Higher education in America is the best in the world, but it is also desperately in need of reform. Lacking effective competition and insulated from market forces, universities have created a model fundamentally at odds with free market principles. In a system few outsiders comprehend, universities uniquely are run for the benefit of faculty. Increasingly, top universities have come to resemble closed academic societies. Admission is by way of a Ph.D. degree. Mastery of abstract research for its own sake is the route to promotion and advancement. Teaching is of incidental importance for tenure - the goal of every academic. Achieving tenure assures long-term employment without mandatory retirement plus freedom from inhibitions on speech or actions. Faculty share governance with an administration although faculty lack managerial skills or responsibility for their recommendations. Politically conformist, faculty think one way and recruit newcomers who think alike. Given time,...

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