-funded research; the growth of organized research units at some distance from the academic core; and the continuing disparities in research funding between the sciences and the humanities, a point made in greater detail in Academic Capitalism, a 1997 book by higher education policy analyst Sheila Slaughter and economist Larry Leslie.
Geiger's central thesis is that key activities of research universities—enrolling students, hiring and retaining faculty, generating research, attracting external resources, and allocating those resources internally—can be understood as products of market behaviors. He states, "The common feature of all of these markets is the compulsion they exert over university behavior. The actions of all market participants create conditions that severely restrict the range of choice and action for any individual institution—Adam Smith's invisible hand." The argument over whether the production dynamics of higher education can effectively be modeled as a market has been contested since Smith's eighteenth-century speculations on competition. Geiger makes a thoughtful contribution to a debate of great consequence that will not soon be resolved.
In this text, as in most contemporary discourse on the topic, precisely what is meant by the term "markets" in higher education remains elusive. At times the word stands in for "competition." The terms "administered markets" and "market coordination" also appear, "the marketplace" is invoked in the title and it is noted that "market forces" may be a more useful analytical concept than the free markets of economic theory. It is a credit to the author that he does not oversimplify on behalf of his argument, yet in light of the complexity of forces shaping higher education, the various market proxies carry considerable weight here.
The book further contends that "social coordination through markets has undoubtedly grown in the current era and in the process has detracted from the capacity of policy makers and university leaders to influence events." The question whether markets shape policy in higher education or those policies shape competitive behavior is central to understanding the emerging shifts in the higher education arena. While the market perspective is at the core of this work, greater attention to other perspectives might enhance our understanding of contemporary postsecondary dynamics. A number of recent works, most notably labor economist Ronald Ehrenberg's 2001 Tuition Rising, point to the role of institutional culture in mediating the influence of competitive behaviors on research universities. A political analysis would suggest that a turn to market regulation of the internal and external affairs of postsecondary institutions is a product of social movements and interest group effort. Changes in standards of selectivity, tuition prices, funded research, and industry-university partnerships are generally mediated and ratified by political actors. From that perspective, the "rise of the market" has been shaped by the increasing influence of particularly salient political projects. There are a number of indicators that this has taken place. The ascension of "quality," "choice," and "economic development" rationales in post-secondary policy debates at the state and national levels has further legitimized fee increases for public institutions, public subsidies for private institutions, and increases in financial aid for both sectors. Similarly, over the past two decades, the Congress has approved vast increases in academic earmarks and federal funding for university research, a process significantly influenced by the lobbying efforts of elite public and private institutions.
The author provides an important reminder that such cornerstones of postsecondary education as broad access, equity, and the production of public goods are facing significant challenges in the emerging competitive environment. The work of scholar of international higher education Simon Marginson, Mexican sociologist Imanol Ordorika, and others suggests that those cornerstones are more likely to be preserved where a variety of interests negotiate postsecondary policy. Contest and debate have been central to creating and preserving institutional and social change through higher education in the United States. A key question going forward is to what degree the idealization of the market might shift a traditionally pluralistic model of postsecondary organization and governance toward one in which influence resides more firmly with those who hold the greatest economic power.
In Knowledge and Money, Roger Geiger offers an essential reminder of the scope and historical complexity of postsecondary education. "The legacy of the 1980s," he writes, "witnessed the kind of shift in the zeitgeist that is more readily described than explained." This book constitutes a thought-provoking depiction of that zeitgeist, one that should motivate readers to continue to pursue its implications and to respond to the challenges it presents.
Brian Pusser is assistant professor in the Center for the Study of Higher Education at the University of Virginia.
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