Economics, Competition and Academia
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Economics, Competition and Academia

An Intellectual History of Sophism versus Virtue

Donald R. Stabile

Donald Stabile places current concerns over the commercialization of academia in a historical context by describing the long-standing question of the extent to which market economics can and should be applied to higher education. The debate between Plato and Aristotle on one side and sophists on the other provides a foundation for the modern debate of endowment versus tuition models. The author tackles the intellectual discourse over the mission of higher education and the effect markets and competition might have on it. The discussion encompasses the ideas on higher education of leading economic thinkers such as Adam Smith, Jeremy Benthan, John Stuart Mill, Alfred Marshall, Thorstein Veblen and John K. Galbraith and identifies them as supporters of either sophism or virtue. Included, too, are the thoughts of educators and policymakers influenced by free market ideas, such as Benjamin Rush, Francis Wayland and Charles W. Eliot, as well as those opposed to them. In addition, the author explores the development of collegiate business schools in the US and how they were justified on the basis of virtue. The book concludes with a section on for-profit colleges and their relationship to sophism.
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Chapter 5: Academia and the Rise of Capitalism in the US

Donald R. Stabile

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5. Academia and the rise of capitalism in the US The US in 1860 remained in the early stages of economic development. The largest business corporations were railroads, yet a transcontinental railroad had yet to be built. Petroleum had only recently been turned into a useful resource, and coal and wood were the main fuels. Sailing ships remained the mainstay of oceanic travel, although steamships were common on rivers. The ‘American System’ of interchangeable parts had been established, but not perfected. Few consumer products had national recognition and acceptance. Within a span of 40 years that would all change. Businesses went from being small family-owned firms to large corporations whose stock was traded in financial markets. Academia in the US also displayed a pattern of growth in size and scope. In 1860 colleges, and they were still mainly colleges, were small and served local communities, with about 20 000 students enrolled. By 1900 universities of increased size with graduate and professional schools became more common and enrolment totalled 250 000 students (Burke 1982: 216). This chapter will describe the economic ideas associated with the growth of universities during the post-Civil War era. We will see that universities did not, as Francis Wayland had argued, expand through gaining more tuition from more students by offering more practical courses. Instead they grew with finds provided by public and private patrons, that is, they followed the endowment model. Due to this use of the endowment model academia did not succumb to sophism and...

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