*Markets, Minds, and Money: Why America Leads the World in University Research*

One of the best books on the history of American higher education, author Miguel Urquiola of Columbia argues for the importance of market competition in the rise and dominance of the American system.  Strongly argued and full of good evidence and stories, here is one excerpt I found of interest:

That Columbia would be among the first successful American research universities would have surprised many observers around 1850, as the school had seen real oscillations in its fortunes.  For the first decades after its creation in 1754, Columbia was a wealthy but small school.  In 1774 it had the highest collegiate endowment, but only 36 students, while Harvard and Yale had four or five times as many…in 1797 the college had eight faculty members, during most of the 1800s it had four.  In 1809, an inquiry warned that Columbia College “was fast becoming, if it has not become already, a mere Grammar School”; between 1800 and 1850, even as New York City grew, the school’s enrollment stagnated, and even in 1850 the average entering age was 15.

And this:

Among wealthy countries, the United States is unusual in letting its university sector operate as a free market.  Self-rule, free entry, and free scope are much less prevalent in Europe.

Recommended, you can pre-order here.


A simple ranking of Nobel prizes per capita suggests the Faroe Islands as the winner!https://en.wikipedia.org/wiki/List_of_countries_by_Nobel_laureates_per_capita

More seriously, the UK is ahead of the US in this measure. I would suggest the US strength in research is more about it being the world's largest and richest economy. As such its Universities can brain drain the rest of the world for talent.

If the success of the US universities depended on the list of causes offered, why weren't they anything special until after WWII?

" the US strength in research is more about it being the world's largest and richest economy" sounds spot on to me. Follow the money.

sikicem seni

My impression of why the universities of Heidelberg, Padua, and Sorbonne are no longer as prestigious as Cambridge and Yale is because the Continental countries lost The Big One in 1939-1945, so their elites' alma maters were shamed and democratized, while the Anglo-American elites won, so their colleges became even more prestigious.

Or at least that's how it looks to ambitious parents in Seoul and Mumbai.

France lost?

They capitulated in 1940.

In STEM a related but simpler factor is immigration of Jews and Russians

Language of instruction matters. Even Mr. Sailer should know English is not the language of instruction at La Sorbonne.

Ambitious parents in Seoul and Mumbai only have bilingual kids (local + English). Most bachelor programs in universities in Europe where English is not a language of instruction are for the locals or polyglots that don't mind putting an effort on the 3rd or 4th language.

Graduate programs are different, but there's some path dependence between bachelor and graduate. If a kid starts a bachelor at X university, quite probably will do graduate at the same university. Globetrotters are a minority.

Finally, biology. During the whole Cold War period and end of 20th the US was an oasis for things related to biotechnology, genes, etc. In other places this kind of research was looked down as "unethical".

If you think that last was true of France (Jacob, Monod, Changeux) or the UK (Crick, Wilkins, Medawar, Hodgkin, Huxley, Katz, Porter) you are sadly misinformed even by the standards of young Americans.

Reminds me of David Labaree's "A perfect mess." He basically makes the same argument but chooses to illustrate his point by looking at the economic situation of midwest colleges and universities during the 19th century. Apparently, because so many people were founding colleges in an attempt to increase land value, we had the largest number of colleges per capita of any nation ever then.

As a German, I can easily give you that the US leads in university research. Is that caused by the tertiary education market? Very likely so.

Unfortunately, at the same time, this same market functions as a great sorting machine. The American path dependency originating from university choice (or rather acceptance) is absurd from a German perspective.

Because Germany does not have a proper market in place, we lack top notch universities. On the flip side, we remain a fairly happy country with limited social divergence. It’s not only that the US education market sorts people, it also matches them (assortative mating).

I suggest ‘Coming Apart’ from Murray on this topic.

+1, That's an intriguing comment. Essentially the German setup is more traditional and avoids the divergence of widespread assortative mating and it's effects as seen in America. Those effects are somewhat speculative of course.

Another commenter got it: Columbia was (is) the elite school for ambitious first generation American Jews, Harvard and Yale the elite schools for second generation and third generation wealthy (or influential) American Protestants. Today, while Stanford rides the coattails of tech, the Univ. of Chicago offers the most rigorous and diverse education.

Harvard like Trump is doing quite the number on keeping out the Asians.

This goes completely against what Colin Camerer said in an interview, advertised on this very same website:

"I am a little surprised there have not been more talented economics students taking up neuroeconomics since the upside is so huge. It seems related to the fact that the economics profession, particularly in the US, is much, much more status- and ranking-obsessed than any other academic field I know, and there is a lot of tribalism. Ambitious students who care about status and future job placement are petrified of doing anything too risky like neuroeconomics because they wouldn’t get jobs in HRM top-tier US economics departments (which is probably true). Their advisors often explicitly warn them away from new ideas too, because they care about their students’ placements in a similar way.
There is so much low-hanging fruit in neuroeconomics!"

A free market subsidized each year by $150 billion in government aid. Note too that half of the output of this free market goes on the shelf and is reportedly never even read.

Plus more than $1.6 trillion, and growing, of student debt and an uncounted harvest of parental/grandparental wealth that seems not to be levied based on free-market principles but, instead, as a cooperative price-fixing agreement at the privates and, to a (slightly) lesser extent at the publics. The charade of "scholarships" is discounting for desired students, sometimes based on academic merit.

Right. Calling the American university system free market is ridiculous. It is pure adherence to an ideology that believes any good thing must be a result of market operations.

Huge research grants, government subsidized student loans, and of course the entire system of state universities which enrolls nearly three times as many students as private colleges and universities.

Looks like a largely government-run and financed system to me.

For just 600K in 1890...

Funding is based on endowments held in perpetuity and government funding. Neither operate as competitive free markets. Endowments are based on principal from people who've been dead for at least several generations.

Universities absolutely compete on a competitive market for talented people: students, athletes, professors, researchers, and even administrators.

Research operates on a very competitive open market. Athletics too. Also, universities are tied to physical cities, and cities do compete with each other as well.

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