Overview

Everyone knows American universities are more expensive and less impressive than ever. But no one has come up with a plan to fix them.

No one...

Until now.

Let Colleges Fail: The Power of Creative Destruction in Higher Education is the hard-hitting instruction manual America needs in order to save its institutions of higher learning.

The solutions proposed herein are unorthodox. They’re stern. They’re tough.

To some, they might even sound utterly shocking.

But they’re bound to work.

Richard Vedder, Senior Fellow at Independent Institute and Distinguished Professor of Economics Emeritus at Ohio University, asks the forbidden question:

Why do we subsidize universities through taxpayer-provided grants and private donor gifts when the institutions are so obviously failing America’s youth?

How can we justify this special status, while businesses offering far more useful goods and services are punished by confiscatory taxes—for simply turning a well-deserved profit?

The history behind these questions is long, winding, and complicated.

But the solutions to our current crisis are not.

In fact, they’re as time-tested as the study of economics itself.

Vedder reminds Americans of the concept of “creative destruction” (famously introduced by economist Joseph Schumpeter)—the idea that, because markets threaten to reallocate resources from unproductive to productive uses by “creatively destroying” failing businesses, markets actually help failing businesses adapt to the market’s ever-changing needs and realities.

It’s sink or swim.

And in the face of necessity, most businesses—or at least, those worth their salt—learn, however painfully, to swim.

And if universities want to survive, says Vedder, they must learn to swim, too.

But because we have cushioned them from the demands, necessities, and realities of public life, American colleges are weak, woke, and unforgivably obtuse. Their eye-stretching price tag just adds insult to injury.

Read this book and discover:

• what universities can—indeed, must—learn from the profit-making private sector;
• why big government needs to get out of the student loan business yesterday ... and what will happen if it refuses to do so;
• why accreditation, though infrequently questioned or critiqued, might actually be unnecessary ... or even bad;
• how privatizing state universities could actually open newer and more affordable finance options;
• what a healthy voucher/scholarship arrangement could look like;
• and much, much more ...

Daring in its analysis, practical in its problem-solving, and thoroughly readable in its prose, Let Colleges Fail is indispensable reading for those who want America’s colleges to thrive once again.

Contents

Introduction

1. Higher Education Is Failing! Ten Cardinal Sins
2. Capitalism Succeeds by Allowing Failures via Creative Destruction
3. Why Are Universities Subsidized, but Firms Taxed?
4. Creative Destruction and Laboratories of Democracy
5. Recent Innovations in Higher Education: Good, but Not Enough
6. Reducing the Government’s Role
7. Reimagining Higher Education: Reducing the Federal Role
8. What Can State Governments Do?
9. Inside Job: Reforming Universities Within
10. Other Reforms: Thinking outside the Box
11. Beyond Instruction: Research and Other Activities
12. Conclusions: Three Key Expressions to Guide Collegiate Reform

Notes
Index

Praise

“Colleges routinely fail to educate their students, produce valuable research, or foster critical discussion, but—thanks to government support—they almost never fail to survive. In Let Colleges Fail, Richard Vedder, one of the world’s greatest collegiate whistleblowers, courageously calls for accountability. If schools can’t pass the market test, government can and should let them go out of business. Letting failed institutions die, though rarely popular, is immensely beneficial for society. And few institutions have failed society more egregiously than higher education.”
—Bryan Caplan, professor of economics, George Mason University

“Failure is an essential part of the process of improvement in any industry. Higher education is no exception. Eliminating the possibility of failure, especially when combined with the federal government’s cartel-like regulatory regime that promotes mediocrity and uniformity, is a recipe for stagnation. Professor Vedder, long recognized as the most creative and bold economist of higher education, has done it again—calling for a more innovative and competitive market for higher education providers that can finally drag higher education into the twenty-first century.”
—Todd J. Zywicki, George Mason University Foundation Professor of Law, Antonin Scalia Law School at George Mason University

“Eighty years ago, there was strong case for mass subsidies for higher education. In Let Colleges Fail, Richard K. Vedder proves that the facts have changed and the old argument no longer applies. The time has come to hold universities to the same standards we hold other corporations. Vedder shows that today most universities are run for the benefit of their staff and faculty at the expense of students and society at large. Far from producing significant positive benefits, many colleges create net losses. But while many experts complain about the state of higher education, Let Colleges Fail is unique in offering a wide range of feasible reforms, big and small, that can cure higher education’s diseases without killing the patient. Let Colleges Fail is the blueprint for building higher education back better.”
—Jason Brennan, Robert J. and Elizabeth Flanagan Family Professor of Strategy, Economics, Ethics, and Public Policy, McDonough School of Business at Georgetown University

“Professor Richard Vedder has been among the foremost critics of American higher education policy for the last quarter century. His writings have repeatedly exposed the mistaken ideas behind the government’s subsidization of college attendance and the harmful consequences of doing so. In Let Colleges Fail, Vedder argues persuasively that the only way for the U.S. to get back to affordable, high-quality education is to allow the invisible hand of the competitive market to work so that schools will succeed or fail based on their ability to satisfy students. Our educational establishment is certain to hate this book.”
—George Leef, director of external relations, James G. Martin Center for Academic Renewal

“After a career as a distinguished university teacher and researcher, Richard Vedder is the perfect whistleblower. He has witnessed firsthand the growth of bloated bureaucracies and the hyper-politicization of colleges and universities for over five decades. Vedder’s diagnosis? Universities have become addicted to taxpayer subsidies to the point where students are no longer seen as the customers and student learning is no longer the focus. Tuitions rise as fast as the politicians can shovel in more money. Meanwhile, too many students are saddled with huge debts while holding worthless degrees. Vedder’s solution? Stop the subsidies and let colleges and universities compete for students, treating them as the customers they are. Those that can’t handle the competition? Well . . . let them fail!”
—Robert A. Lawson, Jerome M. Fullinwider Centennial Chair in Economic Freedom and director, Bridwell Institute for Economic Freedom, Cox School of Business at Southern Methodist University

“Let Colleges Fail examines how excessive subsidies and lack of competition stagnate American higher education—and proposes a radical market-based overhaul. Anyone concerned with improving higher education should read this book.”
—Jonathan Bean, research fellow, Independent Institute; author, Race and Liberty in America: The Essential Reader

“Richard Vedder’s Going Broke by Degree was the national wake-up call that higher ed slept through. His Thirty-Six Steps was a survival manual that too few in the sector followed. Now he has given us a must-read depiction of the consequences of complacency and the upheaval for which many once proud institutions are headed.”
—Mitch Daniels, distinguished scholar and senior advisor, Liberty Fund; former president, Purdue University

“Richard Vedder continues to be our most astute diagnostician of the structural, economic, and functional catastrophe of American higher education in the twenty-first century. He makes a wholly compelling case against further bailouts of a failing system and for allowing bad models to suffer insolvency, leading to creative destruction and to innovations. Vedder is a clear and convincing voice in the midst of our national confusion.”
—Alan Charles Kors, Henry Charles Lea Professor Emeritus of History, University of Pennsylvania; cofounder, FIRE

“Richard Vedder gives the most comprehensive assessment yet of the state, and direction, of American higher education. Bottom line: it’s not good. Vedder considers some of the background reasons for the failures and mistakes, and gives a surprisingly optimistic solution: let failure take its course! The very abjectness of the current state of education is our greatest opportunity, because parents and students are eager for an alternative. Vedder masterfully lays out the problem and outlines a path to redemption.”
—Michael C. Munger, director, Philosophy, Politics, and Economics Program, Duke University

“Richard Vedder, one of our most distinguished students of academia, has once again brought his sharp eye to our increasingly sclerotic system of higher education. Where universities should be places of robust and open debate, they are often enclaves of epistemic closure; where they are supposed to be places of intellectual discovery, students can sometimes emerge almost unscathed by additional knowledge; where they have historically been sources of upward mobility, they are increasingly inaccessible to the poor; where their focus is supposed to be on professors, students, and classrooms, their budgets have ballooned due to administrative bloat. These and other ‘sins’ Vedder identifies have led to a loss of confidence in colleges and universities reflected in declining enrollments and public opinion polls. To revitalize our system of higher education, he contends that instead of shielding schools from competition, they should be subjected to the same forces of failure and rebirth as other enterprises. Vedder comes, then, not as an enemy of American higher education but as a friendly critic who wants to insure that this extraordinary system can remain the envy of the world and a continued source of American exceptionalism.”
—Josh Dunn, executive director, Institute of American Civics at the Howard H. Baker School for Public Policy and Public Affairs

“Richard ‘Darth’ Vedder once again aims an intense beam on higher education with his fourth book from Independent Institute. Despite a tour de force critique of the Fed-fed administrative bloat and manifold other inefficiencies of universities and colleges, he offers some public-choice inspired optimism for renewal of their original purpose of advancing knowledge and spurring a ‘national revival.’ Remove government subsidies and invite free market competition to induce Schumpeterian ‘creative destruction’—of course!
—John Sommer, Knight Distinguished Professor Emeritus, University of North Carolina at Charlotte

“Something’s wrong with America’s colleges. After decades of growth, enrollment has been declining since well before the pandemic. Among those students who do bother to enroll, too many walk away without a degree; many those who stick it out and graduate do so without having learned much of value. In this readable, engaging book Richard Vedder diagnoses the problems vexing higher education and makes a compelling case that it’s past time to take many of our nation’s failing campuses off life support. For those of us who have built careers in the academy, it’s a somber yet unignorable message.”
—Jacob L. Vigdor, professor of public policy and governance, University of Washington

“Richard Vedder’s Let Colleges Fail is a treasure map. In his first five chapters, he traces the routes past both the glittering facades and the waste heaps of contemporary higher education. In the next seven, he plots the ways in which we can recover this institution that is so vital to our prosperity and national well-being. In those first five chapters, Vedder brilliantly shows that the myriad ills facing American higher education—tuition increases far above inflation, academic standards below international norms, administrative bloat, politicization, intellectual sterility—have as their common source the deep dependence of the colleges on federal money. The idea that higher education is a ‘rent seeker’ that is held captive by the government is not new, but Vedder’s presentation of it is lucid, powerful, and persuasive. When he turns to his proposals to reform education by restoring it to the true marketplace of ideas, he is sober, wise, and practical—and equally persuasive.”
—Peter Wood, president, National Association of Scholars

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