I think Arthur Stinchcombe summarizes the interesting aspects of academia in his book "Information and Organizations":
1. Colleges convert prestige into tuition dollars, donations and grants. 2. Prestige is based on smarts/quality, which is hard to measure. 3. Thus, academic managers (deans, provosts, etc) exert control not by determining work output but controlling resources such as office and lab space and teaching loads and let the professors figure out who is the smartest/best. 4. Academic quality is measured by reputation because deans can't determine for themselves if a professor is doing good work. This creates the need for a stable academic community (the "discipline") which deans can survey when trying to see if a given person should be promoted. 5. This is a mechanism that emerged from the very unregulated environment of the late 19th centure/early 20th - which is when the American university was born. I should also add that American academia is fairly unregulated compared to every single other national system. The federal gov't involvement is concentrated mostly in subsidizing undergraduate education, some handouts to humanities/social science professors and developing a broad scientific base of researchers that can be tapped into in times of war. Fabio > Pete Boettke wrote: > >I am shocked that you would claim that academics is an unregulated > >industry ... shocked. > >If I told that there was an organization that had the following > >characteristics what you say: > >1. The owners do not manage the system > >2. The workers make most of the managerial decisions > >3. Consumer do not pay the full cost of the service > >Well, welcome to the modern public university. > >Outside of the role of public universities, there is also state funding > >of most private universities (at the research level).