Intelligent observers of American higher education know that colleges generally are in great trouble: falling enrollments, declining public and political support, often dubious outcomes, and excessive tuition and other costs. Most depressing, the traditional tolerance of widespread viewpoints and commitment to free expression seem to have declined substantially.

While one finds a few encouraging stories dealing with these issues at existing colleges and universities, the overall picture is bleak. It seems that current institutions are doing too little, if anything, to fix the problem. At many, the outlook is palpably worsening.

In the competitive, free-market, private-business sector, lags in innovation or qualitative improvement are remedied by Schumpeterian “creative destruction” and by new competition. Hence Eastman Kodak has nearly died in photography and Tesla has prospered in automobiles as a consequence of changes in technology and taste.

So, too, can new entrants into the collegiate market potentially help to reverse the declining higher-education industry in America. I recently attended a summit of higher-education thinkers and philanthropists sponsored by the new University of Austin (UATX). UATX will admit its first class in the fall of 2024, but it is already doing a number of academic activities—for example, running short summer seminars for crackerjack students at other schools—as a trial run for a future as a full-fledged university.

It is not an ordinary group of academics who are leading UATX’s inception. The founding president, Pano Kanelos, was the former president of the “great books” college St. John’s (Annapolis and Santa Fe). Prestigious academics like Charles Calomiris (Henry Kaufman Professor of Financial Institutions at Columbia University) are taking pay cuts to join, full-time, the management and instructional team at UATX.

Others at the meeting who are assisting in the creation of the institution included the brilliant historian Niall Ferguson (Stanford and Harvard), John Tomasi (until recently at Brown, now running the Heterodox Academy), and the award-winning Harvard economist Roland Fryer, who gave a stirring address to the audience. It is my understanding that former Princeton classicist Joshua Katz will be joining the faculty.

It’s an academic dream team.

While UATX has a long-term goal of being a serious university like Princeton or Chicago, with thousands of students, it will probably open next year with a high-quality freshman class of 100-200. All students will study, together, a common curriculum for the first two years, reviewing in detail the evolution of modern civilization and developing the tools to help advance it in the future. During their last two years, students will branch out into more advanced study in specialized fields.

The school plans to break with convention in a number of ways.

For one thing, there will be no faculty tenure. Nor will there be any constitutionally planned parliamentary bodies at UATX (i.e., faculty and student senates), as is common at most schools. But there will be an adjudicative council (an academic judiciary) to resolve the inevitable occasional brouhaha.

First and foremost, as the school’s mission statement (which has undergone exhaustive review, including by the attendees at the conclave) clearly proclaims, is UATX’s “commitment to the pursuit of truth” and its appreciation of vigorous but civilized debate fostered within “an environment of intellectual pluralism.”

The school has already amassed an impressive group of entrepreneurs and philanthropists committed to creating more than another Texas-centric liberal-arts institution but, rather, a national, indeed international, respected innovator in higher education.

At a reception at the estate of board chair and high-tech entrepreneur Joe Lonsdale, I saw some of the best and brightest names in American capitalist innovation mingling with an equally distinguished group of academics (including professors from schools not mentioned above—for example, the University of Chicago). There were scientists and classicists, artists and economists.

Yet all believe, as I do, that American higher education is broken and that reform within current institutions is problematic. There are too many vested interests that will fiercely fight efforts at improvement .

One huge problem is the lack of intellectual diversity and tolerance of alternative perspectives on campus. Another, older problem is the vast inefficiency in the system (UATX vows to have a lean administrative structure, including no DEI apparatchiks). Some schools overly obsess over ball-throwing contests (i.e., football or basketball). Nationally, grade inflation has contributed to a decline in work effort, diluting the traditional American virtue of excelling at near-impossible tasks. The list of academic sins is long, and starting new institutions initially free of those sins strikes me as a good idea.

Yet it may not be enough, particularly given the huge role played by governments, especially the Washington bureaucracy, in American academic life. Educrats on Maryland Avenue in D.C. (home of the U.S. Department of Education) issue rules that submissive university executives obey and often enthusiastically embrace, such as ones dictating how colleges should handle issues relating to allegations of student sexual misconduct. These rules are often fundamentally out of sync with Anglo-American jurisprudence dating back to the Magna Carta.

It seems to me that, currently, there is an implicit contract between the mainline higher-education establishment (represented by organizations such as the American Council on Education or the Association of American Universities), their rent-seeking schools, and the federal government.

The Feds, now represented by the Biden Administration, will bail out the universities (through, e.g., pandemic-related funds) in return for support in the form of leftish ideas, personnel (to run government bureaucracies), and campaign contributions from faculty and staff. Growing political uncertainties potentially jeopardize that implicit Unholy Alliance, and a Republican takeover of government might lead to an even bleaker future for traditional colleges and universities, improving the prospects for new innovations like the University of Austin.

Another issue may be accreditation. As I have elsewhere argued, accreditors are cartels that restrain entry into the realm of higher-education services. UATX will either have to obtain institutional accreditation or try to innovate by saying, “We don’t care about accreditation,” a gutsy but certainly not risk-free approach. At this point, accreditation is still an undecided question for the new institution’s officials.

American exceptionalism has evolved out of new ideas and innovations that occur by taking risks. UATX is in that tradition, and my impression is that it should be taken very seriously.