Labaree on the success of American Universities

David Labaree discusses the 'success' of American universities in a very interesting article (available in the recent papers section of http://www.stanford.edu/~dlabaree/). Excerpts:
"In most countries around the world, higher education is under direct control of the state, but U.S. colleges and universities are able fend off state control by acting as semi-independent entrepreneurs in the market.
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The market came late in world history, but it was there at the beginning of American history.
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By 1910, we had nearly a thousand colleges and universities with a third of a million students at a time when the 16 universities in France enrolled altogether about 40,000 students, a number nearly equaled by the American faculty members at the time.
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The market environment, Trow argues, fostered a peculiar kind of organization and governance in American colleges from the very start. Unlike their European counterparts, early American colleges emerged as corporate nonprofit entities, with state
charters but only modest state support. By the middle of the 19th century, states had founded a number of colleges and universities, which quickly became the growth sector in American higher education; but these formally public institutions received only a portion of their funding from the state. By the start of the 21st century, a state university is blessed if half of its income derives from state appropriations; major public research universities may receive as little as 10 percent from this source. The rest comes from donations, endowment, research grants, patents, and, most important, tuition. All of these
other sources of revenue are largely independent of state control, and pursuing them calls for a form of organization that allows, even mandates, leaders of institutions of higher education to operate like entrepreneurs in the educational marketplace. To survive and prosper, a college or university needs to be adept at attracting the tuition dollars of students, the donations of these students after graduation, and a variety of other revenue streams like grants and patents. In the 18th
and 19th centuries, the primary source of market-based revenue was students, and this has continued to be the case in recent years, even after other sources of income have grown substantially. "
"A market-oriented system of higher education has a special dynamic that leads to a high degree of stratification.
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This stratified structure of higher education arose in a dynamic market system, in which the institutional actors had to operate according to four basic rules.
Rule One:
Age trumps youth. It is no accident that the oldest American colleges are overrepresented in the top tier of institutions today.
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Rule Two:
Rewards go to those at the top of the system. This means that every institution below the top tier has a strong incentive to move up the ladder. It also means that top institutions have a strong incentive to fend off competitors and preserve their
advantage.
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Rule Three:
It pays to imitate your betters. This means: the way to get ahead is to adopt the behaviors of those above you.
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Rule Four:
At a certain point, it is more prudent to expand the system by creating new schools rather than increasing enrollments at existing schools. ....Concerned about protecting their institutional advantage, they have no desire to sully their hard-won distinction by admitting the unwashed.
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these rules have shaped the historical process that produced the present stratified structure of higher education. This structure has four tiers."
"The Ivy League colleges emerged in the colonial period, followed by a series of flagship state colleges in the early and mid 19th century. These institutions, along with a few social climbers that emerged later, grew to become the core of elite research universities that make up the top tier of the system. Schools in this tier are the most influential, prestigious, well funded, exclusive, research-productive, and graduate-oriented – in the U.S. and in the world. The second tier emerged from the land grant colleges that began to appear in themid to late 19thcentury. They were created to fill a need not met by existing institutions,expanding access for a broader array of students and offering programs with practical application in areas like agriculture and engineering.......The third tier arose from the normal schools, established in the late 19th century to prepare teachers......The fourth tier emerged from the junior colleges that first arose in the early 20th century and eventually evolved into an extensive system of community colleges......each of these institutional types occupies a particular market niche with its own parallel hierarchy, ranging from low to high status, from inclusive to exclusive. ....As a market
driven system, American higher education has developed a four-tiered hierarchy of institutions. These tiers are distinguished from each other by degree of access (which is greatest at the bottom) and degree of social advantage (which is greatest at the top). But one thing the three top tiers have in common is convergence around a single organizational ideal, the research university. "
There is quite a bit more detail and comparisons with the medival universities and also a discussion of William Clark's "Academic Charisma and the origins of the Research University."
His concluding paragraphs:
"In this paper, I have chosen to focus on the reasons for the success of American higher education, where success is narrowly defined as its ability to attain a dominantposition internationally in institutional rankings, financial and human resources, and
academic drawing power. Success in these terms, of course, does not come without consequences. The complexity of the American system, its emphasis on institutional autonomy, its dependence on the market, its adoption of contradictory political goals, and its governance by mixed models of organizational authority combine to produce a set of
educational and social problems that I have not examined here. This structure leads to an extreme form of stratification in American higher education, which preserves social privilege at the same time that it provides social opportunity and which often puts a premium on getting ahead rather than getting an education. It protects the university from overly intrusive and confining state control, but it does so by leaving the universityat the mercy of the consumer. In combination with the extreme stratification of the system, dependency on the consumer leads to an emphasis on acquiring socially salient credentials more than gaining socially useful learning, especially at the undergraduate level. It leads to a grossly inefficient system of higher education, in which our extraordinary investment of public and private funds in the university often subsidizes private ambition more than social need. And it creates a glut of university graduates, whose numbers frequently do more to increase the credential requirements for existing jobs than to increase the productive skills of American workers or the political
capabilities of American citizens. This kind of critical analysis the American system of higher education and its consequences is readily available elsewhere, including in my own work (Labaree, 1997; 2004). But even if you admit the social and educational pathologies of the system, as I do, I think you may also want to admit, however grudgingly, that the evolution of this system has been a remarkable institutional success story."
Labaree's collected papers are recently published under the title "Education, Markets and the Public Good" but I have not seen this book yet.