Elite higher education in America has long been a Veblen good—a commodity that obeys few, if any, conventional laws of economic activity. In some cases (chiefly among the children of the serene professional elders perusing the Sunday New York Times), the higher the sticker price of a particular college or university, the more attractive it is. Raise the price and then offer a “discount,” and applications will fly in and better students will enroll. Private colleges and universities figured out this marketing strategy about twenty years ago. That’s a major reason that private college tuition has skyrocketed over the same time span, often at more than double the rate of inflation. Because university administrators know they have an essentially captive client base, they can mark up their sticker prices with impunity.
Economists call things “Veblen goods” when they violate standard models of supply and demand—mainly in cases when an ongoing spike in price works, perversely, to increase demand. Veblen goods are usually luxuries, or at least luxury versions of goods that might be considered necessities in general. Higher education seems to comport with the trend: as the prospects dim for earning a decent wage and forging a comfortable life without a bachelor’s degree, we are told we must increase the number of bachelor’s degrees floating around the economy. And as that number increases, some versions of the degree have become even more valuable in the eyes of tastemakers and nervous wealthy people.
Thorstein Veblen described the cultural and economic effects of the irony of prestige in his best-known, bestselling book, The Theory of the Leisure Class (1899). But Veblen did not call Veblen goods “me goods” or define the phenomenon himself. In a 1950 paper, economist Harvey Leibenstein coined the term “Veblen effect” to explain why people pay more money for goods of no discernably higher quality. Over time, economists began to refer to such goods as “Veblen goods,” a legacy designation that would doubtless exasperate its namesake.
Americans obsess over higher education, seeing it as the best and perhaps only route to the good life
Even a cursory glance at the landscape of today’s higher learning shows how desperately we need a critic like Veblen now. Americans obsess over higher education, seeing it as the best and perhaps only route to the good life. The rest of the world envies our collection of institutions and scholars. Meanwhile, stunted state leaders like Wisconsin governor Scott Walker, Louisiana governor Bobby Jindal, and Florida governor Rick Scott actively dismantle their states’ once-proud public research universities and complain that curricula don’t train workers for whatever “today’s economy” might welcome. Were he around to witness these sorry specimens of public-sector leadership, Veblen would have dismantled their short-sighted rhetoric, arguing the case for the American republic to hew more closely to the model of Athens than Sparta.
Alas, the current arguments over higher education rarely rise above the framework of consumerism and individual “return on investment.” Veblen would have resisted that reduction as well, as indeed he did in his own time.
He also would have cast a cold eye on the present dynamic of prestige in the U.S. higher education marketplace. If more than one out of three American adults now has a bachelor’s degree, the only way to maintain a premium value on some degrees is to attach artificial prestige to them. The markers of prestige include a premium price tag. Tuition and fees at selective and private Bennington College in Vermont amount to more than $48,000 per year. Tuition and fees at public Massachusetts College of Liberal Arts, just twenty-three miles away from Bennington and with just as good access to skiing and Phish bootlegs, are only $9,065 per year for Massachusetts residents. So why would someone pay $39,000 more per year—almost $156,000 over four years—to attend Bennington? There are certainly differences between the institutions. Bennington is notoriously eccentric, and students there are forced to make up their own educational programs—something that more than a few of them aren’t equipped to handle. But what justifies the premium?
Prestige is part of the answer. Attending the school that produced Bret Easton Ellis and Donna Tartt might inspire a young person in ways that sharing a degree with urban fantasy novelist Anton Strout or former Major League pitcher Ken Hill, the most notable alumni of MCLA, does not. Parents might boast of a child attending Bennington (and their own ability to foot the bill) with stickers on their Audis; an MCLA sticker, meanwhile, would look much more at home on the back of a Kia Rio.
Is the quality of instruction better at premium private schools? Are the facilities better? Is the weed better? Is one school more queer-friendly than the other? Perhaps. But to understand how the good becomes all Vebleny, we must acknowledge that few students who attend expensive-looking private institutions actually pay the sticker price.
Still, the sticker prices matter—a lot. Elite institutions have no incentive to lower their advertised fees. They reject as many as twenty times more applicants than they accept, so even if a handful of them grow wise to the madness, there are plenty more high achievers begging to don a Tufts sweatshirt or join a Wesleyan fraternity. Meanwhile, every spring, hundreds of eager high school seniors get letters from Emory promising that they earned a massive discount off the $45,700 tuition price. Who could resist a sale? Get a $183,000 private education for a mere $120,000! It’s not what you spend, after all—it’s what you save.
The anxiety that wealthy (and, increasingly, not-so-wealthy) families bring to the college admission and selection game is absurd and unhealthy. It begs for the sort of sardonic critical wit that Veblen brought to all his subjects one hundred years ago.
Instead, we have mild boluses such as Where You Go Is Not Who You’ll Be: An Antidote to the College Admissions Mania, an earnest book by consistently boring New York Times columnist Frank Bruni assuring parents that their children can have great lives if they resist the siren songs of Amherst or Brown and opt instead for sheepskins from the University of North Carolina. Most of the book consists of testimony from successful CEOs and from Republican governors like Chris Christie and Nikki Haley, who attended public universities and did just fine. Bruni mentions the word prestige a few times, but he fails to skewer or even analyze the absurdities of the higher education game in his gentle tome. Because he fails to grasp the source of the “mania,” he fails to deflate it. And small wonder: Bruni’s employer, the New York Times, with its Ivy-saturated editing and reporting staff and its constant coverage of goings-on in New Haven, Cambridge, and Dartmouth, is part of the problem.
Shearing the Sheep
But the malady of today’s university spreads well beyond the Ivies. Tuition has been soaring at the great state colleges and universities that have long served as engines of social mobility and the source of useful knowledge for those children of the hoi polloi who wouldn’t know a dining club, a legacy admission, or a rowing scholarship if it were to smite them in the face.
In many dissections of the university’s ills, we hear that tuition has risen at some alarming percentage over the past thirty years. This is misleading, largely because in-state tuition was close to free at many universities right up through the 1990s. When I attended the University of Texas in the late 1980s, in-state tuition was less than $1,000 per year. Now it’s about $5,000 per year. It’s still a great deal—only $4,000 more without adjusting for inflation. But that’s a 500 percent increase since 1990. There are several reasons why public universities have had to raise prices (and can’t offer the tricky discounts that private universities do): federal science funding has evaporated; mandated administrative and legal costs have risen; teaching hospitals and medical schools are losing money; and—most significantly—states have been slashing support for higher education since 2001, pretty much the exact moment when state tuition started rising sharply. Essentially, state legislators have been privatizing the cost of higher education and putting the burden on students and university staff while still demanding that these institutions enrich the state with an educated labor force and more insect-resistant tomatoes.
Who could resist a sale? Get a $183,000 private education for a mere $120,000!
This is fundamentally a political problem. But the technologically optimistic pundits proffering MOOCs and for-profit degrees as panaceas for the university’s plight seem deaf to politics—or rather, any version of a civic politics that doesn’t follow the incorrigibly technocratic policy playbooks of an Eli Broad, a Jeb Bush, a Barack Obama, or a Bill Gates.
You can see the insidious reach of this logic in the repurposing of formerly stalwart smaller regional public schools into aspiring prestige brands—a trend that I call “mission creep.” The first stage of this process is usually a name change—e.g., Southwest Texas State University to Texas State University, a bit of marketing alchemy finalized in 2013. The schools then propose to institute more graduate degrees and professional programs than their current statuses and budgets justify.
As mission creep produces crucial returns among these regional schools, it has come to grip many vocational or two-year schools into the bargain. Community and junior colleges add four-year bachelor’s degrees and freshen up their names; in 2003, for example, the former Miami-Dade Community College became Miami Dade College.
Mission creep is driven by student demand (the terrible reality that America has no use for non-degreed workers any more) as much as by the lure of prestige. Still, students and parents don’t stoke the hard sell behind institutional mission creep; that trend stems mainly from appeals by alumni and board members who long to see their modest college experience rise in value later in life.
By the time the mission-creep mandate reaches an afflicted school’s top administrators, they simply accept it as the common currency of academic life. Most of us who joined the scholarly vocation chose it for its distinctive cultural economy—one that values the promises of intellectual idealism and public service over the prospect of monetary remuneration. Most college and university presidents, by contrast, are just savvy and jaded professors. Their sense of the game, their habitus, as sociologist Pierre Bourdieu would say, entails a dance and struggle for their faculty and staff to win awards, notability, athletic championships, Nobel prizes, and op-eds in the New York Times.
The prestige race is amplified by the retreat of public funding. As federal grants for science shrink and state support for university operating costs disappears, colleges and universities increasingly turn to wealthy alumni to fill the void. This creates perverse incentives—which in turn drive the price of the Veblen good known as a university diploma still higher. Few alumni, not even the Koch brothers, donate to institutions to reap benefits for themselves. They do so to see work they believe in done in a high-profile way in a building that bears their name. Accordingly, institutions must alter their research agendas as well as their built environments to suit the whims of billionaires. Veblen would have loved to describe all the ways “David Koch” shows up on the MIT campus and “Maurice Greenberg” (of AIG infamy) marks NYU. My own salary and research are heavily supplemented by a generous gift from Tim Robertson, son of Christian Broadcasting Network mogul the Reverend Pat Robertson.
The Credentialing Class
It’s now easier than it’s been for quite some time to piece together just how Veblen foresaw many of the ugly market convulsions currently assailing the American university scene. As it happens, the Johns Hopkins University Press has just published an annotated edition of Veblen’s long out-of-print 1918 classic, The Higher Learning in America, which Veblen composed after seeing the universities he loved transform themselves rather quickly, in the first decades of the twentieth century, into huge machines devoted to serving the business community’s short-term demands.
In training his unsparing eye on his own academic habitat, Veblen gave us an early glimpse of the forces conspiring to create the corporatized modern university. The Higher Learning in America extends the basic critique of the dominance of “pecuniary emulation” advanced in The Theory of the Leisure Class to what, in theory, should be one of the strongest safeguards against the complete triumph of business civilization: the conduct of independent and fearless academic inquiry, funded and administered on its own terms, not the market’s. If much of Veblen’s prior work was devoted to mordantly documenting the ways in which the uncritical worship of nonproductive wealth had become the perverse aim of American capitalism, his study of the academy’s emerging failings and commercial compromises is a somber eulogy, delivered more in sorrow than in anger—which is not to say that it fails to rouse plenty of anger too.
As a result, Veblen’s testimony makes for a much sharper and more nuanced account of the crowding out of genuine scholarly values than we’re used to hearing from our present crop of higher-education critics, most of whom focus on the transmission of knowledge to indebted yet under-challenged undergraduates.
Intellectual historian Richard Teichgraeber of Tulane University offers a solid and lucid introduction to the edition, placing Veblen’s work within larger debates of the moment and Veblen’s own experiences at American universities. Even more valuable, Teichgraeber has provided rich footnotes to the text that refer us to other writings by Veblen and that define some of the old sociological satirist’s odder and more dated phrases.
Veblen rarely wrote tirades, although he was known to embed screeds within his longer works. The Higher Learning in America was composed in fits and starts over a decade as Veblen moved among universities, while also serving a short tour of bureaucratic duty in the Wilson administration. So while its voice tends to shift as the author takes up some new brand of mogul abuse or bureaucratic absurdity, Veblen’s book nevertheless serves as a coherent and bracing critique of higher education at the dawn of the twentieth century. We should not be surprised to learn that many of the issues that attracted Veblen’s critical eye are still very much with us today. We should also be relieved to realize that—perhaps in response to Veblen’s own intervention, together with the work of a vocal team of academics such as John Dewey and Frank Clarke, the founder of the American Chemical Society—American higher education corrected for some of the excesses he called out in his jeremiad.
So we should read The Higher Learning in America as a loving scolding of higher education rather than a vicious takedown of it. As Veblen pressed his case for progressive reform, he issued a prescient warning about the tensions between the high ideals of the research university, expressed as “disinterested instruction,” and the practicalities of training a labor force so that industry need not spend its own money doing so.
The “learning” as Veblen conceived it in The Higher Learning in America occurs among scholars, not merely—or even primarily—among students. Veblen warned that by marrying undergraduate colleges with graduate research institutions, universities were undermining their mission to serve the greater good. (Here, Veblen was bearing indirect witness to the virtues of his former employers, Johns Hopkins and Chicago, both of which were initially devoted to pure research at the graduate level, without any undergraduate arms.) If they continued promiscuously to merge their graduate and undergraduate operations, Veblen warned, universities would always be tempted to pamper youth, play to the crowd, and chase whatever business leaders claimed were the skills of the new economy (because the economy is never, ever, old).
He was right, of course. Veblen’s keen historical mind traced continuity where business leaders saw only rupture (or as they now fashionably term it, “disruption”). But Veblen could not have foreseen how undergraduate teaching now supports graduate work by giving graduate students responsibilities that help train them as teachers. It enlivens the university environment and gives it a clearer stake in public life.
And Veblen could not have seen exciting teaching initiatives that involve undergraduates directly in scientific research, thus extending the values of “the higher learning” to the younger among us. Nevertheless, his description of the tension inherent in the modern college-within-a-university was prophetic in its own right. He warned that folding colleges into universities would animate a “freak of aimless survival”—a good working definition of the modern multiversity, which has bred its gargantuan sports programs to serve as a sluice for alumni donations, and which relies on enormous targeted subventions from the corporate world to carry out research that in many cases is anything but disinterested. The twenty-first-century university is a super freak, in fact—the kind you don’t take home to mother.
Veblen’s strongest warning, however, was against the merger of professional schools with the scholarly work of the university. Veblen saw his old nemesis, prestige, at work here as well. Veblen distinguished between scholars such as himself and those who could actually do things in the world: lawyers, business leaders, engineers, educators, journalists, and clergy. Each of these clubs of “men of affairs” created their own schools to regulate admission to their respective guilds and ensure standard knowledge among practitioners. The progressive movement toward professionalism rested on universities playing along and enabling both guild protectionism and outsourced training.
The Low-End Theory
Yet Veblen was well aware that the roots of American higher education were similarly vocational. Harvard, Yale, and Princeton were founded to train and indoctrinate clergy. The colleges that dotted the Great Plains were launched to train teachers. But Veblen saw the ideal German model of the research university, as exemplified in the founding of Johns Hopkins and Chicago, as a public good in its own right, one that was justified chiefly by its pursuit of disinterested knowledge. He saw the rush to incorporate professional schools into his beloved research universities as folly, as it would degrade both the “higher learning” of the university and the “lower learning” of “the life of fashion or of affairs.”
Veblen warned that pure, disinterested research would be corrupted by the incentives and pressures that the leaders of university boards—all hopelessly prosaic “men of affairs”—pressed on college presidents and faculties. Such board leaders, and the teachers at the professional schools they celebrate, are “impatient of any scientific or scholarly work that does not obviously lend itself to some practical use.” This Veblenian prophecy, too, has been borne out fully.
Great “disinterested” research still can come out of the American academe. But it’s less common all the time, as more and more university funds come from politically directed “big science” projects and from donations earmarked to address the maladies that afflict the wealthiest Americans.
Not long ago, things were better. Between Veblen’s time and ours, state, national, and university leaders recognized the tension Veblen described. So, from about 1950 through 2000, the federal government generously supported research that had little obvious practical use. Much of that, including the research that sparked nanotechnology and personalized cancer treatment, ultimately yielded practical uses. For a while, we considered ourselves a rich and wise enough nation to forego short-term results. We were comfortable pursuing knowledge rather than vapid “deliverables” and “learning outcomes.” We were a nation worthy of curiosity. We were striving to be less like Sparta and more like Athens. Now that’s all changed: Sparta had learning outcomes; Athens learned.
According to Veblen, professional schools suffer, too, when they are attached to the cultural imperatives of the university. “They are, without intending it, placed in a false position, which unavoidably leads them to court a specious appearance of scholarship, and so to invest their technological discipline with a degree of pedantry and sophistication,” he wrote. He could not have described the work of Harvard Business School professor Clayton Christensen any better.
Veblen’s key insight is that America is both practical and idealistic—and simultaneously arrogant and deeply insecure about its status. He argued that these contradictions are all thrown together in the modern university without the benefit of any workable game plan to harness them in the service of a higher civic synthesis. Nor is it clear that such a synthesis would be either stable or comfortable for an institution so long accustomed to being many things to many people while serving many conflicting constituencies all at once. He might be pleasantly surprised by how well American universities—especially the large public ones—have at least managed these contradictions and the political constituencies that support each warring faction within their walls.
In a sense, though, the institutional confusion that hobbles the American university is the same one that defines much of our own cultural outlook. Americans both resent and embrace prestige, and both defer to and ridicule intellectual sophistication. Americans worship technology but dismiss science. These contradictions drive us crazy. They drove Veblen to clarity. We should seek to reclaim Veblen’s brand of unsentimental insight, together with his high analytic tolerance for contradiction and irony. Most of all, though, we need to recover his commitment to the academy as a repository of values that rise above efficiency and expediency.