In 1918, a group of student protesters at Argentina’s University of Cordoba managed to convince the government to grant the school autonomous status: agents of the state wouldn’t be allowed to set foot on their campus uninvited, and all curriculum decisions would be made by professional unions rather than government committees. The reforms quickly spread through much of Latin America, and so it is that universities have been hotbeds of resistance and dissent through much of the continent’s tumultuous political history. In fact, the strength of this tradition of university autonomy is strong enough that even beleaguered dictators are reluctant to violate it. Nearly every governmental coup in Bolivia starts the same way: the army simply barricades the universities, hoping to keep the academic radicals contained, while the military does its work.

Compared to this, American universities seem relatively placid. While students and faculty may flirt with radicalism and protest, university administrators are tradition-bound and conservative as a breed—generally reluctant to ruffle feathers or embrace struggles for social causes.But this is not to say that the American academy doesn’t have its own form of autonomy.In a nation enamored like few others of an ideology of free-market capitalism, the university, unfettered by the necessity to earn a profit, stands (or used to stand) as one of a handful of institutions largely immune to the vicissitudes of the market, where academic freedom trumps profit margins, where currency rests in ideas more than in lucre.

In University Inc. (Basic Books), a thorough and disquieting portrait of the state of American higher education, Jennifer Washburn argues that this separateness from the market, and the distinct ethos of free inquiry with which it dovetails, is threatened by a creeping corporatism. “In higher education today,” Washburn writes in the introduction,

“a wholesale cultural shift is transforming everything from the way universities educate their students to the language they use to define what they do. Academic administrators increasingly refer to students as consumers and to education and research as products. They talk about branding and marketing and now spend more on lobbying in Washington than defense contractors do.”

It wasn’t always like this. With impressive detail and mountains of data, both anecdotal and systematic, Washburn traces the confluence of factors—legislative changes, cultural trends and shrinking public resources—that have produced universities increasingly funded by and acting like large corporations. Washburn takes stock of the costs—to parents, students, faculty and the public at large—that such a shift entails.

The American university’s connection to industry and commerce has been a complicated one. Early universities, like Harvard and the rest of the Ivy League, were founded for the purpose of training gentlemen preachers and soon became redoubts of the Northeastern aristocracy. In the mid-nineteenth century, however, a populist ethos swept higher education. Land grant colleges popped up across the country, and with them came a new focus on universities as places of practical innovation to better serve the needs of the burgeoning industrial and agricultural sectors.

This model of the university as a handmaiden of industry gave rise to a whole host of new problems; robber barons lavishly contributed to campuses, but their checks often came with more than a few strings attached. During the 1920s, MIT was able to the build the nation’s fifth-largest endowment in a short period of time by soliciting funding from industry, but the administration soon drew criticism from the faculty, which charged that too many of the school’s contracts involved trivial industrial development projects of little academic value, such as developing leak-proof oil containers for the Vacuum Oil Company. “By the end of the decade,” writes Washburn, “even MIT’s trustees began to grow uneasy, fearing that the Institute was losing its ability to remain competitive in academic science.” There were political prices to be paid as well: professors like Stanford’s Edward Ross, who spoke out on behalf of the late-19th century labor movement, found themselves out of a job when the industrialist donors got wind. “I must confess,” wrote Jane Stanford, the widow of the late railroad tycoon who founded the university, “I am weary of Professor Ross, and I think he ought not be retained at Stanford University.” Eventually, she got her wish.

Led by John Dewey, the American Association of University Professors pushed for reforms aimed at vesting more power in professors and ensuring academic freedom. Thus was born the cluster of academic norms we’ve come to associate with the modern American university: decentralization of authority in individual departments, faculty control over hiring and the ultimate thumb in the eye of market influence, life tenure. In addition, universities drew away from industry, whose largesse was replaced by a host of federal agencies—the National Institute for Health, the National Science Foundation and the Centers for Disease Control—that disbursed massive amounts of research funds. This “New Deal for Science” led to a period of robust scientific development and innovation and pushed America to the forefront of global research in science and medicine.

Over the past two decades, however, several factors have upended the post-war institutional norms under which academia and industry kept each other at arm’s length. The single most important of these is the rise of what Washburn calls “free-market fundamentalism,” which disfavors public works and collective endeavors as wasteful and inefficient and views unconstrained markets as the best means of producing optimal social outcomes. “From the operation of prisons to the provision of welfare services to the poor to the conduct of military operations in Iraq,” Washburn writes, “an ideology of free-market fundamentalism has led some ideologues to promote the privatization of everything of late.”

Out of this ideology have hatched several concrete legal and policy shifts: an evolution of intellectual property law towards allowing patents on a broader and more basic set of ideas (including the landmark 1980 decision Diamond v. Chakrabarty, that allowed the first patent of a living organism); a sharp decline in both state and federal support for higher education; and a fairly obscure but radically important piece of legislation called Bayh-Dole.

In 1955, when Edward R. Murrow asked Jonas Salk who owned the patent on his famous polio vaccine, he responded: “Well, the people, I would say. There is no patent. Could you patent the sun?” Under the Bayh-Dole regime, university administrators would likely view such a response as laughably naïve. Named after senators Birch Bayh (D-IN) and Bob Dole (R-KS) and signed into law in 1980, Bayh-Dole executed a Copernican revolution in universities’ control over intellectual property. Prior to the act, government generally retained ownership over the products of taxpayer-funded research and made them broadly available to the public. Bayh-Dole, however, allowed universities and individual researchers to patent and retain the title to publicly-funded research. This meant that discoveries once part of the public domain were now private property.

Bayh-Dole’s supporters argued the bill would increase the commercialization and application of a wide variety of discoveries that had been collecting dust on the shelves. It is unclear whether that has been accomplished (or whether the problem it was supposed to remedy ever existed), but Bayh-Dole has ushered in an explosive growth in “technology transfer,” a process by which academic discoveries are patented and then licensed to businesses, often exclusively. The difference between general licenses and exclusive licenses may seem like a technicality, but their relative impact is profound. A general license is like a toll road anyone can drive on for a small fee whereas an exclusive license is like a private road open only to its owners. Imagine what your morning commute would look like if the government decided to convert a bunch of toll roads into private ones. Any politician who advocated such a change would quickly find himself looking for a new job. But that’s essentially what happened to the field of basic research, with nary a peep of dissent from either political party.

Now able to directly reap the economic benefits of research investments, business opened its purse-strings: from 1980 to 2001 corporate research support grew from $264 million to $2 billion, faster than any other source, and universities raced to open up Technology Transfer Offices in hopes of turning their professors’ best ideas into cash through lucrative licensing deals, often to start-ups in which the university owned equity.

Washburn argues that in privatizing the public domain, universities are eating their seed corn. By eroding the “knowledge commons” they destroy the very platform that undergirds much of the innovation they are now so frenetically trying to leverage for profit. Not to mention that many, if not most, of these discoveries have been underwritten by taxpayers, who are now forced to pay twice for innovations: once for the research and a second time for access to the inventions.

She also convincingly demonstrates that the craze for patenting of university discoveries and opening technology transfer offices is, for the vast majority of universities, a fool’s errand. “In 2002, universities collected an impressive $959 million from the commercialization of drugs, software, and other academic inventions. But the lion’s share of the revenue—two-thirds—went to just 13 institutions, and largely stemmed from a small number of big hit inventions. Once this aggregate figure is broken down, it becomes apparent that more than half the nation’s academic tech-transfer offices very likely do not break even.”

Even so, the mere promise of riches exerts a powerful pull on both administrators and enterprising professors, some of whom now view themselves as entrepreneurs as much as scholars. They are inclined to steer funding towards those projects that hold out the best chances of commercial, as opposed to academic, benefit. For those who might think the two are indistinguishable, keep in mind that the University of Florida’s windfall licensing fees come from that electrolyte-rich wonder of modern science: Gatorade.

The fact that many professors now also have biotech start-ups on the side creates conditions ripe for conflicts of interest. But the fallout from such conflicts pales in comparison to what happens when corporations insinuate themselves into research procedures in order to manipulate research results in favor of products they wish to market, or to encourage outcomes beneficial to their commercial aims. Of particular concern is the relationship between university-based drug trials and their pharmaceutical sponsors. Washburn documents the ways drug companies purchase endorsements from respected experts for research carried out by third party companies, and attach restrictions to their funding contracts that give them full control over the raw data. This allows a drug company to kill studies that don’t reflect well on its products. The corruption within the pharmaceutical research process is so rife that drugs like Vioxx have gotten to market with the imprimatur of premier research institutions despite lingering safety concerns.

The sundry misbehaviors that Washburn painstakingly documents all seem to stem from the burgeoning consensus in American life, evidenced by the management newspeak that now dominates non-profit and government offices, that all institutions, no matter their mission, should be run like businesses. There’s no question that some of the management methods of the private sector recently introduced into, say, social service agencies and sanitation departments have “added value” to the “customers” who use the services. Government agencies using private sector business methods are, on the whole, probably more efficient; non-profits that emulate for-profit ventures are likely leaner and more effective. But if all you have is a hammer, everything begins to look like a nail, and, of late, government officials, non-profit executive directors and university presidents have been whacking at away at those who stand in the path of profit with the unsentimental ferocity of corporate titans, guarding the bottom line and business obligations above most, if not all other considerations.

This is particularly acute in higher education: witness the union-busting by New York University, University of Pennsylvania and others who have fought tooth and nail to deny collective bargaining rights to grad students and adjuncts who work for, in many cases, poverty wages without benefits or health insurance. Or how about the dust-up over Yale’s exclusive licensing arrangement with Bristol Meyers Squibb for the AIDS drug Zerit (a stavudine antiretroviral drug for which Yale owned the patent)? When called upon by activists to allow the drug to be reproduced in cheaper, generic versions for AIDS victims in Africa and throughout the southern hemisphere, the university deferred to its exclusive licensing deal with BMS, which refused to allow generic production.

Washburn isn’t the only observer to recognize the corrosive effects of academia’s single-minded pursuit of revenue streams. In Privilege: Harvard and the Education of the Ruling Class (Hyperion),Ross Gregory Douthat’s assured memoir of his time at Harvard, he too decries this trend. During Douthat’s senior year, a group called the Progressive Student Labor Movement occupied the president’s office, demanding that the university, which had recently completed a successful $2 billion capital campaign, pay its custodial workers a minimum of $10 an hour. Harvard hemmed, hawed and stone-walled, and as it did Douthat “found it hard to escape the conclusion that maybe, just maybe, the protestors had it right.”

Douthat, a committed conservative who at the time was editor-in-chief of the right-wing Salient, was surprised to find himself sympathizing with the protestors, who were drawn mostly from the ranks of “street liberals,” rabble-rousers Douthat found distasteful. But “for all that I abhorred most of their ideas and nearly all of their tactics,” Douthat writes, “they at least shared my sense that there was something wrong with Harvard, and with the entire culture of meritocracy and achievement and cheerful capitalism—something that had to do with greed and ambition and corruption…”

It would be an exaggeration to say that Privilege is a book about the same phenomenon as University Inc. Douthat, an impressively talented young writer who now works for the Atlantic Monthly, offers a critique of his alma mater that ranges from the death of courtship and romance in an age of casual hook-ups and “college marriages” to the vacuity of the core curriculum at Harvard, which he claims emphasizes approaches to knowing at the expense of, well, knowing.

But what permeates the book is a sense that the Harvard he had expected to be a “scholarly island, a place in the world, but not of it, like the monasteries whose power and dignity universities long ago usurped” is instead a kind of glorified pre-professional school where students are caught in the adult rat-race before they even turn 20. If meritocracy is a parody of democracy, as the Christopher Lasch epigram that opens the book reads, then Harvard, in Douthat’s view, mirrors our money- and power-obsessed society: students climb over each other to gain acceptance to exclusive clubs, embezzle student association funds and even engage  in campaign finance violations during student elections, followed by a full-out Clinton-style impeachment frenzy. All of this, Douthat argues, is the result of a school culture that, like the culture at large, worships success above all else. Because the entire ethos of Harvard, from its administrators to its students to the author himself, is so caught up in the pursuit of worldly success, Douthat fears the living wage movement was “trying to put a Band-Aid on a machete wound—a wound that wasn’t Harvard’s bottom-line mentality but an entire system of selfishness in which our university was just a small wheel turning within larger ones.”

There are probably a good many things that the conservative Douthat would like to see happen at universities that Washburn, a progressive, would not, and vice versa. But the communitarian commitments of both the left and right can find common cause in opposition to the flattening effect the market has on education. Conservatives and liberals might argue vociferously about whether, for instance, a curriculum focusing on the “Western” canon is superior to a multi-cultural one, but they would presumably both oppose a curriculum whose contents were determined by which course offerings would bring in the most dough. When Alan Merten, president of George Mason University, implemented just such a curriculum—boosting programs in Computer Science and biotech fields while eliminating degree programs in Classics, German and French—faculty and students of all stripes rebelled. “It actually united professors on the left and right,” one GMU professor told Washburn. “The faculty is often characterized as overly liberal, but we discovered that, in at least one sense, most of us are tremendously conservative: we share a nineteenth-century view that our job is to educate well-rounded citizens.”

This sentiment is encouraging, and suggests there is a significant constituency among researchers, faculty, administrators and students for reform. With sufficient political will, the changes in contemporary higher education that Washburn and Douthat describe are by no means irreversible or inevitable. Indeed, “inevitability” is one of the chief intellectual crutches used by proponents of privatization to avoid engaging in substantive debates on the merits. The “corporate corruption” of higher education is not the result of the inexorable march of history towards free markets, but rather of a number of misguided policies, many of which can be corrected or discarded entirely.

In her final chapter, Washburn offers several common-sense policy solutions. She suggests amending Bayh-Dole to create third party licensing bodies that would “facilitate the commercialization of federally sponsored research while preserving academic autonomy.” These agencies would save smaller universities the cost of opening their own tech-transfer offices, while producing revenue that would be distributed in equal parts to the inventor of the licensed product, the inventor’s university and the federal government’s research budget. She also proposes greatly strengthening conflict of interest prohibitions for taxpayer-funded research, so they “prohibit anyone in a key research, consulting or management role…from having any personal financial ties to…any company that would be affected by the outcome of his or her government-sponsored research…” Finally she calls for increased federal oversight of clinical drug trials.

Washburn is not urging a retreat into the Ivory Tower, but rather a set of checks and balances that will mitigate some of the more pernicious effects of the “commercial ethos” she has so ably described. In tandem with the policy reforms, there must be a cultural change as well. Higher education’s stakeholders, perhaps most crucially the parents who pay tuition, must vocally demand schools return their focus to “knowledge for knowledge’s sake,” producing a well-rounded educated citizenry, and furthering the public interest through the expansion of the knowledge commons. There are just a few spheres of American life left—church, family, friends—where we explicitly assess value independent of price, profit and revenue potential, and there’s good reason to return to the notion that the university should be regarded as one of these spheres, allowed to prioritize considerations other than the bottom line. It is far too late and even counterproductive for academia to barricade itself in, but by emphasizing civic responsibility and the public interest, higher education can serve to set a much-needed example to those many institutions that lie outside its walls.